COVID-19 and legal chaos dent CBD market – but Congress and a stronger economy offer hope

After the break-out years of 2018 and 2019 where CBD rose to the top of botanical sales in the natural channel and basically doubled revenues annually to push toward the $1 billion mark, Nutrition Business Journal (NBJ)​ reported CBD (cannabidiol) dietary supplement sales slipped 5.9% in 2020. CBD food and beverage sales also dipped significantly.

The plunge was even more spectacular in mass grocery and specialist retail outlets (excluding Whole Foods and Trader Joes) tracked by SPINS/IRI. There the CBD dietary supplements category hemorrhaged 45.1% in annual sales from $123.4 million in the 12 months to May 2020 to just $67.7m in the year to May just gone.

More encouragingly for the sector, the year-on-year drop was down to 31.5% if just the previous 12 weeks were considered – from $20.9m in 2020 to $14.3m this year – reflecting the easing of lockdown restrictions across the country and some kind of swing back to brick from click retail that became the go-to pandemic shopping mode as stores stuttered in state after state.

The fact hemp prices have dropped has helped some CBD players improve their margins even if raw SKU sales dipped. Charlotte’s Web saw revenues rise 9.1% in Q1 and others like cdbMD growing 77% during 2020​, with CEO Martin Sumichrast reporting raw hemp costs were down about 90% since the Hemp Farming Act brought industrialized hemp into play in December 2018.

More common were some pretty serious dips of the likes seen by CV Sciences – Q1 2021 dropping 41% on Q1 2020.

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