Industry Trends: CANNABIS & CBD INFUSED PRODUCTS
Since 2018, the cannabis industry has been steadily expanding with a variety of CBD and hemp infused products, awaiting the anticipated opportunity for a huge breakthrough with impending regulation changes and great potential to completely disrupt the consumer market as we know it.
CBD has already made its way into almost every consumer industry imaginable, from gummies and chocolate bars to coffee, pre-workout, sleeping pills, essential oils, skincare serums, and even makeup.
What’s important to note about this influx of CBD products is that they are non-intoxicating and do not contain any amounts of THC, the principal psychoactive constituent of cannabis. In other words, they won’t get you high. While there is still much research to be conducted proving the legitimacy of its therapeutic outcomes, cannabidiol (CBD) is strongly claimed to act as a natural remedy for conditions such as chronic pain, insomnia, depression and anxiety. It’s no wonder manufacturers have jumped on the opportunity to incorporate such an attractive feature into almost every consumable imaginable.
In fact, while there are many up-and-coming brands focused on a product portfolio solely incorporating CBD products, many already-existing brands have decided to expand their product portfolio by adding a CBD-focused line — a business savvy choice, considering this intrigues current consumers while also potentially attracting new consumers and expanding their target market.
MILK MAKEUP: KUSH STASH
Milk Makeup® released a KUSH line, complete with a variety of skincare and makeup products containing CBD oils and hemp-derived ingredients. This line includes mascaras, brow gels, lips balms, and face masks.
NEW BELGIUM: THE HEMPEROR HPA®
New Belgium Brewing spent years creating what they proudly proclaim to be “the world’s dankest ale” – The Hemperor HPA, which is brewed with hemp hearts to emulate the aromatic compounds of hemp terpenes. Due to the restrictive regulatory process and laws governing the use of industrial hemp, however, this product contains no THC or CBD. New Belgium is using this product as an opportunity and platform to raise awareness around the social, environmental and economic benefits of industrial hemp, encouraging beer drinkers to learn more and take action (www.thehemperor.com).
The H(IGH)YPE about THC
There has also been some serious upturn in the cannabis space with food and beverage products containing various manufactured levels of THC, allowing consumers to experience the psychoactive effects of cannabis within controlled doses. BevNet & Nosh hosted a Cannabis Forum for Food and Beverage in June of 2019 that addressed a plethora of topics, from what it takes to build a premium cannabrand to the evolution of demand for infused products. You can learn more and watch these discussions from speakers such as John Kagia, Chief Knowledge Officer of New Frontier Data, here.
The biggest takeaways of the forum?
There’s an enormous amount of money at stake in this business, as the food and beverage industry is looking to infusion as a more than $20 billion industry in the next few years.
Additionally, strong support for full legal access among younger adults will make legalization globally a durable trend, with support and acceptance poised to accelerate over time (72% support of 18-34 year olds in 2018).
A select few CBD-infused products have been found at retailers such as CVS, Walgreens, Rite Aid, Ulta Beauty, GNC Holdings and Urban Outfitters, thought a vast majority of CBD brands are predominantly existing in the online marketplace and haven’t yet breached the brick-and-mortar retailer space. No leading CBD companies are currently selling products in mass-market retailers like Walmart, Whole Foods, Target, or Costco.
According to Nielsen, however, drastic changes are coming. A recently released report projected sales of $6 billion for hemp-derived CBD products in the United States by 2025, also predicting that they will be available at major retailers and across retail channels.
“Even though selling foods and beverages that contain C.B.D goes against U.S. Food and Drug Administration regulations, some suppliers and retailers already are selling ingestible forms of hemp-derived C.B.D. The F.D.A. is exploring potential pathways that would allow dietary supplements and/or conventional foods containing C.B.D. to be marketed lawfully.”
The Farm Bill, which was passed in late 2018, contains a provision legalizing hemp and therefore gives hemp companies access to the largest retailers in the U.S. What remains uncertain are more precise stances adopted by the FDA and DEA on the new policies, which would give more access and specific barriers of how CBD products can legally enter into the markets.
“Because of the tremendous range of products in which CBD is a fit, we expect to see it on shelves, literally, everywhere,” said Andy Rodosevich, CEO and cofounder of Hemp Depot.
What are the implications for CBD brands?
Well, there is a lot that will go into ensuring the success of CBD brands as regulations permit them to enter into major retailers. Getting on the shelves is only part of the battle; it’s staying on the shelves and generating sales where these brands may face some difficulties.
Securing a strong foothold amongst competitors within this up-and-coming industry requires a focus on a multitude of facets: properly educating consumers who may be unfamiliar with the CBD territory, creating brand awareness, generating consumer excitement and loyalty, gathering data and useful insight to present to retail partners, and building relationships with store retailers, just to name some.
This is where in-store promotions and retail merchandising come into play. The combination of directly connecting with consumers and maintaining a solid merchandising strategy is absolutely crucial in order to saturate the CBD market.
As an agency who has years of experience offering this support in various industry categories, we are excited to see the nearing development of this new market and support CBD brands on their journey to success!
If you are interesting in learning more about how Mirus Promotions can support your brand, contact us today – we’d love to connect with you!
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