It has not been a great couple of years for the cannabidiol industry. The epidemic cratered the sales of so-called cheap CBD products in stores. Meanwhile, by deciding against regulating cannabidiol, the Food and Drug Administration left the industry in a gray area that limits where it can sell CBD.
While there is a way to solve this mess, almost every CBD company is unwilling or unprepared to notice it. Let us go back to the past of the cannabidiol industry to know why.
The US government passed the Farm Bill in 2014, marking the rebirth of the industrial hemp industry. Positive customer feedback aided cannabidiol in becoming a trend. It is an item that can help many people and provide a natural substitute for pharmaceuticals for an array of conditions.
Then, investors jumped on the cannabidiol bandwagon, and the biggest companies went public in no time. The companies also ran the conventional CPG playbook, including cannabidiol in seltzer, dog treats, and so forth. The companies paid attention to selling a greater number of CBD products to customers, which did not add value.
Due to dwindling sales, large vendors are burning goodwill among their investors and cash. They are turning to a federal government bailout option that would involve the FDA formally regulating cannabidiol, thus letting them sell their premium items through bigger retail channels.
All this misses the point. Price is still the fundamental issue in the cannabidiol industry. Cannabidiol is so costly that it is accessible only to a limited number of people. Consuming 40 milligrams of cannabidiol daily costs more than $120 per month due to today’s CBD prices. The concept of affordable CBD products only exists on paper. For most people, it is more affordable to consume pharmaceuticals to cope with their health issues.
For that reason, companies should reduce CBD prices to make the industry come back to growth. A bottle of Ibuprofen or Advil with 24 tablets costs $6 or so. A 600-milligram bottle of cannabidiol, which presently costs around $60, can match it.
Is it possible for the cannabidiol industry to create a CBD bottle worth $6 that competes with Advil? As for a brand that already loses money, reducing prices may only contribute to a quick downward spiral. However, lower rates are within reach for a company that is ready to innovate.