The Rise of Hemp & CBD in C-Stores

The Hemp and CBD Industry Looks to Convenience for Growth

 

February 2020

 

The Hemp and CBD industry continues to grow in the wake of the 2018 Farm Bill. According to the 2019 Hemp & CBD Industry Factbook, CBD sales grew 133% in 2019 and exceeded $1 billion in sales. Factbook credits this growth in mainstream retail locations with the big increase in sales. Before the Farm Bill, CBD products were mostly regulated to specialty shops – like marijuana dispensaries, tobacco shops and natural grocery. However, once hemp was removed from the Controlled Substances Act, CBD began to infiltrate mainstream retail, like drugstores and convenience stores.

 

CBD producers want to continue to grow. They want their products to move beyond dispensaries, head shops or nice specialty retailers to the mainstream. According to Kristen Nichols, editor of Hemp Industry Daily, “there’s no way to do that without getting traction in convenience stores.” CBD has started showing up in c-store but according to Factbook, the segment has not yet seen significant penetration.

 

But with over 154,000 retail locations, CBD companies are seeing what a huge potential the convenience space is. “The convenience channel is the most tantalizing opportunity available to the current CBD market, and one cannabis entrepreneurs are desperate to access,” Nichols states. For c-store retailers, the CBD channel is uncharted territory. Some retailers don’t know where to start or what it all means. One of the most important aspects of this is understanding the CBD consumer. Who are these consumers? What are they looking for?

 

Consumer interest in CBD and hemp products continues to grow and is expected to explode in 2020. 1 in 4 Americans say they use CBD products daily or as-needed basis, and about 40% of U.S. adults 21 and over indicate a willingness to explore CBD under the right conditions. Since the interest in CBD products continues to increase, there are several insights to keep in mind:

 

• 28% of Americans report using CBD products daily or as needed.

 

• Pain, mental health and general wellness are the key reasons cited for usage.

 

• The consumers currently driving Hemp and CBD sales are mostly female (6 in 10), have families (1 in 3), are                  under 35 years old (1 in 3), and are more suburban and rural than urban.

 

• Popular product types include baked goods, gummies, vape cartridges, beauty care, concentrated oil, candy,       topicals, chocolate, vape oil, vape pen, pill, tincture, beverage, concentrates and honey.

 

• Baked goods are the most popular type among CBD users (40%).

 

• Key attributes consumers consider when shopping for CBD products include product form (52%), potency (41%), CBD derivation (40%), price (39%), onset time (39%), duration (26%), flavor (21%), and brand (19%).

 

The global cannabis infused market is expected to grow by $17.27 billion by 2022 according to market research group, Technavio. The market is being driven by social acceptance of cannabis products. C-store retailers will continue to see the growth in this category and should start capitalizing on the opportunity now!