CBD loses its “it” ingredient status as scattered regulation hinders biz growth
Struggling to remain calm… In the past decade, CBD’s time as the wellness industry’s buzzy ingredient saw it infused into products like water, gummies, skin cream, and even toilet paper. CBD products reached $4.2B in US sales in 2022. But the hype cycle giveth, and the hype cycle taketh away: regulation limbo has left the market subject to a patchwork of state laws and led several companies to hit the brakes on CBD plans.
Red light: Without federal regulation, big companies have been unwilling to vibe with CBD. Molson Coors and Ben & Jerry’s have paused or scrapped CBD-infused lines, and national retailers like Target and Walmart have avoided most CBD products.
Highly skeptical: Consumer health doubts (and confusion around CBD’s general purpose) haven’t helped its sales. The FDA has issued dozens of warnings over unproven health claims.
CBDon’t... In recent years, Canadian cannabis cos like Canopy Growth invested in “beyond the leaf” products like CBD drinks to expand into the US, where weed is federally illegal. Now even CBD’s meeting hurdles: California allows for widespread CBD sales, but other states’ rules are more complicated. Some restrict the products it can be in (think: yes to seltzer, no to chocolate), the amount of CBD that can be included in products, and where the hemp can be grown — making for a sales headache. The global CBD market was also hurt by Hong Kong’s ban last year, which followed mainland China’s in 2022.
Sometimes you need to pivot the pivot… Weed giants leaned into CBD as a hedge against cannabis regs, but now that the ingredient’s facing similar issues, they’re pivoting (again): cannabiz Tilray has snatched up several beer brands from Molson Coors and AB InBev, including Shock Top and Montauk Brewing. Bev brand Recess, which launched with CBD sparkling water, has diversified to CBD-free products. Now CBD drinks make up less than 10% of its revenue.