CHARLOTTE, N.C. — Retailer initiatives, legal issues, product quality, complex industry terms, consumer data and retail sales trends were among the topics discussed at CSP’s CBD & Convenience Retail forum—the second of this year—held Oct. 28-30 in Charlotte, N.C.
Cannabidiol (CBD), a nonpsychoactive component of cannabis, has become one of the most sought-after—and controversial—ingredients in retail products in recent memory. It has emerged in a variety of forms, such as gummies, lotions and oils, and it's estimated to become a $1 billion industry within the next decade. But concern trumps excitement for many retailers, because neither the U.S. Food & Drug Administration (FDA) nor the U.S. Department of Agriculture (USDA) has released guidelines on handling and selling the substance. And until those regulations are released, many retailers will remain on the sidelines of the CBD frenzy.
Here are eight highlights from the event …
Many retailers are excited
A subset of retailers already selling CBD are ecstatic about its potential. VERC Enterprises, Duxbury, Mass., started selling CBD earlier this year in gummy, vape, tincture and cream forms. The ingredient has become such a hit that the chain plans to replace two Subway locations connected to stores with CBD dispensaries, said Leo Vercollone, CEO of VERC.
Yesway, West Des Moines, Iowa, is also riding the CBD trend. The company launched CBD-infused bottled water in 40 stores eight weeks ago and is exploring more options, said Alan Adato, manager of merchandising and procurement for Yesway. “It’s been positive for our associates and for our customers,” he said.
Others remain nervous
Other retailers—even ones who are selling it—are dubious when it comes to CBD. Branded fuel retailer CITGO Petroleum Corp. sells CBD products in roughly 1,000 stores, yet it has lots of ground to cover: It needs to make a 360-degree plan-o-gram for handling it, said Jim Cox, retail development and operations manager for CITGO, Houston. “Our retailers don’t have a clue what they’re doing,” he said.
Vijay Patel, manager of Stop-N-Go Convenience Stores in Asheville, N.C., has wavered from CBD. He wants to maintain a community-friendly image in his stores because many of them are near churches and schools, he said. But after learning more about CBD and its potential benefits, Patel said marketing these items as health and wellness products may help improve the chain’s image—and the product’s perception—with its consumers.
Do you count yourself among retailers who would like to see the FDA get off the sidelines and set some standards for the legal sale of CBD products? Be careful what you wish for, said attorney Jonathan Havens of Saul Ewing Arnstein & Lehr LLP, Baltimore. Havens said the FDA is purposely leaving its standards murky, and that’s to the advantage of the industry. “The FDA doesn’t want to regulate CBD,” Havens said. “And if they do, it’s going to take years.”
For now, the FDA is taking a hear-no-evil, see-no-evil stance in regulating the ingredient, Havens said. “Basically, they've said, officially, you can’t [sell products with CBD], but unofficially, we’re not going to go after it unless you make [medicinal] claims.” That is, as long as no one is complaining, manufacturers and retailers should be left alone by federal regulators.
Instead, the FDA would like to see the industry regulate itself, keeping in mind what’s best for the consumer. If, however, a product claim is extreme—such as it cures cancer—and someone complains, the FDA will get involved.
CBD will increase visits
Offering CBD products will prompt convenience-store visits, said Donna Hood Crecca, principal with CSP’s sister research firm Technomic, Chicago. Twenty percent of consumers said they’d visit c-stores more often if they offered CBD items, and nearly a third (32%) of consumers said they do buy or would consider buying CBD products from a c-store, according to Technomic.
Crecca suggests c-store retailers follow a step-by-step process for launching CBD products. These steps include internal education, monitoring regulations, vetting products and suppliers, assessing customer awareness, identifying appropriate messaging and establishing consumer trust.
“You can’t just assign one category manager to CBD,” she said. “All of the stakeholders and store associates need to be able to talk to customers about it.”
Take the risk on edibles
Which types of products should retailers offer? Twenty-three percent use CBD-infused vapor products more than once a week, the highest of any category, according to Technomic. This outpaces nonchocolate candy (17%), energy drinks (15%) and more.
Despite this, consumers are mainly interested in seeing more CBD edibles: Fifty-three percent of consumers said they’d be interested in purchasing CBD-infused chocolate candy in c-stores if they were available, Crecca said. This outpaced nonchocolate candy (49%), baked goods (49%), topicals (48%) and more. Tinctures (29%) ranked last.
Target tobacco users
Nearly a fifth (18%) of all people have tried CBD products, said Don Burke, senior vice president of Management Science Associates, Pittsburgh. Beyond that, 9% currently use it, and 8% plan on purchasing it within the next 30 days. There’s also a correlation with CBD users and tobacco users: CBD users are two to three times more likely to use tobacco than the general population, and 37% of CBD users smoke cigarettes, Burke said.
A much-needed policy
Yael Ossowski, deputy director of advocacy group Consumer Choice Center, Arlington, Va., said he believes “we need smart cannabis policy now” to maintain a level playing field and give consumers guidelines for purchasing CBD products. “So far regulation has been aimed toward farmers and not consumers who want to see the products on store shelves, even though we know that’s where all the money is going,” he said.
Ossowski outlined five specific policy points he and his group endorse. They include clear labeling standards; allowing branding and advertising; age restrictions; benefits, side effects and health claims; and harm reduction.
“Today, regulators penalize CBD the same way they do THC,” he said. “That is harming the very people who need these products. We recommend that CBD be allowed to be mixed into food and drink products, as well as oils, tinctures and topical products applied to skin.”
Attendees visited four dispensaries during the event to get a feel for how retailers outside of typical channels are marketing the products and the wide variety of product available. Two of the four checked customers’ IDs before allowing them into display shopping rooms, while employees at the other two said they worried about carding only if a customer looked particularly young. One piped in psychedelic rock music as tattooed employees helped customers. In another, the owner wore a crisp white button-down shirt and would have looked at home helping customers in a pricy jewelry store. In that store, signage encouraged customers to use their health savings account cards to pay for CBD products. Product selection among the sites varied from $3 chocolates to $240 tinctures.
What these sites had in common was a dedication to educating consumers about CBD without making outrageous therapeutic or medicinal claims.