The CBD Market – Why So Much Confusion?
marketing, products, regulations............. What's a retailer to do?
Estimates on the growth of the CBD Market vary. The Brightfield Group Published in 2018 that the hemp-CBD market could hit $22 billion by 2022. At the same time New Frontier Data’s Hemp Business Journal estimated the total sales of CBD products will be in excess of $2.1 billion by 2020. Other analysts such as Cowen & Co estimate the CBD market will be worth $16 billion by 2025. So why the large discrepancy? Depending on who you ask, some are more optimistic than others. Some believe that the CBD grassroots movement will continue to grow with minimal regulation and that major retail chains, manufacturers, and investors will drive growth. Others are more conservative and believe that as the CBD market grows, so will regulation and that each state will have different approaches as to what they regulate and how they enforce it.
Regulatory of CBD is changing daily, from state to state and even from city to city. Just recently a California retailer BJ’s Health Foods was ordered to remove all products containing CBD from store shelves in both their Apple Valley and Victorville locations. Meanwhile, merchants in the neighboring town of Hesperia were not notified and are still able to sell the exact same CBD products. Currently Health Officials in New York, Michigan, North Carolina, Maine and Ohio are cracking down on CBD edibles and enforcing the FDA’s warning that “CBD is an unapproved food additive”. What is ok to sell today, is not legal to sell tomorrow.
Then there is the confusion on the various types of CBD: Isolate, Full Spectrum, Broad Spectrum and how each benefits a person’s health differently. Not to mention the variety of CBD products available: tinctures, edibles, vape, beverages, inhalers, topical's, sprays, patches, capsules, pre-rolls, cosmetics, pet treats, etc. etc. Just walk any CBD tradeshow aisle and you will quickly see the creativity and innovation that has taken place within the CBD market.
The Brightfield Group estimates there are over 1,200+ CBD brands that are vying for consumers attention. Some are calling CBD the new “green rush” and with any exploding market there are responsible vendors and there are shady ones. Many brands are passionate about their product. They make sure their product is sourced responsibly , 3rd party tested and labeled correctly. Other brands are out to get rich by selling product that misuses terminology or misrepresents the CBD content advertised on the label. They instead are selling products that are made with fillers and minimal CBD. Just recently, an NBC 6 Investigation found some products on the market labeled as containing CBD did not have the amount listed on the label. More than half of the samples tested had less than half of the amount of CBD advertised on the label.
So where does that leave retailers? How do retailers navigate their way through this confusing market space and still feel comfortable putting product on their shelves that is safe for their customers. Buyer beware, get to know the brands you work with. What is a brands reputation, how is their product sourced? Is their product 3rd party tested? What makes their brand different from the rest? Is the label confusing? If dosage and terminology are confusing to you then chances are your customers will be confused as well. Education is key, the more you and your sales staff know about the product and brands you carry the better suited you will be to answer your customers questions. Ask the brands you work with if they offer in store demos. In store demos are a great way to educate both staff and customers. Demos also help get the word out that your store carries CBD.
The bottom line is all indicators are pointing to growth, CBD is here to stay. The brands and retailers that are responsible and produce/sell legitimate product will be established and prepared as the market for CBD continues to evolve.