The Legalization Of CBD Oil And What It Means

Updated on September 20, 2021

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CBD, also known as cannabidiol, is gaining popularity on a global scale. As a multi-billion dollar industry that is expected to grow even further, it has gained massive support for its healing and therapeutic properties. This is because CBD oil has many health benefits, such as relieving pain, reducing anxiety, and treating acne. 

So what is CBD?

CBD is an active ingredient and chemical compound found in the Cannabis Sativa plant. It does not contain tetrahydrocannabinol (THC), another cannabinoid compound found in the cannabis plant that causes the user to become “high”. Since CBD is non-psychoactive, non-intoxicating, and non-addictive, it is completely safe to use. Many people who want to move away from prescription drugs are exploring CBD products as an alternative, organic solution for their ailments. 

However, the legal status of the CBD has caused a lot of confusion. As a result, individuals wanting to consume CBD have been hesitant in their purchase of CBD oil and other products. This article will explain the legal status of CBD and what it means for consumers and businesses. 

The Legal Status Of CBD Oil And Other CBD Products 

The legality of CBD is based on a technical difference about how CBD is sourced. In many countries, the legalization of CBD products depends on whether it is derived from industrial hemp or cannabis. Although they are two different strains of the same plant, countries, and states have categorized them differently based on differences in THC content. 

For instance, in the United States, with the passing of the 2018 Farm Bill, all hemp-derived products containing less than 0.3% of THC were made legal in all 50 states. With this bill, hemp was effectively removed from the Controlled Substances Act. So hemp-derived CBD Oil is perfectly legal to consume.

However, cannabis-derived CBD oil and other products are not legal at the federal level because marijuana is classified as a Schedule I drug as per the Drug Enforcement Administration (DEA) classification. While some states have legalized cannabis for both recreational and medical uses, others have strict restrictions that limit consumption for medical purposes only. This means that CBD exists in a legally gray zone across the US. 

In Europe, CBD Oil is largely legal as long as it is derived from industrial hemp. The European Union (EU) has given each country the freedom to regulate the production and consumption of CBD oil and CBD based products. This means that while the common restriction on hemp-based CBD oil may require THC levels to be below 0.3%, some countries may have stricter rules and may not tolerate any amounts of THC. It is suggested, therefore, that you refer to country-specific laws before purchasing and consuming CBD oil. 

In other countries, such as Australia, only medical use of cannabis is permitted while in others, such as Canada, recreational use is also allowed. Make sure you check the laws and regulations for each specific country before purchasing cannabis-based or hemp-based CBD products. 

Many analysts and cannabis advocacy groups, however, claim that the legalization of cannabis is inevitable. They argue that it is broadly a question of “when” cannabis will be legalized, as opposed to “if” it will be legalized. 

What Are The Implications Of CBD Legalization?  

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Many industry experts, such as professionals from the health industry, managing members, CEOs, and founders of cannabis-related companies are hopeful of a new wave of cannabis legalization. They offer their insights and predictions about cannabis post-legalization, highlighting the many benefits for consumers, businesses and the economy resulting from legalizing and regulating the cannabis industry. 

While the obvious benefit of legalizing a vastly unregulated industry means that the country can hugely gain from millions or even billions in tax revenue, it also means that the government can carefully regulate this industry and formulate safety guidelines to ensure product quality is maintained or improved. 

Below we have mentioned some of the benefits of cannabis legalization from the perspective of the key players in the economy: 

The Government

The most significant benefit resulting from legalizing cannabis would be the regulation of the industry. This would mean that the government can give licenses to cannabis farmers, conduct effective oversight of processing and manufacturing methods, and issue quality control measures. These steps will ensure that the product is safe for consumers and will push out those companies that do not maintain good manufacturing standards. 

The Producers 

Conforming a new status of legitimacy to the cannabis industry would encourage entrepreneurial activity and start-ups looking to enter the market. Post-legalization, companies may be able to obtain extended credit lines and improve their operations to capture the market. As a result, there will also be a surge in innovation and technology to improve operations within the cannabis industry. 

Producers and the owners of the CBD shop will also have the opportunity to expand their product mix by introducing body-care products and food products. This type of product innovation will serve to reinforce the “normalization” of cannabis-derived products into the mainstream market.

As a result of these factors, many companies may be able to achieve economies of scale, thus enabling them to offer competitive price points for cannabis products. 

The Consumers 

One of the most important aspects of the legalization of cannabis, and by extension, cannabis-derived products such as CBD, will be the ease of availability and accessibility of these products. Consumers will no longer have to deal with the overly complex regulations surrounding CBD products. Additionally, legalization can help transform attitudes towards cannabis use and encourage its medical use in the health and wellness industry. It will also ensure that consumers only purchase and use cannabis products from licensed and verified sources. 

The Economy  

The economy can greatly benefit from cannabis legalization in terms of job creation, increase in tax revenue, and encouragement of investment and banking. An increase in innovation and technology will boost R&D to further explore other benefits of the cannabis plant, such as the terpene market. This may have a lasting impact on the economy in terms of growth and development.


The need for the legalization of CBD oil sourced from cannabis is gaining considerable attention. Experts and professionals are also offering insights about the multiple advantages of cannabis legalization. Perhaps it is the need of the hour that countries realize the true potential of cannabis-based products, particularly for the health sector, and legalize CBD in their respective countries. 

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