Cannabis-based products have the potential to impact many different industries, including health, beauty, food and beverage, and wellness. As a result, drug companies are beginning to assess the impact that CBD will have and whether it is worthwhile for them to compete. In the process, there are two key issues that retailers are looking at, and they include what is known about CBD products and what is not. By answering these questions, it may be easier to determine the impact that CBD will have on the market.
What Is Known
At this point, there has been a great deal of research concerning CBD products. Though there is yet to be conclusive evidence concerning the effects of CBD, researchers are reasonably certain that hemp and marijuana have over 100 cannabinoids and chemical compounds.
The most significant compounds are THC and CBD, the former being the psychoactive substance, while the latter is the non-psychoactive substance. This essentially means that CBD cannot cause a high, while THC can, depending upon the concentration and potency. Most people tend to be aware of the difference between CBD and THC, which is certainly a good starting point.
At the heart of it, most consumers and companies are aware of the bare-bone basics. There seems to be a lot more that they don’t know, though.
What Is Not Known
There seems to be a number of estimates concerning the value of the legal cannabis market, which includes both recreational and adult products. For instance, while the Brightfield Group estimates that the market was worth $8.3 billion in 2018 and that it will be worth $25 billion in approximately six years, the Canaccord Genuity Group, Inc. has taken the position that just the beverage sector of the market may reach $600 million in three years.
Further, it seems that many in the industry are focusing on the beverage market due to its widespread feature and the various product categories that are included therein. For example, there are many types of beverages, such as alcoholic and that include THC, non-alcoholic with THC, non-alcoholic CBD products, and beverages that feature both. There are already products on the market from some of these categories as well.
According to David Connan of A.T. Kearney,
“There will be a whole host of CBD products entering the market as the 2018 Farm Bill makes hemp-based CBD legal in all 50 states. However, individual states may choose to restrict or limit access, making it difficult for national distribution.”
“And since there are no clinical trials yet, the FDA [Food and Drug Administration] will restrict any health benefits claims. It will be another case, like nutritional supplements, with lots of loyal users but incomplete medical evidence,” he continued. “Also, flavor profiles are still an issue due to the difficulty getting water-soluble cannabinoid oils.”
Ultimately, Donnan suggests that it is best to understand that there is a lot of initial hype, which will likely settle down.
The final frontier that many chain retailers are grappling with is whether consumers will accept the new products. Research from A.T. Kearney shows that 78% of survey respondents concerning cannabis perception either “agreed” or “strongly agreed” that CBD-derived products containing cannabis can provide wellness and therapeutic benefits. Other survey questions and answers also suggested that they are open to cannabis products that are legal.
The general takeaway is that there is a potential market for CBD market and retailers have a chance to benefit as well. The big issue now is how retailers are going to go about adopting such products and how they can do so while in compliance with state laws.