Lower CBD Prices: What does it mean for the CBD Industry?
Since the pandemic, the price of CBD products derived from hemp has lowered. CBD products that could help consumers with possible pain relief, anxiety, and more were once sold at premium prices that range from $0.5 to $0.20 cents per milligram. Most CBD companies assumed that the price of CBD would eventually lower in a few years, but since this year more companies have lowered their prices for their goods by 20% to 30%. Even though the prices of CBD have gone down, longtime cannabis consumers are buying CBD and other hemp-derived products at a higher rate than the year previously. So what does this mean for the future of CBD and the cannabis industry? Does this mean that the CBD market will continue to grow or remain stagnant?
What is CBD?
CBD, also known as Cannabidiol, is a hemp-derived cannabinoid or chemical compound that carries possible medicinal benefits for anxiety, pain relief, stress, and more. This essential cannabinoid works with our body’s endocannabinoid receptors throughout our brain and immune system to promote homeostasis or well-being. Since the 2018 Farm Bill Act, the market for CBD and other hemp-derived products has boomed and become a staple health and wellness product in most American homes.
In a 2019 press release by ValidCare, market intelligence and research company for hemp-derived businesses, the company estimates that one out of five people in the United States use CBD for mental illness and other ailments. The research company estimates that more consumers in the next few years will possibly ditch traditional anxiety medications for CBD and other hemp-derived products to embrace a natural wellness lifestyle. With the CBD boom, the company also predicted that more consumers will look into expanding hemp products that include lesser known cannabinoids like CBG, CBN, and more.
What is the CBD Market Like Today?
In a published report by the Brightfield Group, a market research company that specifies in the CBD sector, they discussed how the sale numbers for CBD products have drastically changed in less than one year. According to their data, CBD skyrocketed into a $4.15-million-dollar industry in 2019 compared to the estimated sales of 2018 at 627 million dollars. Although last year had an estimated 500% increase in sales, analysts still predict an increase in CBD sales due to steady consumer demand.
With their latest model, Brightfield analysts expect the CBD industry to gain over $4.75 billion in sales by the end of this year, estimating a 14% increase in expected sales. In their report, the marketing analysis company also discovered in a survey within a group of over 5,000 CBD consumers more than 40% of these individuals have increased their rate of purchases and dosages of CBD products.
Why are CBD Products Cheaper Now?
Since the legalization of hemp, an influx of new internet businesses and brick and mortar stores have gotten into the CBD market. With this growth, alumni CBD companies that have been in the business for five to ten years plus have lowered their once premium prices to compete with newcomers. In the past, a 1 ounce CBD oil or tincture could range from $30 to $200 dollars. Although now the average CBD tincture can range from $40 to $45 dollars a bottle.
Hemp farmers and growers have also seen a decline in the price of CBD biomass since mid-April of 2019. In Hemp Benchmark’s 2019 report of accounting how much hemp is grown in legal farms for corporate production of CBD and other hemp-derived products, the company discovered that most legal states were licensed over 450,000 acres of land to use for outdoor cultivation. Normally farmers in the United States are estimated to use 250,000 to 260,000 acres of land for hemp cultivation.
Since 2020, due to poor weather conditions and less staffing due to the ongoing pandemic, only 15% to 20% of these acres have been used to create viable CBD biomass. This year has also brought the price for CBD biomass at a 74% decline.
What Can CBD Companies Do to Help Improve the Market?
Luckily with more competition within the CBD market, more farmers are looking into how to improve their harvesting, storage, and extraction methods for CBD. Some have estimated in the past that significant crop loss occurring during and after harvest when the plant was hung to dry with hand-build dryers, causing the biomass to accumulate mold. To help store biomass for longer periods of time, farmers are looking into creating custom storage preserves to prevent mold from accumulating on hemp during the drying and storage process.
In a flooded market of new CBD companies, some companies are working on distinguishing themselves from other competitors. Some have focused on creating different products outside of traditional CBD tinctures and gummies, like optimizing a line of specialized CBD skincare, flower, etc.
For CBD brands like Canna River, co-founder and entrepreneur Grant Boatman is optimizing his brand by creating high-grade quality CBD products at an affordable price. Since their start in 2019, Canna River high-grade CBD oils have been sold at a fraction of the expected $.20 cents per milligram cost. Boatman states that some companies assume that these high margin-low volume business models work for CBD products, but instead it makes consumers choose between quality or their wallets.
With their affordable CBD products, Canna River is able to gain a devout customer base during the pandemic, seeing a steady stream of sales amid the pandemic without lowering their prices to compete with other brands. Full Spectrum Canna River oils will contain CBD and the 100-plus cannabinoids in hemp for all body wellness with the trace legal limit of 0.3% or less THC.
Why the CBD Market is Here to Stay?
Most business research analysts concur that the CBD industry is uncharacteristically resilient since national sales have increased compared to other retail/business sectors. Bethany Gomez from the Brightfield group states that they have noticed that more consumers are relying on their CBD products more than ever. Gomez comments that they have also noticed that more individuals are turning towards CBD and other hemp-derived products to help relieve possible anxiety and depression instead of alcohol.
Although 2020 has been a turbulent year for business, the CBD industry is not only surviving but thriving with an overall increase of expected sales from our consumers’ devotion to all-natural health and wellness. Go Green Botanicals recommends for individuals to talk to their doctor before trying CBD or other hemp-derived products. As we face uncertain times, CBD will always be a natural option for consumers looking to relieve possible anxiety, stress and more. Shop our quality CBD selection now!