CHICAGO – Cannabidiol (CBD) products—and their big brother cannabis—have become a category in which the trends are moving fast. What’s in, what’s out and what’s what are questions with answers that are tough to pin down.
The products—gummies, candies, beverages, baked goods, tinctures, creams and others—are jockeying for position as retailers and manufacturers strive for consumer dollars.
From a consumer point of view, however, preference has been slower to emerge.
“I think everybody’s still in the beginning stages and trying to figure out what they like from a consumer standpoint,” said Michael Tirey, marketing manager for Circle K Franchise division, based in New Port Richey, Fla.
Burgeoning Marketplace
Along with the products, ingredient formats also are competing. There’s CBD, but there’s also kratom and other botanicals that share similar attributes. And then there’s the controversial, semi-synthetic extract Delta-8, and right behind it Delta-9 and Delta-10, variants of cannabis named for the types of cannabinoids each contains. And meanwhile the psychoactive marijuana and its various product types are allowed for sale only in licensed dispensaries, where legal. The choices in the marketplace have become so varied, in fact, that the USA CBD Expo, of which CSP is a media partner, changed its name and focus to the Alternative Products Expo in November to encapsulate it all.
“When we think about product selection, if we want to be forward thinking, it’s very challenging because there are new products every day, and they definitely vary,” said Donna Hood Crecca, principal with Technomic, CSP’s sister research arm based in Chicago.
“I think everybody’s still in the beginning stages and trying to figure out what they like from a consumer standpoint.”
At Carmi, Ill.-based Huck’s Market, Jon Bunch, director of marketing and business development, gets requests regularly for different types and brands of products. “I can have different brands of gummies, and some customers are brand loyal, but maybe they’re buying this one today and buying that one tomorrow,” he said.
Bunch said retailers can add to their growth by offering more delivery methods. “I’ve got a vape, edible, topical and water soluble. What you might see is someone who buys gummies all the time [will choose to] try the droplet, too,” he said. “And there you go: You just increased your basket.
“I try to give that consumer an option,” he said. “I don’t want three different gummies at $9.99. Maybe we’ve got $5.99, $12.99 and $19.99. Different price points to create that differentiator.”
Marijuana’s Lead
Chris Walsh, president and founding editor of Lakewood, Colo.-based MJBizDaily, said there is an interesting correlation between CBD and marijuana product sales, with CBD product manufacturers watching what trends work with marijuana.
“Across the country, we’re seeing innovation everywhere,” Walsh said of marijuana. While most think of the flower when talking marijuana, flower sales have declined in many markets “as innovation has taken hold and as consumers realize they don’t have to smoke it to use it.”
“My 63-year-old mother, she’s not going to smoke a hemp cigarette. But she would absolutely drink a CBD-infused water or seltzer or any tea.”
Because fewer people want to smoke, the industry has responded “in some pretty impressive ways,” he said, noting gummies, chocolates, fruit punch and plenty more product types. “As part of these trends, you’re seeing these companies push new ingestion methods, and it’s really resembling mainstream CBD. That’s why you’re seeing mainstream CBD companies take an interest; they are on the sidelines, and they are looking [at what marijuana is doing].”
Among these trends are fast-onset products, such as sublingual CBD oil drops, that kick in after 10 or 15 minutes of ingestion vs. an hour with an edible, said Walsh, adding he has seen water-soluble powders grow in popularity.
“The cannabis comes in little packets, 10 milligrams each, and it might be flavored blueberry and you can put that in whatever drink you want,” he said. “These are the types of things we’re seeing, and it really mirrors consumers’ wants and needs in general.”
Absorption Rate
Trevor Fencott, CEO of Edmonton, Alberta-based cannabis retailer Fire & Flower, concurs with Walsh, noting that one key driver is bioavailability (“a big buzzword,” he said), which is the degree and rate CBD is absorbed into the bloodstream.
But while fast-acting products are growing, edibles are still quite strong, with gummies surging to lead the pack in the last year, passing topicals, on the list of products c-store customers who have tried CBD said they have used at least once a month, according to a Technomic consumer survey.
“There’s a reason why vitamin gummies are really popular, and there’s a reason why CBD gummies are one of the leading formats,” said Melissa Vonder Haar, who monitors the CBD market and is marketing director for iSee Store Innovations, St. Louis. “It’s accessible, and to me, the beverage category is that, too. And people are already using beverages for probiotics, for vitamin C, for a number of things.
“For new cannabis consumers, the most effective way of consuming anything cannabis-related would be to smoke it, but for somebody new to the space, like my 63-year-old mother, she’s not going to smoke a hemp cigarette. But she would absolutely drink a CBD-infused water or seltzer or any tea.”
“I think a lot of consumers are looking for vaping because 33% of CBD users also smoke.”
Conversely, Vonder Haar said, a product like a tincture requires a consumer to administer a dose. “You have to do it under your tongue,” she said. “It doesn’t feel quite as natural.”
That practicality in purchasing is a common theme heard from other industry experts. The CBD products that sell best in c-stores, they said, are treated similarly to other c-store staples: The items are consumed immediately or soon after purchase.
“If you look at the products that are selling best, such as the soft chews (gummies), they are easily ingestible products,” said one CBD product manufacturer on condition of anonymity. “The vape pens are also doing pretty well, and those two are probably the majority of the sales.”
Meanwhile, tinctures aren’t doing well, he said, explaining that CBD products sold in volumes that can last one or two weeks, such as tinctures or creams, equate to poor c-store sales. “It goes back to products that can be consumed quickly.”
Meanwhile, Tirey of Circle K rates gummies and health and beauty items in the top two spots of CBD products types selling in the chain’s c-stores. “Women, if they’re using CBD, they’re more of the topicals, the ointments and lotions, vs. the ingestibles,” he said. “I think there’s still kind of a stigma on the ingestibles.”
CBD and Cosmetics
The growing popularity of CBD-enhanced cosmetics is supported in data from NielsenIQ, which shows sales in 2020 were $340 million but projected to hit $600 million in 2021. That figure would represent one-fifth of all CBD-product sales. This growth is even more pronounced in the fact that CBD cosmetic products are used more often than those in other categories, such as gummies, with 42% saying they apply a beauty product at least weekly.
But there’s a warning with cosmetics. Jonathan Havens, a partner in Baltimore and Washington, D.C.-based law firm Saul Ewing Arnstein & Lehr LLP, said some cosmetics companies are making health claims about their CBD products. He noted “anti-inflammatory, acne treatment and pain relief” as ailments some products purport to remedy. In short, he said, retailers should be careful that the claims of products they consider selling are truthful, not misleading … and legal.
“I think you’re really going to see a lot of people using multiple products: using a vape at work but a beverage or topical at home.”
It’s for this reason that Tirey said Circle K has all CBD products the chain carries independently tested before selling.
Tirey said he’s seen two CBD product segments for which he had big hopes—flavor shots and chocolates—struggle to find sales. While these two areas fade from shelves, Tirey now expects vaping, which he said is about 6% of the business now, and beverages to take off. “I think a lot of consumers are looking for vaping because 33% of CBD users also smoke,” he said. With this built-in audience, he adds, it follows that a sizable percentage of tobacco smokers will gravitate to vaping, and that CBD users in general will be open to sampling other methods of ingestion.
“I think you’re really going to see a lot of people using multiple products: using a vape at work but a beverage or topical at home,” he said.
With CBD beverages, which Circle K does not yet carry, “There are some really good, exciting beverage products on the market right now that I’m personally getting ready to start to put through our testing,” Tirey said.
Higher Doses
Vincent Gillen, vice president of sales for Tampa, Fla.-based Global Widget, which designs, develops and distributes natural health and wellness products, predicts more alternatives to arise in 2022 as consumers continue looking for variety, such as new flavors and purpose. Global Widget had about seven flavors of its Hemp Bomb gummies in Circle K stores. “We have an elderberry CBD product, which has an immunity focus, and now we have a boswellia one, which is an anti-inflammatory. … That is a trend that you’re seeing: People looking for other active ingredients they may not be used to seeing.”
Another trend, he said, is consumers seeking higher doses of CBD per serving size or combined with melatonin. Where a high dose used to be 15 milligrams of CBD, it’s grown to 30 milligrams, he said. Higher doses sell better, and Gillen has found more educated consumers “are willing to try a higher dose and pay a premium for it, with a price point of maybe $15 vs. $10.”
Finally, Gillen called out the proliferation of other hemp-derived options as a consumer trend. “Other stuff like CBN (cannabinol), CBG (cannabigerol), all these other cannabinoids from hemp, Delta-8 and Delta-9 THC, are really making a huge impact on the bottom line for the chains and independent stores picking those up.
“People once buying CBD are now opting to consume Delta-8 or other types of cannabinoid hemp products,” he said, “and I think you’re going to see that as a real trend throughout 2022, and that’s what we’re planning on.”