CBD is everywhere. In local shops, online stores, and even hospitals. Hypothetically speaking, it’s similar to the big bang explosion. The markets are flooded with CBD products cause it works. It works pretty well against not one but many moderate to critical health issues. But, industry stakeholders now say that there are more CBD companies in the market than people. Well, this may not be true but what’s 100 percent true is that the CBD industry has grown exponentially.
Companies dealing in CBD have flooded the market with a range of products that cater to a host of physical and mental health problems. Amid a consistent rise in popularity, there’s one roadblock that is forcing many start-ups to wind up shops — the inability to distinguish themselves. In this article, we’ll try to explain how the CBD market has become oversaturated and that the lack of innovation could halt the progress of the industry.
How Popular Is CBD?
CBD’s usage, as well as popularity, rose manifold after 2018 when the US federal government passed the law to allow hemp production for making CBD. This bill, along with several positive findings by the organisations of repute like the World Health Organisation (WHO) and the United Nations, opened floodgates of companies selling CBD-based products. Though some are trying their best to expand their customer base, there are many with no knowledge of the industry and no unique value proposition that can distinguish themselves from the herd.
Some quit the idea after starting a venture for a few months, calling it unsustainable, while others believe there is a huge competition but limited scope of growth. Many think the industry is thriving and could reach well over $75 billion by 2027. Sample this: A survey conducted by a Cannabis research firm Brightfield Group, in its report highlighted how the market is filled with small players. Around 97 percent of the CBD businesses come under the less-than-$1 million revenue bracket.
What Is CBD?
It is a cannabis-based magic compound that not only enhances your power to fight a plethora of illnesses but also gives you ‘feel good’ vibes. CBD is a natural, non-psychoactive compound that’s extracted from seeds and stalks of hemp or plants, a member of the cannabis family. CBD possesses properties that allow it to interact with the Endocannabinoid System (ECS) present in our body. The ECS is a complex signalling network that works as a regulator in the body to manage several functions like hunger, relaxation, sleep, metabolism, mood and appetite. By combining with the Endocannabinoid system, CBD works as a booster dose for the body. It keeps our body system in balance. Those experiencing stress in life or facing chronic pain issues or seizures problems have immensely benefited from the use of CBD products.
What’s The Current Scenario?
According to experts, the CBD industry will keep on growing rapidly over the next couple of years. In the current scenario, only three countries have fully legalised cannabis. As more and more countries are opening up towards its adoption, there is a huge scope in the CBD industry. But it is heading towards slow consolidation, which is necessary for it to grow. A 2020 report by Brightfield Group said hundreds of small CBD-based brands have disappeared in recent years in the United States. The consolidation leads to the formation of bigger companies with bigger footprints. It’s similar to tech disruption and consolidation where the space is led by big three — Google, Facebook, and Apple.
Who Will Rule In The CBD Industry?
After the passing of the Farm Bill in the US, there was a huge mushrooming of CBD companies in both online and offline space. You could find small outlets focussing on CBD and other legal cannabis-based products in almost every big or small city. But that scenario changed in just two years, thanks to coronavirus. The government restrictions made the physical retail business unviable for many companies as rents kept on piling up and sales went down.
But, at the same, it gave a boost to the online industry. Small companies, which hold almost 97 percent CBD market share, started spending more on boosting online sales. Unlike before, they spent money on online ads as people remained holed up inside their homes and ordered almost everything online. The current position of the CBD industry is that it seems to have made a permanent shift towards the online mode now. Only those developing a successful online strategy will thrive.
How To Stay Relevant In A Competitive CBD Market?
The CBD market is indeed very competitive. The legal complexities around cannabis make the business even more difficult. But, if you are determined and think you can still make it to the top 10 CBD players in the US, you must adopt some proven strategies to enhance your presence.
Here Are Some Key Ideas!
- Know that content is the king. How well your CBD brand is working is defined by how smart and powerful your content strategy is. From creating online campaigns to running advertisements on different platforms, the content strategy plays an important role in making your brand famous. Build content that your audience craves, understand their behavior, and tap into it.
- Secondly, write blogs about the CBD industry, the topics that are in buzz. Tell people about the benefits and drawbacks of different CBD products. They want to know genuine information. Clear their doubts and put your brand at the forefront. The blog should be SEO-optimised to answer the most relevant questions that internet users are seeking answers to.
- Thirdly, fill your online with visual content, including pictures and videos.
- Last but not least — start a podcast. As per Statista, the number of podcast listeners will increase to over 160 million by 2023. Regular updates on the CBD industry are essential to keep them abreast of the latest developments. In essence, building an online marketing strategy is the key to stay relevant in the competitive cannabis industry.
