With CBD popularity at an all-time high, consumers are still trying to sort the best products from the worst…
By now, you know that CBD is the most exciting craze in cannabis right now. And with the ability to produce hemp-derived CBD legally throughout the United States, CBD products are more accessible than ever.
But, of course, with any hot new trend comes both the established, legitimate companies creating high-quality products that are here to stay and the droves of fly-by-night companies creating unreliable, even fraudulent products that are just trying to make a quick buck.
With this dichotomy comes consumer confusion. We’ve heard several colleagues ask questions like, how can I know that I’m getting what I paid for? What’s the difference between hemp oil, full-spectrum CBD, and pure CBD?
And perhaps most important, what companies should I trust to buy CBD products from?
A Walk to the Local Drugstore
For those of us in the 31 states where CBD is legal to purchase, that means we can walk or drive down to the nearest Walgreens or CVS to pick up a variety of different CBD products – from lotions to tinctures to cooling creams.
At the local CVS, just a short 5-minute walk from the National Institute for Cannabis Investors office in Baltimore, you can walk up to the counter and purchase over 20 different products from 9 different brands.
As you browse through the rest of the store, you can also find all sorts of different products from various well-known brands that advertise wellness and beauty buys with the recognizable hemp plant on the label.
Several lotions advertise being “enriched with 100% pure natural hemp seed oil,” and you can find an entire line of hair care products claiming to be infused with “cannabis sativa (hemp) seed oil.”
Here’s the thing – these products made with “hemp oil” don’t contain any trace of CBD or THC. That’s not to say the products aren’t made with quality ingredients, but it does beg the question, why are we paying more for these if we’re not getting any trace of CBD?
While it’s not exactly false advertising, it is extremely confusing for the average consumer who may be looking for that distinctive hemp leaf on the label that one would think clearly signals “cannabis” or “CBD.”
And products that actually contain CBD can be just as confusing to differentiate.
Not All CBD Products Are Created Equal
There are two primary types of CBD being used in the products we consume – full-spectrum CBD and CBD isolate. Full-spectrum CBD contains, you guessed it, the full spectrum of cannabinoids that the hemp plant has to offer. CBD isolate, on the other hand, only contains the one cannabinoid we know as CBD.
Full-spectrum CBD is now considered to be more effective in its healing properties due to the entourage effect, but it can contain up to 0.3% THC. CBD isolate does not contain any trace of THC, making it a better option for some consumers.
The industry is currently split between full-spectrum and the purified CBD isolate, and most consumers have no idea which they’re using.
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In a recent conversation with Rachael Rapinoe, we were actually surprised to hear that her CBD company, Mendi, plans to use both types. This is unusual but makes sense considering that Mendi caters to athletes – which makes it especially important for the company to provide a pure CBD option so that athletes subject to drug testing don’t get flagged for having even the tiniest trace of THC in their system.
Whether a company chooses to use full-spectrum or CBD isolate is generally a decision based on what the company believes, not what customers are asking for.
As consumer education increases, companies will have to pivot to reflect demand, which will help the best products rise to the top.
Regulatory Agencies Need to Catch Up
A large aspect of this consumer confusion comes directly from regulatory agencies like the U.S. Food and Drug Administration (FDA), which has not issued any solid regulatory guidance for cannabis companies looking to market CBD products. In fact, the FDA just recently released a whole host of unproven claims about the potential harm of CBD that caught us all off-guard.
But we do know the FDA understands that CBD does have tremendous benefits.
For instance, the FDA did approve Epidiolex (cannabidiol) as a form of treatment for epilepsy.
And as we know, the healing potential of CBD goes far beyond that – which is one of the biggest reasons why market demand has absolutely exploded over the past year. It seems like nearly every day you see a new study that supports the health and wellness benefits of cannabis and CBD for things like migraine, chronic pain, traumatic brain injury, and so much more.
The FDA will soon realize that consumer demand for CBD far outweighs the minimal risks laid out in their recent statement. And once the FDA clears up its language, these larger companies will have an even bigger second wave of products to power our portfolios.
The simple fact is that the CBD companies that are doing things right – like the ones in the Cannabis Investors’ Report model portfolio – are creating attractive CBD products while staying within regulations passed down from regulatory agencies like the FDA.
As for the rest – well, those companies are the ones receiving FDA warning letters for making unproven claims about the benefits of CBD. If they don’t shape up, they will eventually be pushed out of the market.
Ultimately, consumers will be the ones to drive regulatory agencies to loosen their grip, which will help drive companies to create better products.
Rest assured, the market will continue to mature, and we’re excited for all the folks out there who will learn more about the healing powers of cannabis-based medicine as they are better informed.
Many of our members probably had conversations at Thanksgiving with friends and family about taking CBD or how CBD oil is helping to improve the quality of life of their pets. As more and more people are informed and spread the good word, that’s what’s going to make this a market worth $20 billion.
And if you haven’t already, you can check out the guide we released on how to uncover the top CBD stocks of 2020.
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8 responses to “By Focusing on Consumer Education, CBD Companies Will Create a $20 Billion Market”
December 06 2019