Cannabidiol (CBD) became an overnight sensation, working its way into sports products, pet snacks, foods and beverages throughout America. But is the industry tapping into its full potential?
The CBD industry is hotter than ever. Since the 2018 Farm Bill opened up the potential for broader sales, hemp-derived products have been the subject of national fascination. In fact, the CBD market is set to surpass $20 billion in revenue by 2024.
But as a brand new industry, there's still a lot of room for growth and improvement.
Where Can the CBD Industry Improve?
It was a mere two years ago that the production of CBD was by and large illegal on a federal level. That means there isn't a proven route to success lined out quite yet. Of course, we can look to current industry leaders to get an idea of what is working today. But the future of the industry is still too nebulous to predict with any certainty what will become a proven model of success.
The industry continues to be in an ongoing discussion with the FDA over what verbiage is and isn't permitted when advertising a product. The relationship between production and retail sales is still being ironed out since CBD is still so expensive. Issues such as these will shake up business practices as CBD continues to find its footing.
So what should a growing CBD company consider when navigating this rocky territory?
Get CBD in Front of a Larger Audience
Public opinion on the hemp and CBD industry is more positive than ever before. But there is still some confusion about certain aspects of the industry.
In a recent survey, many participants stated they were unfamiliar with the difference between THC and CBD. Additionally, adults in age cohorts 25-34 and 34-44 were more likely to have tried CBD than adults 45 and up.
There is still an untapped base of consumers, namely those in the older age demographic, that CBD companies should aim to connect with. One mistake many players in the industry make is underestimating the importance of reaching all facets of the population. There's a lot of value in building a solid reputation with older folks.
Region plays a big role in positive sentiment around CBD as well. Those in the Northeast expressed the most positive outlook with 70% indicating a favorable perception. The Midwest only reported a 56% favorable perception.
CBD doesn't currently have the advantage of captivating the entire population. So how do you pull in the attention of those outside your established key demographic? You inform them.
Educate the Public
With the exponential growth of the hemp industry rocketing full force ahead, it can be easy to forget not everyone is informed on CBD. From basic information on its potential benefits to legality, there is a lot that still needs to be covered.
To be an industry leader you have to be an industry educator.
Don't discredit the benefit of taking some time to flesh out a simple article on baseline definitions. Think to yourself, what would my hesitation be if I was new to the world of CBD and I'm weighing out if it's worth trying?
Like it or not, there's still a lingering stigma out there surrounding cannabis and anything associated with it. Get in front of the public and remind them again and again that CBD is a worthwhile product to incorporate into their lives.
It's the job of a CBD retailer to be an authoritative source of information on all things CBD. Keep your finger on the pulse and be the first to update your base on changes in the industry. There's still a road full of changes up ahead. Sell the product and go a step further. Be the educational resource your customers can count on to keep them in the loop.
To go beyond, sponsor a CBD clinical trial.
Price CBD Products Fairly
Supply and demand are the push and pull of the consumer goods world. Since hemp is now open for cultivation in most states, there's been a significant uptick in supply. But there is far more available hemp than necessary to sustain the industry. Despite that fact, prices still paint a different picture.
Truth be told, extractors and retailers can't keep up with the current supply. The market is ripe with potential consumers but still, there is little justification for the exorbitant price of many CBD products. There's little benefit to marking up prices when there's still a segment of the population that isn't convinced your product is for them.
With supply so high, it makes the most sense to offer a lower price for CBD products. This will appeal to a wider base and draw in more potential customers. Charging $100 for a 1000mg tincture bottle is not only an unnecessarily massive profit margin, but it's also unapproachable to the common consumer.
The Bottom Line
Running a CBD company is a unique balance of swift adjustments and consistent messaging. We must be ready for any and all changes in legality while also assuring the customer that CBD is a product they want on their shelf.
Companies need to adjust and gain a new outlook on common practices. There's no shortage of competition in the CBD sphere right now. Stand out from the crowd and do the work to be the consumer's go-to supplier.
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