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The global cannabidiol (CBD) market is reportedly accelerating at lightning speed like a Formula One race car driven by Lewis Hamilton.
From a market size value of $2.8 billion in 2020, the global cannabidiol market is expected to expand at a compound annual growth rate (CAGR) of 21.2% from 2021 to 2028.
Over the years, research has described some of the potential of CBD. Because of the lack of psychoactive effects, cannabidiol has gained prominence for its medical benefits — stress relief, pain relief, anxiety and depression treatment, inflammation, diabetes prevention, and cancer symptom relief.
The benefits of CBD products attract consumers irrespective of the cost. The demand has also made the business attractive for commercial retailers.
Many health and wellness retailers such as CVS Health Corp. CVS, Rite Aid Corp. RAD, and Walgreens Boots Alliance Inc. WBA offer cannabidiol-based products.
COVID-19 And The CBD Market
While the cannabidiol market has been attractive for some years now, the coronavirus pandemic seems to have taken a toll on the industry’s activities.
The pandemic triggered lockdowns worldwide, which caused the market to experience shortages in supply from shutdowns of transportation and manufacturing in countries like China and India that manufacture raw materials.
The supply of other raw materials has also been limited in the U.S., disrupting the manufacturing and supply chain of CBD consumer health products.
But in the midst of what appears like troubles for the industry, some companies are pushing forward. One example — The OLB Group Inc. OLB — seems to have managed to rise above the storm to expand.
The company, a fintech merchant services provider and Bitcoin mining enterprise, revealed in December last year that it had acquired a portfolio of over 1,500 CBD merchants with an annual transaction volume of over $400 million.
The acquisition includes new sales channels currently onboarding an average of 120 new accounts a month.
A New Engine For Growth?
OLB explained in a statement that the acquired merchant portfolio had demonstrated a historical annual transaction run rate where it is anticipated to achieve an annual transaction volume of approximately $400 million in 2022.
This acquisition is planned to provide the company with a significant foothold in the nearly $3 billion global CBD market while adding an experienced sales channel to the OLB team.
It anticipates, based on the historical performance of the group of merchants, an additional $20 million in annual revenue and $5 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) for the company’s payment processing business.
Ronny Yakov, The OLB Group CEO, said the acquisition of merchants provides OLB with a new growth engine, “The revenue contribution to our top line is anticipated to represent an increase of revenue of approximately 200% in 2022 compared to 2020 revenue.”
Customizable SecurePay System
An area of expertise of the company is the provision of its proprietary and customizable SecurePay system. By providing the merchant portfolio with such a service, the company looks to be able to address many of the payment concerns relating to the increase in activity in the CBD sector.
OLB’s SecurePay provides an integrated support platform for traditional card-based payments, major digital wallets, including Apple Pay® and Google Pay®, PayPal, and cryptocurrency wallets.
The cloud-based platform also includes integrations with multiple back-office systems, including QuickBooks and other business software applications.
For merchants searching for a comprehensive solution to simplify business processes and payment acceptance at the point of sale (PoS), OLB says its OmniSoft Business Management Platform offers such extended services.
The services include PoS terminals, warehouse, inventory, logistics support, accounting and payroll, and customer relationship management.
This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.
