Want to know why hemp CBD has earned strong sales growth in the natural health and wellness sector? These five big reasons explain it…
Hemp is hot – and it’s soaring popularity impacts multiple retail markets. No longer associated with Cheech and Chong or excessive use of the word ‘dude,’ hemp-based products earned $170 million in sales last year, according to market research firm Brightfield Group.
The U.S. is the largest consumer market for hemp products worldwide, and the market for hemp-derived cannabidiol (CBD) is on track to reach an astonishing $1 billion by 2020, representing a 55% compound annual growth rate.
CBD made from hemp contains less than 0.3% THC, the psychoactive ingredient associated with marijuana. Often called hemp oil, hemp CBD is now sold in most states and online, making it more accessible than marijuana-derived CBD.
Hemp CBD market overview
Understandably, demand for hemp CBD products is strongest in states where marijuana is difficult to buy, mostly in the Midwest. In terms of distribution channels, Brightfield reports 65% of sales come through e-commerce websites, followed by smoke shops (18%) and dispensaries (9%), as well as health stores and doctor’s offices.
The top five online brands are CW Hemp, PlusCBD Oil, HempMeds (RHSO), Elixinol and CannazALL. Among CBD Hemp makers, only three are publicly traded companies with sales of $100,000 or more: CV Sciences, Medical Marijuana, and Laguna Blends. This means small and medium players across the U.S. are fueling the market’s massive growth.
5 reasons hemp CBD is so hot
Want to know why hemp CBD has earned strong sales growth in the natural health and wellness sector? These five big reasons explain it:
Hemp products are available in the form of balms, capsules, and drops across diverse product categories such as nutritional supplements, skin care products, beverages, foods, recreational and medicinal uses.Hemp seeds can be pressed and made into hemp oil to make such items as cleaning products, body care products, building materials, health food, textiles, and plastics. Supermarkets have increased their offerings of plant-based milks, including hemp varieties.
- Therapeutic value
Consumers increasingly turn to hemp CBD products help to solve common health care conditions. For instance, hemp CBD items are used to improve skin health, reduce stress and anxiety, and promote weight loss, digestion and joint pain relief, among other health conditions. Among the food and beverage categories, hemp seeds are considered the most nutritious seeds in the world, used for thousands of years as an edible source of fiber.
- Millennial demand
Boston Consulting Group found 10% of Millennials are cause-driven, environmentally-minded consumers who love hemp-based, recycled, eco-friendly products. This generation also greatly values health and wellness. Millennials particularly crave healthy, fresh, on-the-go foods that are convenient – including prepared hemp seed salads. As such, hemp is being marketed to Millennials as a nutrient-rich superfood, as it is high in omega 3 and antioxidants.
- Mainstream appeal
Several retail giants sell hemp CBD products, adding to the booming industry. Hemp-based clothing and other textiles are readily accessible through companies like Patagonia and REI, plus smaller suppliers.Walmart.com offers multiple lines of CBD products. However, rather than sell CBD products directly, Walmart uses their website as a third-party seller, meaning the retail giant assumes no legal liability. Amazon is also a third-party provider of CBD products.Although hemp products are legal, certain retailers distance themselves from these items to mitigate risk to their brand and avoid liability. For instance, although Target advertised four hemp supplement products on their website, the company promptly removed them following media attention. While sales of cannabis-derived products could be allowed under certain state-based marijuana programs, selling such products across state lines is illegal. That said, Target sells other hemp-derived food and beauty products, including hemp-seed hearts and hemp-based milk, soaps and shampoos.
- Legislative changes
While hemp CBD is legal as long as it’s under 0.3% THC content, Americans also demonstrate changing attitudes toward the legalization of recreational marijuana in California and Nevada, which contributes to hemp CBD’s popularity. To date, 31 states have passed legislation that allows hemp farming in line with the 2014 Farm Bill. Currently, only 15 states allow CBD, in addition to the 28 states plus Washington DC, which have legalized medical marijuana, Forbes reports.
Hemp CBD is emerging as a powerful retail trend, impacting grocery, pharmacy, apparel and health and beauty, among other categories. To gain a competitive advantage, retailers and suppliers can educate consumers by emphasizing the wide range of health, wellness and therapeutic applications hemp CBD products offer. Retail companies must also stay up-to-date with evolving political, competitive and consumer trends to stand out and sell in this thriving market.