Welcome to Marijuana Venture’s second annual CBD issue, where we take a closer look at the booming, but wildly crowded and oftentimes outrageous market of hemp-derived consumer products.
Already a fast-growing category before the 2018 Farm Bill legalized hemp nationally, CBD has absolutely exploded in the 17 months that have followed. According to Vote Hemp, the United States went from having just over 78,000 acres licensed for hemp cultivation in 2018 to more than 511,000 in 2019, the vast majority of which is being processed into CBD. While that precipitous growth may plateau somewhat this year, the number of brands — and places CBD products are being sold — continue to skyrocket, despite a glaring lack of regulatory oversight or clarity on the legality of every CBD product from tinctures to topicals and everything in between. At a certain point, just when you think you’ve seen every CBD product that can possibly be manufactured, some “innovator” comes along and proves that infused toothpastes and mustache waxes were really just the beginning. When CBD-infused knee braces and sports bras weren’t enough to halt the trend, we were introduced to the entire bedroom ensemble — the CBD pillow, the CBD blanket and yes, even the CBD mattress. I wish I were making these up, but I’m not. (And at least they’re not capitalizing on people’s pandemic fears by apparently marketing their product as a potential treatment for coronavirus, like Kali Extracts.)
In this issue, we also explore the accuracy of CBD labels what brands offer the most “bang for the buck,” what major retail chains are selling CBD, what product categories are selling the fastest, how wholesale prices have changed in the past year and the world of celebrity CBD. We turned to several lawyers who dissected various legal aspects of the hemp and CBD industries, including patents, trademarks and banking, as well as the incredibly murky status of regulations from the U.S. Food and Drug Administration. We cap off this special section with Marijuana Venture’s 2020 CBD Awards, acknowledging some of the best packaging, branding and innovations in the CBD space, as decided by Marijuana Venture staff and a diverse panel of professionals and industry experts.
While most of Marijuana Venture’s focus throughout the year remains on marijuana, it’s impossible to ignore the CBD category. Even entrepreneurs concentrating on marijuana need to be cognizant of the potential and market dynamics of the CBD industry: for cannabis producers, it could be the only path to creating a truly national brand in advance of federal legalization; for retailers, CBD products could be a nice revenue source, but one that could be severely threatened by the fact that many major retailers in the United States have already welcomed these products with open arms. When I see companies opening CBD-specific shops in malls and other retail locations, I can’t help but wonder if they’ll be able to compete with the Safeways, Rite-Aids and Walgreens of the world. I hope they can succeed, and believe that some will, but with so many consumers looking for one-stop shopping, it’s hard not to view the CBD shop of today like the video store of yesteryear.
In some ways, the CBD industry is similar to the early stages of the medical marijuana industry: tons of anecdotal, but technically unfounded, medical claims; a general set of guidelines, but not much in the way of specific regulations; an opportunity in an entirely new class of trade; and the entrepreneurial spirit being fueled by the general consensus that most businesses won’t be prosecuted for forging ahead faster than the federal government can react.
But there are also obvious parallels between CBD and the modern medical and recreational cannabis industries with the get-rich-quick schemes and the “green rush” mentality. It’s clear that there are far too many CBD brands out there right now. It’s clear that many — dare I say, most? — CBD companies operating right now won’t survive to see 2021. Those that succeed will be the ones that are well-financed and well-branded, that are run with efficiency and the bottom-line in mind and the ones that are able to do more than ride the wave of hype. The more outrageous press releases certainly gain some media attention, but how many people really buy $295 CBD blankets?
Last year, we published an article by a pair of university professors who asked whether CBD is a rising star or a popular fad. The writers, Jenny Wilkerson and Lance McMahon of the University of Florida, concluded the article by pointing out that many CBD products at supermarkets are not approved by the FDA, there is limited oversight into their production and that CBD content on labeling is often inaccurate.
“Thus,” they wrote, “it is too soon to say if CBD is truly a rising star, or merely a fad that will burn out and fall to Earth.”
More than 400 days after that article was initially written, we’re still looking at these same issues, still asking the same questions and still coming to the same conclusion. The potential is there, but it’s too soon to say anything with certainty.