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The CBD Market: Who, What, Where, Why & How
The CBD market has grown exponentially, rising from the unknown to become a top health and retail story. According to recent data, two-thirds of Americans are now familiar with CBD (cannabidiol), and the CBD market is on track to reach $1.8 billion in consumer sales by 2022. Likewise, Google search volume shows the scaling interest in CBD topics. But who is buying CBD and why? The stats below tell today’s CBD story and help express tomorrow’s CBD potential.
How? The 2018 Farm Bill Legalized Industrial Hemp
The Agricultural Improvement Act of 2018, often called the 2018 Farm Bill, removed industrialized hemp from the list of controlled substances. While this action didn’t precisely legalize CBD, it loosened the regulations enough to create the CBD market.
Who Uses CBD Today?
- 47% of U.S. adults are “very familiar” or “somewhat familiar” with CBD oil.
- CBD familiarity is comparable among all age groups under 64. CBD familiarity drops to 37% for ages 65+.
- Younger generations are more likely to use CBD than older generations. 11% of Generation Z regularly or occasionally uses CBD or hemp oil.
- For beauty and personal care products with CBD, Generation X is the most likely buyer.
- CBD familiarity is greatest in the West and the Midwest regions of the U.S.
Why Do People Use CBD?
- Alleviating pain is the top reason people use CBD products. 40% of CBD users are taking CBD products to overcome pain.
- Relieving anxiety is the second most common reason for using CBD products.
- Baby Boomers are more likely to take CBD to relieve pain, while Millennials more commonly use CBD for anxiety.
- Women use CBD for anxiety more than men. Men are more likely to use CBD to help them sleep.
- Almost half of CBD users were not taking any medication before they started using CBD products.
- Of the 22% who replaced medications with CBD, almost half were previously taking over-the-counter (OTC) pain medications.
- CBD has also been hailed as a treatment or solution for depression, muscle spasms, digestive issues, skin ailments, cancer, Alzheimer’s disease and Parkinson’s disease. (Note: There is no scientific data to back the majority of these claims.)
- One-third of pet owners give CBD products to their dogs and cats according to a survey by market research firm Packaged Facts.
How Do People Use CBD?
- Edible CBD products are the most common way to use CBD.
- Almost one-third of CBD consumers use drops/sprays or vaping CBD products.
Where Do People Buy CBD Products?
Almost half of all CBD buyers purchase CBD products at drug stores. General online retailers and health food/supplement stores are also top CBD purchase locations.
What’s On The Horizon For CBD?
Businesses and venture capitalists are seeing green when it comes to CBD. Veritas Farms, a publicly traded company that specializes in CBD oils, achieved more than $1.5 million in revenue during the first quarter of 2019, up almost 400% from the year prior. Much of that growth is tied to CBD adoption from the retail giants. Veritas products are now in 950 stores with plans to grow to 1,350 this year, including CVS, Rite Aid and Kroger outlets.
While consumption is the top use of CBD products now, continued CBD growth will come from CBD infusions in major consumer products, like cosmetics. Estee Lauder, for example, is producing CBD-infused lotions sold at Sephora. And, according to Brady Cobb, CEO of SOL Global Investments, a cannabis-focused investment firm, “Global food, beverage and tobacco companies are just treading water waiting for the FDA to allow them to add CBD. When that happens, they’re going to plunge in head first.” In fact, Coca-Cola, Molson Coors Brewing, American Premium Water and Jones Soda are said to have CBD-related plans on the books waiting for FDA approval.
How Can Brands Succeed When Entering The CBD Market?
CBD is still in its infancy, with consumer familiarity, trial intentions and uses predicted to expand quickly and dramatically. With maturity, consumer perception and expectations related to CBD will also evolve.
For many CBD brands, customer acquisition through CPA-based campaigns can be an effective way to test new markets and offers. Top brands adding CBD products to their lines may have more success with newsletter content that shares personal CBD success stories.
No matter the strategy, brands entering the CBD market will need to stay informed about the consumer segments ready to try CBD-infused products, the stories that lead to their conversions and the results that drive their retention, all while avoiding misrepresentation or misleading claims related to CBD performance.
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