Tobacco

Retailer Breaks Down Cannabinoid Numbers

Herbal remedies bulk of sales in ‘alternative products’ category, NACS speaker says

LAS VEGAS -- For convenience-store retailers curious about medicinal products derived from hemp or cannabis plants, a retailer speaking on a panel about marijuana sales at the 2018 NACS Show in Las Vegas gave a breakdown of his chain’s sales history with CBDs, or cannabinoids.

Before a packed audience that spilled into a second conference room, Keelan Gallagher, director of trade marketing and brands for Smoker Friendly, Boulder, Colo., said 43% of the category they named “alternative products” is made up of “herbal remedies.” Smoking pipes, smoking accessories and butane-related products make up the rest of the category.

Of the herbal-remedies subcategory, 74% is kratom, a medicinal product derived from a Southeast Asian tree. The rest of the category is made up of detox products and other CBDs, he said. “The goal is mood control,” Gallagher said. “People are looking for the right state of mind.”

Margins for kratom products run in the 50%-65% range, he said.

Cannabinoids are probably the most direct way convenience retailers in the United States will have access to cannabis-related products, even as nine states have legalized the purchase of marijuana, according to Scott Sinder, partner at Steptoe & Johnson, Washington, D.C.

As one of the fastest-growing industries in the country, marijuana will become a $50 billion business by 2026 and add 1 million new jobs, Sinder said.

Despite the potential economic power, marijuana remains a Schedule 1 drug at the federal level; therefore, it carries with it challenges for manufacturers and suppliers with regard to banking and insurance. In addition, U.S. Attorney General Jeff Sessions has made his stance against marijuana very public, Sinder said.

Photograph: Shutterstock

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