ATLANTA — Cannabidiol (CBD) products, items derived from cannabis and hemp, have arrived at retail, and convenience is aligning itself to be the channel of choice for this new category.
According to research firm Cowen, New York, the U.S. CBD market for consumer goods could represent a $16 billion opportunity by 2025. The diverse category is still mostly defined by health and wellness products. Vivien Azer, managing director and senior research analyst specializing in the beverages, tobacco and cannabis sectors for Cowen, expects categories such as food, beverages, beauty and vapor containing CBD to each generate sales of $1 billion to $2.5 billion by 2025.
The products are going through the same shakedown period that energy drinks, energy shots and electronic cigarettes experienced when they made their retail debuts. But even the relatively complex regulatory minefields that those products were forced to navigate—and some are still navigating—pale in comparison to the initial period of regulatory confusion and concerns over safety, efficacy and legality that CBD products are now experiencing.
Understand the Options
Passage of the Agricultural Improvement Act of 2018 (Farm Bill) made the growing, production and sale of products made from hemp legal nationwide. Several states are creating their own regulatory plan covering hemp, with some more restrictive on the sale of CBD products than others.
To meet the need for information and clarity on CBD products, NACS is offering two educational sessions on the topic at the 2019 NACS Show, taking place Oct. 1-4 in Atlanta.
“Cannabis, Marijuana, CBD: The Practical and Legal Outlook” will discuss the products available under the current legal framework, explore how to communicate with customers about CBD offerings or their absence, how to legally market those products and how to navigate workplace policies regarding the regulated substance. Melissa Vonder Haar, former CSP tobacco editor and now marketing director for iSee Store Innovations LLC, St. Louis, will moderate the panel, which includes Scott Sinder, partner with Steptoe & Johnson LLP, Washington, D.C.; and Steve Bernstein, partner with Fisher Phillips LLP, Atlanta. “CBD, Hemp, Edibles: What Retailers Need to Know About this New Category” will be led by Colleen Lanier, executive director of Phoenix-based Hemp Industries Association, and Kristen Nichols, editor of Lakewood, Colo.-based Hemp Industry Daily. The session will examine the differences between CBD and hemp; look at the various formats available, such as edibles, tinctures and topicals; and offer strategies for educating customers in the fast transactional environment of c-stores.
Both educational sessions are meant to help retailers analyze their current product mix and better communicate basic CBD legal and product information to staff and consumers.
“Our role isn’t to tell retailers what they should do in their stores, but to instead share ideas on potential opportunities and to advocate on their behalf so that there is a level playing field to compete,” says Jeff Lenard, vice president of strategic industry initiatives for Alexandria, Va.-based NACS. “We want to bring in the experts to help convenience retailers understand their options, navigate regulations and give them a clear direction on the do’s and don’ts for offering products with CBD.”
The NACS Show will also include a new pavilion in Hall C featuring CBD products. Retailers can preview the products regardless of local legal status, although no sampling or distribution of the products will be permitted. The CBD pavilion will have one dedicated entrance, and all badges will be scanned prior to entry.
Some of the many c-store retailers exploring CBD products include Kwik Trip, Sheetz, VERC Enterprises and Dash In. Kwik Trip, La Crosse, Wis., with more than 600 c-stores, debuted CBD products in June 2019 in select locations in Minnesota and Wisconsin. The products include CBD-infused vape pens, topical rubs and tinctures manufactured by Select CBD, Portland, Ore., a CBD oil producer. Kwik Trip also sells oral pouches from Cannadips, a division of Moorpark, Calif.-based tobacco provider Kretek International.
Sheetz, which has nearly 600 c-stores, launched a line of CBD products at more than 140 of its stores in Pennsylvania in May 2019. It is offering topical rubs and patches, tinctures, vape pens, oral pouches, capsules, pet products and more.
Altoona, Pa.-based Sheetz says all products are kept behind the counter and a 100% proof-of-age policy requiring customers to be 18 or older to purchase is strictly enforced. Employees ask for proper identification—such as a valid driver’s license, passport or military identification card—from any customers wanting to purchase CBD.
“We want to bring in the experts to help … retailers understand their options.”
Duxbury, Mass.-based VERC, a regional independent chain of 30 c-stores in eastern Massachusetts and New Hampshire, began selling CBD products in early 2019. Items include gummy bears, topical creams and tinctures.
In March 2019, Dash In, La Plata, Md., received its first shipment of CBD products—including tinctures, gummy squares, oral sprays and lotions—which it merchandises behind the counter with age restrictions for those 18 and older.
Meanwhile, drugstore chains CVS and Walgreens and supermarket chain Kroger have also debuted CBD products.
Retailers realize that consumers are hungry for information on the topic. Savannah, Ga.-based c-store chain Enmarket has not yet decided whether to stock CBD products.
“We are researching different options at this time and still deciding when or if we will sell,” says Matt Clements, Enmarket’s vice president of marketing.