Be it because of its lack of psychoactive effects or its effectiveness in pain management, CBD has become huge in the conversations of both medical and recreational cannabis. There is an apparent and growing interest in CBD. How can you tell? Google searches about CBD have increased drastically in response to the number of new legal cannabis markets. And the largest spike, over the last two years, lines up neatly with the increasing availability of hemp-derived CBD.
There are several CBD products available not only at dispensaries, but also in common retail markets. That being said, there are discrepancies between CBD available to the general public at a drugstore (hemp derived CBD) and the CBD products purchased at a dispensary (marijuana derived CBD). CBD products available at dispensaries are also tested and subject to stricter regulations, unlike hemp derived CBD products.
Until recently, CBD products have been mostly tinctures, lotions and capsules, local or regional mom-and-pop items sold at dispensaries and often offshoots of the marijuana industry. Today, however, CBD fits into a new conception of health, wellness and functional foods. Rising product categories include beverages, capsules, edibles, topicals and sublinguals.
Edibles lead the pack and capsules are at the lower end of sales growth. However, the growth of CBD being consumed in these categories show that more people are using it as a treatment or therapy, and less as a recreational activity. In fact, CBD outperforms THC-heavy products in these non-inhalable categories across the board.
Though there has been significant growth, CBD edibles are not as popular as THC edibles. Brownies and blondies make up the lowest percentage of CBD infused food that is purchased (though cannabis brownies are almost synonymous with THC and psychoactivity).
Honey, sugars and sweeteners make up the largest percentage of CBD infused edibles, able to be consumed more casually and not all at once. That being said, gummies make up a huge portion of CBD edibles being consumed and are on track to be as popular as THC gummies. That’s a point producers should note.
Typically, with CBD products, the more CBD that is present, the more expensive the product. However, incremental price increases vary based on a certain milligram thresholds. For instance, the price of products that contain less than 500 mg of CBD increases by $0.08 per mg, yet prices for products containing over 500 mg of CBD increase only by $0.02 per mg.
To confuse it more, topicals are often sold at high price points - yet have less CBD than sublinguals. It’s apparent that the average item price (AIP) to milligram ratio for CBD products can vary on a number of factors.
What’s clear though is that as the popularity of CBD has increased, so too has the price. Data shows the CBD AIP has risen about $5 since 2015, and CBD went from only being part of 3 percent of baskets to about 7 percent.
According to a recent market research, the CBD oil business could balloon to a $22 billion market by 2022. Brands as familiar as Ben & Jerry’s and Coca-Cola are chomping at the bit to launch CBD-infused products, and stores like Walgreens, Kroger, and CVS have vowed to sell them. As the popularity of CBD soars in the mainstream, consumers will become more comfortable seeking out CBD derived from cannabis and available in dispensaries. Regardless, as far as where it stands in the cannabis industry, CBD clearly is an integral part.
To learn more about CBD in state-legal markets, visit our CBD Market Report.