cbd business Archives | Page 6 of 6

Consumer Report‘s recent report on CBD is a great overview for consumers and CBD entrepreneurs alike. One question that everyone in this space should keep front of mind is: What do people use CBD for?

*One product to look at is Ramina natural hemp cream. The ingredients include natural extracts which help with pain relief for knee, nerves, or arthritis–the three big ones. It’s also very potent. Check it out and read reviews on Amazon.

Now back to our regularly scheduled program aka the rest of the article!

In a recent article, CBD Up Close covered the finding that while CBD usage is the most prevalent among younger people, there are a decent amount of people over 45 who use CBD products and, in our opinion, there is a tremendous opportunity for CBD businesses in serving this older demographic. One of the things for these businesses to keep in mind is that the older demographic will need different messaging to convince them that CBD is a legitimate choice when combating certain kinds of ailments.

CBD Effectiveness and Usage

From the CR chart above, you can see why people use CBD, how effective they think it is, and a breakdown by age group. There’s a lot to unpack here.

First, overwhelmingly, people are using CBD for palliative reasons. Only 11% of the more than 4,000 participants in this study said that they were using CBD for “fun or recreation”. While recreational use of CBD may be a large niche for CBD businesses it isn’t the largest niche. CBD as an alternative to traditional health remedies is where most of the activity is in this industry right now (and CBD Up Close believes that will be the case for the foreseeable future).

The effectiveness of CBD products, at least according to these responses, is murkier. If you haven’t had reason to use many medications in the past to address the ailments listed in the graph above (i.e. stress and anxiety, joint pain, and sleep problems) you may not be aware of the fact that just because a medication has been approved by the FDA that doesn’t mean that it will work 100% all the time.

Instead, what will normally happen is that in consultation with your doctor or healthcare provider you will have to continuously adjust dosage and even try different medications in order to figure out what works for you. This can be a long process but, in CBD Up Close’s opinion, this zeroing in process is largely accepted by many people because, well, it’s what has been done.

Going back to the graph, that 63% “Extremely or very effective” number for people who used CBD to “reduce stress or anxiety or help you relax” is actually a really good number. The efficacy for the other uses may be a little less evident but when compared to the traditional method of trying different FDA approved medications until it works, those numbers begin to look a lot better.

CBD Marketing Positioning Versus FDA Approved Drugs

One of the topics that CBD Up Close feels the most strongly about is that CBD companies need to do an excellent job at educating consumers. With at least one exception, CBD is not FDA approved to be used as a medication. That’s the reality that this industry will have to live in for at least the next few years.

However, Report Linker, an aggregator of industry reports used by government agencies and industries of all kinds, reports that “the global complementary and alternative medicine market size is expected to generate a revenue of USD 210.81 billion by 2026.” While it is true that “complementary and alternative medicine” runs the gamut from yoga to natural remedies this is indicative of a large market, a market that CBD will be a large part of.

In fact, “according to a new estimate from cannabis industry analysts the Brightfield Group, the hemp-CBD market alone could hit $22 billion by 2022.” According to the same article, the CBD article in 2018 was projected to hit almost $600 million.

What all of this proves is that CBD, if current trends hold, is becoming more widely accepted as alternative medicine. And much of the same marketing tactics that current marketers of alternative medicines like ginkgo biloba and turmeric can be used with CBD.

But CBD Up Close thinks that CBD can be marketed more strongly than that. As evidenced from the relatively high rates of self-reported efficacy in the CR report, a strong case can be made for marketing CBD products as a more efficacious form of relief, even over FDA approved drugs like Aspirin.

All of this brings us back to educating consumers. What follows are a number of topics that the industry as whole should focus on when communicating the value of CBD as an alternative:

Studies, like the CR report, show that people see CBD products as being effective in relieving whatever ails them
CBD is a natural product with few, if any, side effects for most people
Like traditional medicines, CBD products should not be viewed as being a cure for everything and people will need to try different products to find what works for them
The CBD industry must not exaggerate its effectiveness, CBD won’t cure cancer
In fact, since CBD is not regulated by the FDA, every company selling CBD better include a disclaimer stating that their products have not been reviewed by the FDA and that CBD products are not intended to cure or treat any illnesses
Continue to work with influencers and highlight success stories; as the CBD industry cannot operate with the approval of the FDA, for now at least, it must rely on championing stories and people who have found CBD helpful
Develop relationships with doctors and other medical professionals and help them develop an understanding of how CBD products can be a healthy alternative to traditional drugs
Transitioning to CBD products to help with aches and pains, anxiety, sleep problems, and other health issues can help solve the opiod and over-medication crisis that far too many Americans are currently suffering from

This list will grow as the CBD market becomes more savvy in marketing itself as a legitimate alternative to FDA-approved medications, as it should. CBD Up Close knows that there are many people in America and throughout the world who can benefit from the use of CBD products.

There are some critical differences between cannabis and alcohol when it comes to how business will develop after prohibition ends. For alcohol, it was a mature industry before prohibition hit. Brands already existed when the 18^th Amendment was ratified and during the prohibition years those companies entered some interesting businesses (Coors started a ceramics business that still makes more money than their alcohol business. Who knew?) to weather the dry years.

Cannabis companies do not have the same advantage… for the most part. I did catch this interview of Canopy Growth CEO Bruce Lipton discussing his company’s growth strategy.

While companies like Canopy Growth do not have the same kind of brand recognition that the alcohol companies had before and after Prohibition they are smart to start building their brands now. And it looks like Canopy Growth is doing it in a very smart way.

Federal Law

A big takeaway from the interview is that they are always going to follow federal law. As the first cannabis company listed on the New York Stock Exchange, they would be taking needless risks by flaunting federal laws.

Instead, what they are doing is strategically leveraging existing state laws to make inroads into American markets. They are going to stay away from THC because their concern, a very justifiable concern, is that once they run afoul of federal law that could endanger their ability to have bank accounts. Full stop: cannabis companies need to have a way to make money and if they cannot have bank accounts that certainly puts a damper on that. This is especially important for a company like Canopy Growth since it is traded on the NYSE.

CBD As an In

Canopy Growth’s strategy right now has them making inroads in New York where they have rules that allows companies who make CBD products in New York to sell those products in New York. Canopy Growth and other companies selling these products have to follow rules listing the amount of CBD in their products but that should be expected under the current regulatory regime and it makes good business sense as well. Consumers want to know what it is they are consuming and listing the components of their products on the packaging satisfies that requirement. More importantly, it’s the moral thing to do.

As you may know, CBD is gaining more acceptance because it does not have any of the hallucinogenic properties that THC, another compound found in cannabis, has. This plays in well with the gradual acceptance of overall cannabis products that we think will eventually happen; it just has to be an incremental process that gradually gains acceptance with the populace and politicians.

No Health Claims

Canopy Growth’s CBD for New York will be derived from hemp oil. This is another way to sidestep the cannabis worries (it wouldn’t be fair for people to gain the benefits of CBD and also have fun, would it?) that politicians have. Furthermore, any company selling CBD products cannot make health claims. That is a big no-no.

Why? Once a company starts making health claims they start to fall under the jurisdiction of the FDA and their panoply of regulations. And, as discussed earlier, that would also make this a federal issue, which is something that Canopy Growth wants to avoid until federal laws become accepting of these kinds of products.

Martha, Martha, Martha

Celebrity endorsements are as American as apple pie, NASCAR, and celebrity sex tapes. And Martha is a great fit for this industry. Her brand is all about quality products and she is a trusted voice for millions of Americans. Her partnership with Snoop Dogg doesn’t hurt either.

This kind of celebrity endorsement will help to position Canopy Growth as a legitimate company as they work towards elevating their Q Score before full legalization and, presumably, will help them weather the onslaught of competition that will inevitably come as full legalization becomes a fait acompli.

What Do People Use CBD for?