This was a fun, albeit difficult article to write, as I began trying to look into the future, the current state of the industry, the advances taking place and what we can expect in the years to come.
The industry has changed so much in such a short period of time and while we move to a more regulated market, we’re witnessing even more drastic changes taking place.
1) A Reduction In Cowboys
Here in the UK, the Food Standards Agency introduced a requirement for all CBD brands to complete a dossier for a novel food authorisation application.
That deadline has come and passed and while it was extremely messy, with multiple delays and stages, the dust is starting to settle and many CBD brands now cannot be legally sold in the UK.
While this is unfair for many of the small CBD brands that have worked so hard and have struggled to afford the costs of the FSA applications and have struggled to stay afloat in the interim period, for the cowboys, this proves to be a sticky point.
You can still find the dodgy brands utilising non-organic crops from China and with inferior products with fake lab reports (or no lab reports at all), but they’re not present in-store, they’re hard to find on e-commerce retailers and they’re presence is diminishing.
As the standard or regulation continues to increase across the globe for the CBD industry, we move away from the image of a ‘Wild West’ into an established industry with reputable brands.
2) Cheaper CBD Oil
As with any new or emerging industry, the costs of production are exceptionally high. You have expensive new equipment, not to mention the research and development costs, so as you can imagine, CBD oil was unbelievably expensive a few years ago.
But each and every year it has got a little cheaper. Sure, there is an element of big brands trying to push out the small companies and capable of lowering costs due to bulk orders making their cost per product lower. But there has also been a large amount of advances in the technological processes in place.
This all means a lower end price for the customer, as the average person finds it more affordable to purchase a CBD oil on a regular basis.
3) Emergence Of The Subscription Service
We’re subscribed to TV services like Netflix, music services like Spotify and delivery services like Prime. The subscription model is becoming more commonplace and is no longer limited to the magazine and newspaper industries.
The requirement for a subscription is a customer needing an order on a monthly basis, something CBD matches well with. For the brand, this works out amazingly, as you have a continuous stream of income.
The value of a customer increases rapidly, you can spend more on advertising as you know their lifetime value is vastly greater than before if you have a subscription model in place.
Most CBD websites currently just have a ‘buy now’ button, but I can see many of them adding in a subscription button, offering a discount per month on each order so it benefits both parties.
4) Marijuana Holidays
I have already heard from two marijuana resorts that are launching this year, while it appears like this will become increasingly popular as countries relax their laws on the use of marijuana.
These resorts will offer the perfect getaway for those that enjoy a puff and want to meet like-minded people.
Currently it looks like Thailand is taking the lead, but I can see other locations following suit and we all might be enjoying a pina colada together somewhere!
5) Access To Medicinal Cannabis Continues To Be A Struggle
One thing that blows my mind is that, despite the laws changing on the prescription of medicinal cannabis to children suffering with epilepsy, barely a single person who suffers has been prescribed.
This means that parents have been forced to continue taking illegal routes. Sadly, as much as I would like to say the opposite, our backwards government doesn’t seem motivated or forward-thinking enough to push this agenda.
Doctors simply aren’t trained on the subject or know enough about whether they’re allowed to prescribe this to patients. Currently, they can’t be prescribed by your GP, only by a specialist hospital doctor, but maybe this might change over the next five years, but I just don’t have any faith in that happening.
Expect this evolution to happen at a snail’s pace, this is why it is so important to back the campaigns by parents of children who are seeking access to medicinal cannabis. We need to move away from the black market and the government needs to invest in the production of cannabis related medicines.
6) Predictions Of Growth Hit By The Economy
I have read numerous predictions on how much the industry will grow and the rate of combined revenue by 2025. Of course, many of these early predictions didn’t encounter a global pandemic, Brexit and all the various economic issues that have taken place.
This winter, people will be suffering from the cost of living crisis, with energy prices going through the roof, inflation sky rocketing and wages remaining the same.
This all means that people have less disposable income for ‘luxury costs’. The majority of over-the-counter CBD oil purchases are by people looking for a potential tool to tackle pain relief or a lack of sleep. But with budgets tightening, these may soon be considered a luxury cost just out of reach.
I do worry that this will also mean that people start looking at the exceptionally low options available online, coming from inferior sources with questionable quantities of cannabinoids present, not to mention heavy metals or microbes.
For many family run CBD companies, this winter might be a difficult one, as they struggle to keep their heads above water, with sales dipping, business costs increasing and a lack of support from the government.
7) Cannabis On The Menu
I had the good fortune of attending the launch of Canna Kitchen in Brighton back four years ago. Unfortunately, it was closed down under controversial reasons, with the owner Sam being acquitted of any wrongdoing.
However, this remains the one and only cannabis restaurant we’ve seen in the UK. I don’t think another will follow-suit at any point soon, but what I can see is an increase in CBD utilised in cafes.
I regularly find cafes that provide smoothies offering an added scoop of whey protein, perfect for gym-goers wanting to hit their macro’s.
Well I can see a similar adoption with café’s either providing CBD tea, CBD coffee, or water soluble CBD solutions mixed into drinks.
We may also see bakeries introduce CBD infused cakes. Of course, without THC, the temptation of the brownie might not be as tempting, so this one I don’t see happening as regularly, unless simply used as a PR stunt.
8) Google Ads Relaxing
I hope CBD brand owners are learning now how to run PPC ads, as Google’s policy on CBD may change very soon.
We’ve only recently seen the policies change with Amazon and eBay, while the advertising platforms will be quick to jump on the bandwagon.
You have to think about it this way, the entire time Google is refusing, they’re missing out on millions of pounds each year.
You could even download Google Ads Editor, setup your account online and connect them, then create the entire account offline, with all your campaigns, ad groups, ads and keywords in place, so when the rules change, you can flick a switch and be up and running straight away.
Also, heads up, Bing Ads literally follows everything that happens with Google Ads, so if one changes policy, expect the other to follow suit. Bing Ads tend to have a greater conversion rate, a lower cost per click and much better results, albeit with a much lower rate of searches, but the ROI is unbelievable.
9) Differentiation Of Products
Standing out in a busy crowd is always difficult and the CBD industry has certainly got busy. If you’re offering a CBD oil at 1,000mg, how do you make it stand out against your competitors?
You could lower the price, eating into your profit margin, but does that really make it stand out? This is where differentiation will help some brands to stand out.
It could be that you target your product as a sleep-tool, adding in other ingredients such as melatonin, valerian root, lavender or magnesium.
Mood boosting supplements would contain a few of the same ingredients highlighted above, but they might also include 5-HTP, St John’s Wort and Vitamin D.
Or it could be that you focus on terpene boosted products with higher quantities of a certain terpene that people might be seeking.
10) Media Image Changing
I hate the fact that if you mention cannabis to someone, you’re more than likely to get a negative response. The public perception still hasn’t fully changed, which I find unbelievable, but unsurprising considering the decades of articles in the media claiming negative aspects about the plant.
An image of a plant won’t change overnight, it will take years to repair the reputation of cannabis to the point that people can fully trust it. But one thing I am noticing is that newspapers are more open to writing about CBD in a positive manner.
Over the next couple of weeks, I will be featured in an article in the Evening Standard and the Express on the subject of CBD. I’ve previously been featured in the Metro talking about CBD products, as well as Men’s Health and Zoella.
The nature of the articles are all positive, highlighting the reasons for taking them and what people should look out for. You will also find Ruby Deevoy writing about CBD for the Independent, Top Sante and the Mirror.
This public image is a far cry from the past ‘war on drugs’ and while it will take years for the perception to change, I feel we’re moving in the right direction.