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Brace for Impact: Industries on the Verge of CBD Disruption

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The following content is sponsored by CannaInsider.

CBD Market Disruption

Brace for Impact: Industries on the Verge of CBD Disruption

It seems as though cannabis is on everyone’s lips these days.

More specifically, the conversation centers around a major chemical compound found inside the plant—cannabidiol, or more widely known as CBD.

CBD’s far-reaching therapeutic benefits are propelling the global CBD market, which could hit $20 billion by 2024. However, industries like alcohol and pharmaceuticals are being directly threatened by this rapid rise.

Today’s infographic from CannaInsider explores how CBD is disrupting these industries, and the latter’s strategies to curb this effect.

Who will emerge unscathed?

CBD Market Spreading like Wildfire

A growing stream of robust research highlights CBD’s benefits in combating certain health conditions, such as:

  • Epilepsy
  • Anxiety
  • Insomnia
  • Chronic pain
  • Arthritis
    • Nearly every product segment, from pet health to beverages, is experiencing a CBD infusion to take advantage of these therapeutic effects.

      This surge in popularity presents significant opportunities to create an entirely new consumer base. Emerging consumers seek CBD products for various applications, such as self-care, socializing, and fitness.

      Going Head to Head with Big Players

      The alcohol, tobacco, and pharmaceutical industries are bracing for impact, as the new variety in CBD products and formats threaten their market share.

      Alcohol

      The percentage of alcohol consumers has dropped by 4.6% since 2000, with changing tastes at the center of this cultural shift.

      New research that tracked behavioural change from 2018 to 2019 found similar results. The percentage of alcohol consumers consuming cannabis has increased from 36% to 45%, while the percentage of cannabis consumers who consume alcohol has decreased from 72% to 65%.

      These behavioural shifts have influenced a significant number of alcohol industry titans to partner with cannabis companies. For example, Molson Coors is entering the cannabis space with HEXO Corp to launch CBD-infused beverages.

      Tobacco

      Similarly, declining smoking rates continue to negatively impact tobacco sales. As many tobacco giants pivot to reduced-risk-products (RRPs) such as vapes, cannabis is also catching their eye.

      Most notably, Altria invested $1.8 billion for a 45% stake in global cannabis company Cronos, potentially signalling the start of many partnerships between the two industries.

      Pharmaceuticals

      The pharma industry is particularly interested in CBD’s therapeutic properties. Medical cannabis sales for 2019 will reach $5.9 billion—poaching $4 billion from Big Pharma’s bottom line.

      This is triggering multinational companies to collaborate with cannabis companies at a furious pace. Partnerships—such as Novartis and Tilray—could unlock more international distribution of medical cannabis, and new pharmaceutical growth opportunities.

      Continuous CBD innovations will not only impact these industries—they could enhance human capabilities and unleash our full potential.

      Civilization 2.0

      A tsunami is unlocking new CBD sub-segments all over the world, with many offering solutions for mood and performance enhancement for both people and animals.

      • CBD for fitness: Incorporating CBD into a workout routine can boost performance, endurance, and recovery. Product types include pre-workout coffee, supplements, and post-workout smoothies.
      • CBD for pets: Proven benefits such as anti-inflammatory properties are driving sales of CBD treatments for pet health. By 2022, this market could be worth over $1 billion.
        • The Unknown Potential

          Applications that will allow a personalized cannabis experience are also on the horizon:

          • DNA-specific strains: Companies are testing people’s saliva to recommend specific strains that are tailored to their specific needs.
          • Odorless cannabis: More pure, less harsh odorless cannabis will soon be available, allowing consumers to smoke in stealth mode.
          • Grow your own: Cannabis consumers can cultivate their own plants at home, and even control the process from their smartphone.
            • As CBD consumption grows, many industries will need to decide to disrupt, or be disrupted.

              Several other cannabinoids have also been discovered, but they have yet to be researched in depth—which means the investment potential of CBD could be just the beginning.

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Visualizing the Importance of Environmental Management in Mining

The responsible management of natural resources and ecosystems such as soils, plants, animals, water and air is central to becoming more sustainable.

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Water and Mining

The Importance of Environmental Management in Mining

A mine will always impact the environment, but the question is to what degree?

The responsible management of natural resources and ecosystems such as soils, plants, animals, water and air, and the services they provide, is central to the efforts of any society seeking to become more sustainable.

The Intergovernmental Forum on Mining “IGF” has identified four issues that governments could effectively manage to reach sustainability goals.

  1. Water Management
  2. Biodiversity and Ecosystem Services
  3. Mine Waste Management
  4. Emergency Preparedness

These four key issues are critical for governments and communities to consider to ensure mining and the environment can coexist for the benefit of all.

Issue #1: Water Management

According to the IGF, U.S. mining operations used 5,526 million cubic meters of water, amounting to 1% of the country’s total water use in 2015.

Mining is a very water intensive industry. In mineral processing, slurry transport, dust suppression, and to meet the water needs of employees, large-scale mining operations use significant amounts of groundwater and surface water across the mine life cycle.

Mining operations need water to process ore and run camp operations. Mines also need to manage water that comes in contact with operations, through rainfalls and runoff.

The protection of water resources applies to both surface and groundwater, and these water resources are increasingly under strain due to:

  • Climate change
  • Variable precipitation
  • Growing populations, increased industrial and agricultural activity

Competing demands for water resources from the mining sector, agriculture, households, from other industries and sectors, and for conservation and leisure—ensure that governments will always play a critical role in water management throughout the life of a mine, not only at the site itself but across watersheds and beyond national borders.

Issue #2: Biodiversity and Ecosystem Services

Mining projects have the potential to impact biodiversity and ecosystem services throughout their lifecycle. Understanding how mining can impact biodiversity is vital to mitigate the harmful impacts of mining on the biodiversity and ecosystem

Biodiversity delivers many benefits to their surrounding communities known as ecosystem services—and a mining project has direct and indirect impacts before, during and after mining operations on these services.

Direct Impacts:

  • Habitat loss
  • Ecosystem fragmentation and degradation
  • Water, air, soil and noise pollution

Indirect Impacts:

  • Human migration seeking opportunities
  • Increased hunting, fishing, gathering and land clearance for agriculture
  • Unintentional introduction of invasive species to an ecosystem

Governments, when considering the merits of a proposed mining project, will have to weigh the economic and development needs of the country and the local community against its conservation and environmental goals.

Issue #3: Mine Waste Management

Mining moves and processes large amounts of materials to extract metals. The excess material is known as mine waste. Mine wastes can contain minerals that are reactive which could be released from the rock when it is mined, crushed, and exposed to air and water.

Mine waste makes up the largest amount of material that is mined. The strip ratio defines how much waste rock there is compared to valuable ore. For example, a 2:1 strip ratio means that mining one tonne of ore will require mining two tonnes of waste rock.

Waste management in mining is complex and incorporates a range of disciplines, including geology, geochemistry, civil engineering, and geotechnical engineering.

Waste rock storage facilities, leach pads, and tailings storage facilities are large structures that must be carefully engineered to ensure they are stable over time and the safety of workers and the public.

Governments should set international standards within their own jurisdictions to ensure the proper construction and maintenance of waste rock facilities.

Issue #4: Emergency Preparedness

Emergency preparedness involves understanding the likelihood of an emergency situation and its potential consequences, taking proactive action to prevent the hazard, preparing to mitigate emergency effects, responding appropriately, communicating effectively, and recovering afterwards.

This relates to:

  • Industrial emergencies
  • Natural and climate-related disasters
  • Health emergencies
  • Political and security risk

Governments have a strong role to play in emergency preparedness, ensuring that responses are swift, organized and coordinated, and that all relevant stakeholders, from local communities to staff, are safe and protected.

Resources and Communities

Mineable deposits occur in both convenient and inconvenient places, close to or distant from communities, close to or distant from water sources, and close or distant from farm land or ecologically sensitive areas.

Mining will always have an impact. The active and sustainable management of these natural resources before, during, and after mining will help to avoid negative impacts where possible and could even mean excluding mining.

A failure to manage the four issues of mining on the environment can threaten the viability of operations, but can also undermine the relationships between a mining company, affected communities, and all levels of government.

The Intergovernmental Forum on Mining “IGF” is creating the policy framework to address the importance of environmental management in mining.

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Ethical Supply: The Search for Cobalt Beyond the Congo

With the current supply chain of cobalt under scrutiny, companies and governments are striving to find new sources of cobalt beyond the Congo.

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Ethical Supply: The Search for Cobalt Beyond the Congo

Each new generation finds new uses for materials, and cobalt is no exception.

Historically, potters and painters used cobalt as dye to color their work. Today, a new cobalt supply chain is emerging to build the next generation of clean energy.

However, there is lack of transparency surrounding the current supply chain for cobalt, as the metal is subject to a number of ethical issues from its main country of production—the Democratic Republic of Congo (DRC).

Today’s infographic comes to us from Fuse Cobalt and uncovers the potential for new sources of cobalt beyond the Congo.

Cobalt’s Growing Demand

Cobalt’s specialized properties make it crucial for rechargeable batteries, metal alloys, and EVs:

  • Thermal stability
  • High energy storage
  • Corrosion resistance
  • Aesthetic appeal

As the markets for EVs and rechargeable batteries grow, the demand for cobalt is expected to surge to 220,000 metric tons by 2025, a 63% increase since 2017.

But can industry meet its demand with a supply of ethically mined cobalt?

A Precarious Supply Chain

In 2019, the DRC produced 70% of global mined cobalt—a majority of which went to China, the leading importer of mined cobalt and an exporter of refined cobalt.

Moreover, 8 of the 14 largest cobalt mines in the DRC are owned by Chinese companies, resulting in a highly controlled supply chain.

Why the Democratic Republic of Congo?

When it comes to cobalt reserves and concentrations, DRC looms over the rest of the world as a clear leader.

CountryCobalt reserves as of 2019 (tons)
Congo (Kinshasa)3,600,000
Australia 1,200,000
Cuba500,000
Philippines260,000
Russia250,000
Canada230,000
Madagascar120,000
China80,000
Papua New Guinea56,000
United States55,000
South Africa50,000
Morocco18,000
Rest of the World500,000
World total (rounded)7,000,000

The African Copper Belt hosts the majority of the DRC’s cobalt deposits, where it is primarily mined as a by-product of copper and nickel mining.

Low labor costs, loose regulations, and poor governance in the DRC allow for the flourishing of artisanal mining and cheap sources of cobalt.

However, cobalt from the DRC is tainted by ethical and humanitarian issues, including:

  • Child labor
  • Corruption
  • Crime
  • Poverty
  • Hazardous artisanal mining

With the current supply chain of cobalt facing scrutiny and criticism, a transformation in the cobalt universe is well underway.

Cobalt’s Changing Landscape

As consumers become aware of the dirty costs of cobalt mining in the DRC, battery and EV manufacturing companies are looking for ethical sources.

Tesla, BMW, Ford, and Volkswagen are part of more than 380 companies that have committed to responsible sourcing through the Responsible Minerals Initiative. Responsible sourcing entails increasing supply chain transparency and searching for sources of cobalt outside the DRC.

Here’s how some companies are leading the way:

  • Ford, Huayou Cobalt, IBM, LG Chem, and RCS Global are using blockchain technology to improve transparency and trace the sources of cobalt.
  • BMW signed a $110 million deal for cobalt from Morocco’s Bou Azzar Mine, in an effort to avoid cobalt sourced from the DRC.
  • Tesla agreed to buy 6,000 tonnes of cobalt annually from Glencore, a multinational company financing North America’s first cobalt refinery.

The U.S. recently added cobalt to its list of critical minerals—minerals for which it seeks independence from imports. The effort aims to reduce its net import reliance of 78% for cobalt, encouraging more localized and reliable production.

As a result of these shifts, the entire supply chain is beginning to reconsider cobalt sources in better-managed jurisdictions.

Cobalt Beyond the Congo: Why Not North America?

North America has comparable sources of cobalt to what is found in the Congo. As of 2019, Canada had 230,000 tons in cobalt reserves, whereas the U.S. had 55,000 tons.

Canadian Opportunity

Ontario hosts some high-grade cobalt deposits such as the Cobalt Silver Queen, Nova Scotia, Drummond, Nipissing, and Cobalt Lode mines.

In fact, Bill Gates, Jeff Bezos, and other billionaires from the Breakthrough Energy Fund are already fueling the exploration and development of cobalt deposits in North America.

Unsung North American Potential

The United States is home to 60 identified deposits of cobalt. These sources along with Canada’s deposits, should provide explorers and miners with a massive opportunity to develop cobalt mining in North America.

As the EV industry booms with gigafactories in construction, will North American carmakers and other battery makers be able to pivot to ethical, local raw materials?

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