Despite growing consumer demand, a lack of clear regulation is keeping traditional players out of the market.
CBD: a non-psychoactive, naturally occurring compound found in the flower of the cannabis sativa L. plant.
Hemp: type of cannabis plant (defined as cannabis sativa L.) that contains less than 0.3% THC, meaning no intoxicating properties, and is high in CBD. Legal at the federal level.
Marijuana: type of cannabis plant (defined as cannabis sativa and cannabis indica) that usually contains more than 10% THC, is low in CBD and produces a “high.” Deemed a Schedule 1 controlled drug and illegal at the federal level.
“It’s mainly the smaller, independent, more niche brands that are operating and kind of owning this space instead of the large well-known players,” Gilsenan says. They have less to lose, less scrutiny hanging over them, she notes.
In Path to Purchase IQ’s latest Trends Report, 26.4% of the consumer goods marketing professionals surveyed identified CBD as the “least valuable” topic of interest to their organization in 2020 among 13 identified topics, while only 7.6% viewed it as “most valuable.” (See chart below.)
For the same reasons as traditional brands, top retailers are also approaching CBD with caution. Retailers such as CVS Pharmacy, Albertsons Cos., 7-Eleven, Southeastern Grocers, Petco, Sephora, Ulta, Kroger and Walmart are only stocking topicals. However, edibles or CBD-infused beverages, still illegal, can be found in some stores, mostly small, independent retailers.
For the time being, traditional brands and retailers can closely watch what these small players are doing. One hemp and CBD company taking consumer safety and transparency seriously since its inception in 2012 is Colorado-based Bluebird Botanicals. The Certified B Corp. was the third company to start selling CBD products in the U.S. and the first to sell them globally. Bluebird avoids making unverified health claims and invests heavily in sourcing, gaining third-party authentication when possible, and making that information accessible to consumers through a database of ingredient information for each item.
While transparency can play a key role, marketing in this space brings its own challenges, requiring brands to get creative. Virginia Lee, CBD research manager at Brightfield Group, offered up a number of CBD brands doing interesting things, including:
• HempFusion in November launched a month-long North American campaign including ads in more than 50 major airports and a smart CBD vending machine dispensing the company’s Stress product at Hartsfield-Jackson Atlanta airport (the busiest in North America) to target “the busy and affluent traveler” during the holiday season.
• Green Growth Brands operates roughly 200 kiosks for offering trials of its Seventh Sense Botanical Therapy brand at “class A, high volume” shopping malls that offer trials, and has sent direct mail pieces containing topical samples.
• Recess, a CBD-infused sparkling water brand, staged an “Instagrammable” pop-up shop in New York City with experiential marketing, musicians, wellness discussions and activities to reach busy New Yorkers.
• Feals and CBDMD have used radio and podcast ads.