US CBD SWOT Analysis
The CBD market in the US has faced a significant boost, especially with the passing of the Farm Bill in 2018. The strengths, weaknesses, opportunities, and threats for the CBD market are outlined in slides 3 to 6 of the attached presentation.
- The popularity of CBD products in the US is a strength of the CBD market in the US.
- Baby boomers and Millennials have embraced the use of CBD products for overall wellness applications.
- The legalization of medical marijuana in states such as Michigan and recreational marijuana in Washington has facilitated growth in the CBD market.
- The passing of the Farm Bill in 2018 has contributed significantly to the growth of the CBD market.
- This bill established CBD permanently as a legal substance. This caused a surge in scientific research fundings and the introduction of new CBD companies.
- Major retailers have seen a safe space to start considering CBD, therefore pharmacy and grocery retailers are now embracing the opportunity by making CBD products available to their customers.
- There is a lack of regulatory clarity on the use of CBD products in the market. The "FDA is aware that some companies are marketing products containing cannabis and cannabis-derived compounds in ways that violate the Federal Food, Drug and Cosmetic Act (FD&C Act) and that may put the health and safety of consumers at risk."
- There are still challenges that companies are facing like oversight, ingredient control, and changes in regulations.
- The US FDA is still addressing these matters through summits to ensure that brands will overcome their compliance challenges.
- According to predictive analysis and report by Brightfield, the CBD sales in the US market are expected to grow by 107% by 2023.
- This projected growth is driven by the entrance of new and major pharmacy retailers into the CBD space with the hope that CBD products will bring in new consumers and repeat business.
- Some emerging pharmacies and retailers moving towards this trend are:
- Retail pharmacy stores such as CVS Health, Walgreens Boots Alliance, and Rite Aid have started selling CBD products in several stores across several states in the US. CVS Health will "sell CBD topicals in approximately 800 stores across eight states." Walgreens Boots Alliance will "carry CBD topicals in 1,500 stores in a handful of states". Rite Aid will be "carrying CBD topicals in Washington and Oregon".
- A national grocery store, Kroger, will carry "CBD items in 17 states".
- Harvest Health & Recreation, a multi-state dispensary operator, will be supplying "CBD products to more than 10,000 convenience stores and gas stations". This initiative will reach about 60% of the US market.
- The legal status of CBD products is different in various states.
- This means that when a company would tribe to look for a partner in another state for production, or even for expansion, it may not always be easy because of the federal regulations.
- Amber-Red States and Red States still have restrictions on the use of CBD products. This affects the market growth for CBD-derived products in these states.