“You can’t tell the players without a scorecard.”
The well-known saying for those hawking baseball scorecards might be just as appropriate in the fledgling CBD category. With more and more players entering the marketplace and many predicting that the category is finally ready to explode in sales, retailers may need a scorecard to know who the players are in the marketplace.
According to Boulder, Colo.-based BDS Analytics and Arcview Market Research, the collective market for CBD sales, which includes cosmetics, health products, food and beverage, pet products, skin care, and pharmaceuticals, is expected to exceed $20 billion in the United States by 2024. Consumer Reports has noted that 64 million Americans have tried CBD, and one in seven people use it every day. Chicago-based Brightfield Group estimated the CBD market will grow to $23.7 billion through 2023.
There have been some acquisitions, and industry experts said there will be more. Manufacturers and retailers still are waiting for the Food and Drug Administration to develop regulations related to CBD in food and dietary supplements. Last November, the FDA sent warning letters to 15 companies “for illegally selling products containing cannabidiol (CBD) in ways that violate the Federal Food, Drug, and Cosmetic Act,” according to the agency’s press release. The FDA maintained that there is a lack of scientific information supporting the use of CBD in food, and also noted that the agency is continuing to explore pathways for various types of CBD products to be marketed. While they wait, many retailers are limiting their assortments to topical products.
Even banking regulations have changed to keep up with this evolving industry. In December 2019, four federal agencies — the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Financial Crimes Enforcement Network and the Office of the Comptroller of the Currency — and the Conference of State Bank Supervisors issued a statement together, clarifying the legal status of hemp growth. Even though hemp growing was made legal with the Agriculture Improvement Act of 2018, banks that provided services to hemp-related businesses had to file suspicious activity reports, or SARs. The statement emphasized that banks no longer are required to file an SAR solely because a customer sells hemp-related products.
In the meantime, there is nothing suspicious about the growth CBD companies are enjoying. Manufacturers are continuing to generate excitement by launching innovative products, expanding distribution and moving into new facilities. Retailers that want to satisfy consumer demand for an expanding array of products said certain consumer trends are driving sales. Here is a roundup of what some of the top companies in the CBD space are doing
Abacus Health Products
In February, Abacus Health Products announced it had acquired Salt Lake City-based Harmony Hemp. The Woonsocket, R.I.-based Abacus said the acquisition enabled it to expand its retail footprint by approximately 50% to more than 12,000 retail locations, and expand Abacus’ offering to include a range of beauty and bath products offered by Harmony Hemp. In a press release, Abacus CEO Perry Antelman said Harmony Hemp had long-standing relationships with quality retailers in food, drug and mass, with a lineup of highly complementary products with Abacus.
Harmony Hemp, established in 2017, makes such hemp bath products as bath bombs, lotions, bath salts, oils and soaps, as well as such OTC topicals as Flexible and Neurocomfort joint relief sprays, pain relief gels, roll-ons and lotions with active pharmaceutical ingredients.
For the consumer market, Abacus offers CBDMedic, including three top-selling SKUs — Arthritis Deep Rub Ointment, Back & Neck Ointment and Muscle & Joint Medicated Pain Relief Spray. For the professional practitioner market, Abacus offers CBD Clinic products, including CBD ClinicMassage Therapy Series, a line of eight new massage oils and creams.
The company was recently acquired by Charlotte's Web.
The Alkaline Water Company
Founded in 2012, The Alkaline Water Company produces premium bottled alkaline and flavored water sold under the brand names Alkaline88 and A88. The Scottsdale, Ariz.-based company recently announced a broad line of CBD infused topical and ingestible products. For its topicals line, A88 infused products produces salves, balms, lotions, essential oils and bath salts, all made with lab-tested full-spectrum hemp. For its ingestibles line, the A88 Infused Beverage Division produces CBD-infused drinks, beverage shots, tinctures, capsules and powder packs.
CBDfx offers full-spectrum hemp, broad-spectrum hemp and CBD isolate products. CBD topical products include creams, balms, face masks, facial cleansers, serums, massage oil and bath salts. CBD edibles include drinks, capsules and gummies. The Chatsworth, Calif.-based company said it uses the best botanicals and skin care ingredients available, including such natural aromatics as white willow bark and menthol.
February was awards season not only for movies, but for cbdMD. The brand announced that its CBD PM and CBD Freeze Roller products won the 2020 Product of the Year award in the CBD Sleep Aid and CBD Topical categories, respectively, from research firm Kantar Media Group. This was the first year that Product of the Year USA, in which 40,000 voters participated in an online study, provided a category for CBD companies.
“This is an exciting time to be a part of the CBD space,” said Pancho Mangual, executive vice president of sales at Charlotte, N.C.-based cbdMD. “Not only did we win Product of the Year in two separate categories, but it seems like barriers are beginning to break down across the industry. More people are open to exploring CBD options, and it seems like the conversation is only continuing to grow in support.”
CBD PM is a sleep aid that contains THC-free, non-GMO CBD, 150 mg of melatonin, and the calming herbs valerian root, passionflower, hops, chamomile and lemon balm. The CBD Freeze Roller combines the pain-relieving properties of menthol with the natural power of domestically sourced non-GMO, THC-free CBD. The gel formula includes aloe vera and tea tree oil to keep skin soft, as well as arnica, a traditional herb used for inflammation. Mangual said the company is dedicated to changing the narrative around the entire CBD industry. “Through superior products, robust marketing strategies and complete customer transparency, we’re setting the standard when it comes to public perception about trustworthy CBD companies.”
CBD Unlimited develops and distributes such products as oils, capsules, topicals and pet products, all with the focus on therapeutic and pain relief for humans and pets. The Cave Creek, Ariz.-based company is launching two topical products, expanding its current offering from two to four topical products. It will also soon unveil two ingestible products, hemp-derived CBD-infused chocolates and honey sticks.
While some companies take a wait-and-see approach to the lack of clarity in regulations, Charlotte’s Web has invested in external and internal government affairs expertise. “We are interacting regularly at the federal and state level, seeking clarity and a path forward for hemp-derived cannabinoid products to be regulated as dietary supplements,” said Tony True, chief customer officer at Charlotte’s Web. “The company’s goal is to urge legislative entities to define clear regulations to ensure safety for all consumers and define high quality standards for the industry.”
The efforts focus on educating legislators about the basic differences between mari-juana and hemp, the difference between hemp extract and THC based recreational and medical products, and identifying the optimal testing standards to be used throughout all phases of manufacturing. The work will help not only Charlotte’s Web, but the entire industry, the company said. “A lack of clear enforcement guidelines creates an unsettled market for investors, consumers, farmers, retailers and for state regulators,” True said. “We hope Congress or the FDA will provide clarity before the next harvest.”
Charlotte’s Web also announced two milestones. Its edible pet supplements have been approved to carry seals of approval from the National Animal Supplement Council and the U.S. Hemp Authority. Also, the company earned NSF International’s Good Manufacturing Practice, or GMP, registration for its manufacturing facility in Boulder, Colo.
With Charlotte's Web's recent acquisition of Abacus Health, the company has roughly 34.7% market share in the food/drug/mass CBD market.
CV Sciences makes PlusCBD Oil products. The company recently added to its lineup of PlusCBD Oil Original and Extra Strength Balms with PlusCBD Oil Roll-Ons. The products are sold at more than 5,700 retail locations in the United States, including natural food stores, healthcare provider offices and, most recently, at more than 1,350 Kroger stores in 22 states under various banners. “That kind of scale is hard to achieve,” said Joseph Dowling, CEO of San Diego-based CV Sciences. “In six years, we’ve developed a brand that has earned the trust of the consumer.”
As the brand gains distribution, the company is demonstrating its expertise at navigating a crowded category. “You have to make sure you have the right brand, right product offering, right pricing, right messaging and right marketing for every sales channel you’re in,” Dowling said. For example, price is important in big-box stores, while convenience is key online, and trust in the brand is essential in natural foods stores. With topicals, certain premium ingredients and the premium price are more relevant at department store cosmetic counters than at food, drug and mass retailers.
The brand has invested in the scientific evidence necessary to receive self-affirmed Generally Recognized as Safe status. “That’s going to be table stakes down the road, demonstrating the safety of your product,” Dowling said. “We’ve done that from the beginning.”
In November, Eagle Labs announced the launch of its impirica brand of CBD products. The St. Petersburg, Fla.-based company said impirica is made in an FDA registered manufacturing facility that follows GMP, and all finished batches are tested by multiple third-party laboratories. There are eight new impirica CBD products, including CBD liquid drops, capsules, soft gels, relief skin cream, roll-on relief, transdermal relief patch, eye serum and CBD for pets.
Founded in 2015, Functional Remedies said it is a pioneer in the wellness industry, creating full-spectrum hemp oil products using 100% sustainable farming. The Superior, Colo.-based company produces products that maximize the natural benefits of the whole plant to create a synergistic effect with the body, the company said.
“Functional Remedies provides true full-spectrum hemp oil products, which means it’s made with the whole hemp plant and contains high levels of phytocannabinoids, plus all the other beneficial phytonutrients, including terpenes, flavonoids, polyphenols, etc.,” said CEO Andrew Campbell. “This combination acts synergistically within your body, giving you the true entourage effect.”
Officials at Functional Remedies said they are the only hemp company that has earned three GMP certifications and has been admitted to the Consumer Products Health Association. The company uses its patented LipidTrans process, which is a gentle alternative to high-pressure CO2 or chemical solvents to extract CBD from the hemp plant
“For over 20 years, we have been perfecting our hemp plants on our own farm, hand pressing the oils from the plants to create the most phytonutrient-dense hemp oil available today, to help our customers achieve balanced wellness,” Campbell said.
Elixinol uses full- or broad-spectrum hemp extract in all its products. “This enables the entourage effect, which harnesses the interactive synergies of all those ingredients to provide maximum therapeutic benefits,” said Leif Harrison, CEO of the Americas. Among the new items is 1,000 mg Broad Spectrum Sports Gel, which features a blend of such essential oils as eucalyptus, peppermint, rosemary, basil, grapefruit, chamomile and cassia bark extract, with true broad-spectrum hemp extract containing zero THC and a full profile of other cannabinoids, terpenes and flavonoids. It is nongreasy and offers fast absorption for all skin types. Also new is a line of capsules in Omega Turmeric, Body Comfort, Stress Less, Happy Belly and Good Night.
In November, HempFusion announced it had expanded its brick-and-mortar distribution to over 500 new stores, including such premium retailers as Sprouts Farmers Market, ShopRite, Heinen’s Grocery Store, Better Health Store, Harmons Grocery, and more than 100 new independent natural retailers. HempFusion’s family of brands now is available at more than 3,900 retailers across 47 states. The company offers Whole Food Hemp Complex, which contains CBD and other cannabinoids, along with additional plant-based terpenes and omegas formulated to optimize the ensemble effect of all beneficial compounds. The brand also features 25-plus CBD products with a full spectrum of cannabinoids that are sourced from quality phytocompounds manufactured under current GMP that are designed to attain efficacy and safety.
The company’s pain-related products are seeing strong sales among consumers aged 55 years old and older. “As we age, our bodies do not act like we’re 20,” said HempFusion co-CEO and co-founder Jason Mitchell. “CBD provides an alternative to being overly medicated.” Products include Hemp Extract Cream and Hemp Extract Balm, and contain such ingredients as jojoba oil, peppermint oil and aloe vera.
The products do not contain beeswax, as the company is focusing on the preservation of bees. “If we don’t have bees, we won’t have food,” Mitchell said. “Bees are important to focus on.”
People quickly have traded up from buying a $4.99 single pack of Holistik Wellness beverage dissolvable stir sticks to buying 10 packs for $39.99. “We’ve proven out a lot of our launch assumptions,” said co-founder and CEO T.J. Stouder. That’s good for retailers that are seeing increases in average basket size as people trade up to larger sizes of the water dissolvable, broad-spectrum CBD product.
The biggest sellers are Holistik Sleep, which has chamomile, melatonin and 10 mg of broad-spectrum CBD Wellness; and Holistik Stress, which has 10 mg of broad-spectrum CBD Wellness and lemon balm extract. The products are answering consumer demand for alternatives to prescription treatments. “It’s super exciting to see those impacts,” Stouder said. “Consumers are being touched by the plant.”
Although many retailers are not selling ingestibles while the industry waits for FDA guidance, Stouder said the company is in talks with 100 retailers that will place orders soon. “We think it’s around the corner,” he said. Also, in the works is a way to manufacture the stir sticks out of hemp instead of plastic at the same cost.
Family-owned Joy Organics was co-founded by Joy Smith, who struggled with sleep and other issues and wanted to find a natural solution, and her husband Todd Smith, who has 28 years of experience at a metabolic health company. Joy Organics directors and managers include Joy Smith’s two daughters, as well as Todd Smith’s brother and sister-in-law. “We started in April 2018, and we expanded to other members of the family,” said Todd Smith, who added that his son Jared handles digital marketing.
CBD is different from other industries, Todd Smith said, because of the lack of federal regulations and the wide availability of products and information online. “I’ve never seen anything where results of trying the product are actually driving the industry,” he said. Topical products from Joy Organics include CBD Salve Balm, CBD Salve Stick and, to help the consumer unwind after a long day, CBD Bath Bombs. The company plans to roll out a CBD Lip Balm soon. The Fort Collins, Colo.-based company has a goal of making all products under a retail price of $40 to make the products more accessible to consumers.
Todd Smith, who is chief partnership officer at Joy Organics, sees a bright future for the category. “In 10 years, CBD will be the No. 1-selling supplement,” he said. “This is the tip of the iceberg.”
The latest from Portland, Ore.-based Lazarus Naturals is a line of lotions infused with 50 mg/tsp of Oregon-grown CBD. The lotions are available unscented and in two scents inspired by the Pacific Northwest: Portland Rose and Pacific Pine. Earlier this year Lazarus Naturals offered the limited-time Portland Rose CBD Body & Massage Oil. The product features organic jojoba seed oil, and organic sweet almond oil with Vitamin E as an all-natural moisturizer. Lazarus Naturals also offers Full Spectrum CBD balms, tinctures, and capsules
CBD products should help people in all demographics, and MarketHub is doing its part by managing the category for Dollar General Stores. “They’re looking at and answering consumer demand,” said Blake Patterson, CEO of Denver-based MarketHub. “CBD is good for everyone.”
As a wholesale partner, MarketHub vets products for retailers and helps stores with merchandising, legal, customer engagement and other areas. MarketHub is the exclusive hemp category manager for Dollar General, which will sell topical CBD products, mostly pain and beauty items, in 4,500 stores. The products are all $19.99 or less at retail, a price point that reflects CBD’s growing distribution. “We’re just looking at different channels and markets that are nontraditional for their space,” Patterson said. “I think that two years ago you could find these products only in specialty kinds of natural shops.”
While Colorado gets a great deal of attention for the state’s hemp growing industry, Kentucky also is an important state for this particular agricultural sector. Not only did Sen. Mitch McConnell, the senior senator from Kentucky and Senate majority leader, play a key role in getting the 2018 Farm Bill passed with the hemp language, but hemp was historically an important crop in Kentucky.
Kentucky is where Irvine, Calif.-based Medterra sources its hemp. Founded in 2017, Medterra originally was a supplier of high-quality isolate to other CBD manufacturers. Today, the company makes products with CBD that are fully compliant under the Kentucky Department of Agricultural Industrial Hemp Pilot Program. Medterra said it takes the highest quality CBD and blends it with the highest quality natural ingredients. The product lineup includes such ingestibles as tinctures, capsules and soft chews for pets. Topical products include Manuka Cream, designed to be part of an everyday skin care regimen, that combines CBD with the healing benefits of New Zealand manuka honey. CBD Rapid Cooling Cream combines CBD and such organic ingredients as menthol and arnica for joint and muscle support.
Mile High Labs
Last year, Mile High Labs purchased a 400,000-sq.-ft. production facility in Broomfield, Colo. The facility formerly was owned by pharmaceutical company Novartis. Stephen Mueller, founder, CEO and chief technology officer of Mile High Labs, said the move was particularly fitting. “People are finding positive results with CBD that they haven’t found with pharmaceutical drugs,” he said. The sale included the land, labs, manufacturing equipment and building.
Mile High Labs began as an ingredients manufacturer, and the October move into the new facility will help the company expand into the finished product business. “In Colorado, we have an incredible pharmaceutical infrastructure,” Mueller said. “This was a facility where they made 10 billion capsules a year.”
The move reflects a bigger shift in the industry. Large corporations are adding CBD products to their lineups, a contrast to the early days when the industry mostly was run by smaller, online companies. That spells opportunity for Mile High Labs. “As big companies come in and want to add CBD product lines, their standards are very high,” he said. “That’s something we have been focused on from the beginning.”
New Leaf Pharmaceuticals
Since New Leaf Pharmaceuticals launched in 2005, there have been many changes and, in some ways, no changes. “There is movement in the area of banking, which potentially will help so many people,” said Rod Deraney, managing partner at the Newtown, Conn.-based company. “But there is still not much clarity into FDA oversight, and that’s still a problem.” Another change, he said, is that hemp prices have decreased as more farmers got into the business and created a huge supply.
One positive trend, Deraney said, is the emergence of exotic cannabinoids, which are other active compounds from the hemp plant, such as cannabichromene, or CBC; cannabinol, or CBN; and cannabigerol, or CBG. New Leaf Pharmaceuticals plans to launch a sleep product that contains these compounds and an herbal blend. “We have our ear to the pavement, and we’re listening and waiting for changes to be handed down, and continuously evolving and improving our products,” Deraney said. For clinical settings, the company will soon release a topical gel for such procedures as photopheresis or ultrasounds.
Deraney expects some industry consolidation. “The cream of the crop are going to survive,” he said. “There’s going to be a lot of companies that don’t survive.”
Last year, Prana Principle CBD, part of the Apax Group, launched a full line of topicals and ingestibles. For 2020, the Castle Rock, Colo.-based company said it is developing a unique manufacturing process that is organic, Non-GMO and does not use any solvents or CO2 to extract CBD. This new extract will first be featured in Prana Principle ingestible products. Also this year, the topical line will include an under eye skin-firming serum to treat puffiness, dark circles and wrinkles.
The company also is launching a CBD serum with plant-based stem cell therapy that promotes healthier, smoother skin. Another new product is ultra-moisturizing CBD skin cream that reduces crepey, flaking and dry skin concerns. It specifically targets delicate skin on hands, chest and arms. These new topical products will be available in the second quarter of 2020.
Prana also is launching a variety of infused CBD wellness shots for focus and metabolism, inflammation response, stress and mood, healthy hair, energy and sleep. The company also will expand its pet line with salmon and bacon tincture flavors. Prana Principle CBD has distribution in more than 4,500 retail stores with more than 20 different SKUs.
Officials at Quicksilver Scientific said they are changing the way consumers take dietary supplements by launching a new line of products. Quicksilver Scientific’s CBD Synergies line is available in three formulations that combine the power of CBD and other effective nutraceuticals and botanicals, boosted by the proprietary Quicksilver Delivery Systems. The new products are AX-Calming Formula, SP-Sleep Formula and PN-Relief Formula. The proprietary Quicksilver Delivery System provides greater bioavailability and more immediate uptake for such difficult-to-absorb supplements as CBD and curcumin. “We are combining the power of CBD with the best ingredients in the natural health toolbox to create targeted remedies that fully express each of the many aspects of CBD’s broad range of beneficial effects,” said Christopher Shade, founder and CEO.
Social CBD/Sentia Wellness
Sentia Wellness launched Social CBD in 2019, and the newness of the brand is something that the company said is a positive feature.
“We consider ourselves the most legally compliant of the CBD players because we were born after legalization, after the Farm Bill,” said Angelo Lombardi, president of the Portland, Ore.-based brand. “We could join the green rush, making claims and putting ourselves right against the edge of what the FDA says, but we chose to be the trusted partner.”
The brand makes 100% plant-based, phytonutrient-rich products and uses third-party testing. Products, which include topicals and ingestibles, are available in 18,000 stores. Muscle Balm — available in Calming Lavender and Cooling Mint — is among the top-selling topicals. The balm sticks are especially popular among active adults, and the company recently entered a partnership with Sports Illustrated to launch athlete-focused CBD-infused products. “The Muscle Balms fit the demographic of someone who has an active lifestyle,” Lombardi said.
Uleva Products recently reformulated four of its original products in dye-free, vegetarian capsules. The four formulas are Flex with glucosamine and chondroitin, Fuel with green tea, Relax with ashwagandha, and Sleep with melatonin. On the horizon for Uleva are three new capsule SKUs — Focus, Vitality and Sleep 2.0 — along with a skin care line. Contract Pharmacal manufactures Uleva in Hauppauge, N.Y.
Veritas Farms started the year with several product launches. They include Zen Roller, a full-spectrum CBD roll-on for travel or on the go, that is available in two scents — Mind, a blend of full-spectrum hemp oil with rosemary and peppermint essential oils, and Mood, a blend of full-spectrum hemp oil with bergamot and lavender essential oils. Each Zen Roller contains 100 mg of full-spectrum hemp oil and 0.3% or less THC. Last year, Veritas Farms launched Veritas Beauty, a line of full-spectrum hemp oil beauty products, including Cucumber Eye Cream, Rejuvenating Night Cream, Hyaluronic Day Cream and Mattifying Blemish Cream. The line also is free of parabens, phthalates, petrochemicals and animal products.
Boulder, Colo.-based Wana Wellness recently introduced Mixed Berry Hemp Gummies and Tropical Hemp Gummies, made with fruit pectin so they are vegan. The gummies are infused with Colorado-grown broad-spectrum hemp oil. The packaging has product batch numbers so consumers can look up contaminant and potency test results related to CBD content.
“Wana Wellness products are THC free, and we’ve included the test results as proof on our website since the company’s inception,” said CEO Nancy Whiteman. “Customers have an appetite for transparency and safety, and we knew it was our duty to provide this service to anyone seeking the benefits of hemp supplements.”