According to research conducted by the Brightfield Group, the market valuation for cannabidiol (CBD) products distributed at the retail level in the United States will surpass $3 billion by 2026. This projection is in line with how much the American CBD market has grown and expanded in recent years. In 2019, the valuation for pharmacies and dispensaries was $398 million while practitioners such as nutritionists and physicians distributed $84 million.
The robust growth of the U.S. market for CBD is being fueled by two major factors. One is the strong demand for this beneficial plant-based substance; the other is the push for nationwide legalization, which has been brewing since the mid-1990s. Since then, the CBD market has expanded thanks to various legislative efforts and rulemaking. The current status of CBD at the federal level allows you to get the finest products from reputable and regulated CBD dispensaries across the country, with a few exceptions we will mention below.
With the above in mind, let’s take a trip down memory lane and review how CBD became an authorized product for Americans seeking relief from pain, stress, insomnia, and other conditions.
Cannabis Prohibition Before Legalization
CBD is derived from the cannabis plant; it can be extracted from the indica, sativa, and ruderal species or subspecies. Without these benign plants, there would be no CBD, so the legalization of cannabinoid compounds is inherently tied to the cannabis legalization movement.
In the 18th century, cannabis enjoyed an unregulated status that American pharmaceutical companies, then known as “druggists,” took full advantage of. Cannabis tincture was an over-the-counter product sold at drugstores, and it was also a popular adjuvant, which means it was widely added to other medications. Then came the Poison Act of 1907, which allowed states to include cannabis in their lists of controlled substances.
California was the first state to classify cannabis as an illegal psychoactive substance under the Poison Act. Almost nine decades later, the Golden State became the first state to legalize cannabis for medical under the Compassionate Use Act of 1996.
The Wave of Cannabis and CBD Legalization
The Compassionate Use Act motivated other states to pass similar legislation for medical cannabis. The increasing recognition of potential therapeutic benefits, including those attributed to CBD, fueled this movement. As more states followed, the distinction between the psychoactive THC and non-intoxicating CBD became more prominent.
In 2018, Congress passed the Farm Bill, a key federal legislation that removed hemp from the Controlled Substances Act, effectively legalizing CBD with less than 0.3% tetrahydrocannabinol (THC). The Farm Bill paved the way for the CBD industry and signaled a shift in federal policy. Thanks to this law, Americans can obtain CBD from online and brick-and-mortar dispensaries.
As of 2025, only a few states impose restrictions on CBD. Idaho has some of the strictest laws because CBD products therein must contain 0% THC to be legal. This means that even 0.3% THC, the tiny percentage allowed by the Farm Bill, is enough to make it illegal in Idaho. Nebraska and South Dakota also have some restrictions to this effect, but not as strict as in Idaho.
