CBD Shows Signs of Slowing Down

Posted on
February 20, 2020

It’s hard to pinpoint the exact moment CBD became popular, but we can all agree the market has seen explosive growth over the last couple years. From CBD gummies and oils, to bath salts, chocolate, body lotion and more, CBD is everywhere and in everything. And while this industry is certainly thriving, e-commerce trends signal the CBD craze could be slowing down.

 

To back-up, what is CBD exactly?

CBD, aka cannabidiol, is a naturally occurring compound found in the resinous flower of cannabis, also known as hemp. And thanks to the passage of the US Farm Bill in 2018, it became legal to sell hemp and hemp products in the U.S., resulting in an explosion of CBD products in the marketplace.

 

And what makes CBD so popular?

Because CBD is from the non-psychoactive portion of the plant, the effects are subtle and said to ease anxiety, pain and calm the nervous system. Plus, the variety of forms CBD comes in, from oils to edibles, makes it appealing to an array of users. In fact, some of the top CBD searches on Amazon suggest consumers are looking for CBD oil for pain most often (i.e. cbd oil, cbds oil for pain, cbd oil for pain). Amazon search trends also indicate consumers are looking for CBD for dogs, as it has also been shown to treat pain and anxiety in dogs.  

 

Are there risks?

The U.S. Food and Drug Administration has not approved CBD use, stating in an article from this past July “there are many unanswered questions about the science, safety, and quality of many of these products.” While they recognize the potential benefits of CBD, questions remain about its safety and they are committed to science-based decision making.

 

What is the future of CBD?

As the FDA continues to explore potential ways for CBD products to be lawfully marketed, some say the craze is getting out of control. With so many questions stirring about the potential risks of CBD, we’ve noticed a softening in the overall e-commerce market. Specifically, on Amazon, searches for CBD products has been steadily declining since late summer, with YTD search volume down by nearly 80%.  Brands are also spending less to advertise their CBD products, with paid traffic on Amazon down 60% YTD. Additionally, the top selling CBD hemp oil product is experiencing a similar decline as retail sales drop 70% YTD.

Although there is speculation the CBD market could reach $20 Billion by 2024, the underlying questions regarding its potential risks are causing a dramatic shift in the e-commerce marketplace.

Posted on
February 20, 2020
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Strategy Briefs
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