For decades state and federal lawmakers and U.S. residents have been navigating the ever-evolving policies that determine who can legally use cannabis and in which forms it may legally be consumed. But it wasn’t until recently that mass acceptance of CBD– a chemical compound from the cannabis plant– was adopted by consumers and retailers in regard to its claimed health benefits. As openness to CBD, also known as cannabidiol continues to grow, retailers must understand the market and decide if bringing in products with CBD in their ingredients is best for their business. Read on to expand your knowledge of CBD and how RangeMe can help you source CBD infused products.
First things first: CBD does not get you high. CBD and THC are chemical compounds that are found in the cannabis plant. CBD is the non-psychoactive substance in cannabis plants that provides medical benefits while THC is the main psychoactive compound that gives the high sensation. The plant Cannabis sativa has two primary species, hemp, and marijuana. Both contain CBD, but there’s a much higher percentage in hemp, which also has very low (less than 0.3%) levels of THC compared to marijuana, according to Health website.1 https://www.health.com/pain/what-is-cbd Since CBD can be extracted from both hemp and marijuana, the products you purchase at a general market are most likely derived from hemp.2 https://www.theshelbyreport.com/2019/10/07/cbd-observers-understanding-market/ It’s worth noting that there are more than 100 different types of cannabinoids in existence, which means the type of CBD included in products varies.
Now that we understand some of the basics of CBD, let’s dive into some reasons why CBD is a growing opportunity for retailers.
Today, the global cannabis market, both licit and illicit, has reached $150 billion, but by 2025 legal cannabis will encompass 77% of the market, or $166 billion.Euromonitor International
According to a recent report by cannabis and CBD market research firm Brightfield Group Chicago, the CBD industry nearly doubled from 2017 to 2018 and is expected to become a nearly $22 billion market over the next five years.3 https://www.brightfieldgroup.com Today, the global cannabis market, both licit and illicit, has reached $150 billion, but by 2025 legal cannabis will encompass 77% of the market, or $166 billion, according to Euromonitor International.4 https://www.businesswire.com/news/home/20190226005126/en This massive boom of new and improved products containing CBD is due to consumer awareness of CBD’s health benefits with a combination of weed now being legal and regulated in Canada and to some degree in 33 U.S. states.5 https://www.retaildive.com/news/the-blunt-truth-cannabis-retail-is-here/550524/
So who’s buying CBD products? In CBD Marketing’s recent study, they analyzed 1.3 million U.S. social media posts and other public comments on Twitter, Instagram, YouTube, Tumblr, and other blogs and forums for the period January 1, 2018, to January 1, 2019. “Monthly conversations about CBD oil increased steadily over this period and were generated about equally by men (48%) and women (52%).”6 https://www.supermarketnews.com/organic-natural/boomers-and-millennials-alike-are-buzzing-about-cbd This included individuals from Gen Xers to baby boomers. So you could say just about everyone is purchasing or trying products containing CBD.
The proclaimed health benefits of CBD is one of the main reasons it is becoming so popular. For example, there are claims that CBD can effectively treat anxiety, pain, sleeplessness, arthritis, acne, epilepsy, anger and more.7 https://www.nytimes.com/interactive/2019/05/14/magazine/cbd-cannabis-cure.html In the studies mentioned above, the main topics discussed on social media revolved around pain management, anxiety and depression, health and beauty, and pet care/treatments. No wonder so many people are swapping their over-the-counter drugs for products containing CBD. In New Hope Market’s July 2019 monthly update on CBD mentions that “amongst more than 4,000 CBD users, nearly a quarter of them used CBD to replace over the counter drugs and 22% of consumers used CBD to replace their medications entirely.”8 https://www.newhope.com/news/cbd-monthly-update-july-2019
With CBD’s growing demand in today’s market, it is becoming a retail disruptor across many product categories. Through a ranking of more than 70 categories, Nielsen has identified the CPG categories most at risk of disruption, noting areas where consumers are most open and interested in trying a CBD product. These categories include coffee, tea, pet products, and candy, as well as daily-use health and beauty products like shampoos and toothpaste.9 https://progressivegrocer.com/7-burning-questions-cannabis-retailers-need-answered#close-olyticsmodal Based on CBD Marketing’s study on Instagram in the first half of 2019, “posts about CBD in these four sectors are up 66% compared with the second half of 2018. Food and beverage CBD conversations dominate the number of posts, but beauty and personal care CBD conversations are growing at a faster rate.”10 https://www.supermarketnews.com/organic-natural/boomers-and-millennials-alike-are-buzzing-about-cbd Within the next five years, Nielsen projects that edibles and beverages will account for approximately 50 percent of hemp-derived CBD sales and 25 percent of marijuana sales in the United States.”11 https://progressivegrocer.com/7-burning-questions-cannabis-retailers-need-answered#close-olyticsmodal
Where and how are CBD products being sold? Historically, online sales have been the primary distribution channel for the CBD market. In fact, nearly two-thirds of sales were online in 2017. Today, however, the primary cause of market growth is the entrance of chain retailers. Large pharmacy, retail, and grocery chains are entering the market with a wide variety of large-scale pilot programs. Given their reach, scalability and mainstream familiarity, these distribution channels are expected to garner 57% market share in 2019.”12 https://drugstorenews.com/insights/sizing-up-the-cbd-marketplace Some of the major retailers rolling out hemp CBD products include Rite Aid, Whole Foods, Kroger, and CVS.
CBD is available through a greater diversity of sales channels compared to any product ever sold in the history of commerce.Jessica Lukas, BDS Analytics
What’s more, “CBD is available through a greater diversity of sales channels compared to any product ever sold in the history of commerce,” says consumer insights expert, Jessica Lukas, at BDS Analytics.13 https://www.newhope.com/ingredients/livestream-expo-east-2019-natural-products-hemp-and-cbd-summit You can find CBD products not only in traditional food and drug retailers, but also in chiropractor’s offices, and drug stores, bookstores and of course, dispensaries. To date as of 2019, hemp-CBD can be found in nearly 5% of Nielsen-tracked retailers across the country — where a wide pricing spread has blanked the market.14 https://progressivegrocer.com/7-burning-questions-cannabis-retailers-need-answered#close-olyticsmodal The current price point for hemp CBD products ranges from as low as $10 per unit to as high as $60 per unit.
As the cannabis trend continues to develop and grow, it is important for retailers to understand their consumers and what they’re looking for from CBD within specific channels. Do your research and know the scope of what you would be getting into as rules and regulations continue to develop and evolve around CBD.
If you decide CBD is right for your store, RangeMe is the solution to help buyers source new and trending products containing cannabinoids, and our CBD Collection pulls the top trending products on RangeMe containing cannabinoids into one accessible space. In addition to the CBD Collection, with Save Search, you can set specific search criteria, such as CBD, and be notified when new products on RangeMe match your set criteria.
To get you started, we’ve gathered some of the top products on RangeMe containing CBD in the trending cannabinoid categories:
Now that you understand the market, it’s time to learn more about what factors you should consider before bringing in CBD products into your store. Continue learning here.