Understanding the CBD Consumer

The popularity of CBD products has exploded in the U.S. in recent years, with sales in the U.S. cannabis dispensary channel alone rising from $8.4 million in May 2016 to $56.9 million in May 2020. And hemp-derived CBD products, containing less than 0.3% THC, are increasingly available via general retail channels, though CBD ingestibles are still officially off limits for sale in general retail channels in the U.S. and most other jurisdictions.

The expansion of CBD product sales being dispensaries is taking place rapidly. BDSA forecasts the dispensary channel’s share of CBD sales to fall from 63% in 2018 to just 24% in 2024, as ecommerce and general retail share grows.

And, increasingly more CPG companies are exploring opportunities in the hemp-derived CBD market—and future FDA approval of CBD as a food additive will only expand growth further beyond the dispensary channel.

With this growth and the opportunities presented by the many product channels CBD products can now be sold in, the key to effectively addressing this burgeoning market is understanding the CBD consumer. Who consumes CBD and why? What needs are CBD products addressing?

BDSA Consumer Insights research identifies many similarities between those who consume hemp-based CBD products and those focused on THC or full-spectrum cannabis products, including:

• Physically active,
• More likely to pursue fitness and outdoor activities than non-consumers,
• More likely to have earned a college degree, and
• Fall into higher income brackets.

There are differences too. Even though similar numbers from each group agree that cannabis is healthier than alcohol, CBD consumers are more wary of cannabis legalization than cannabis consumers. While 76% of cannabis consumers in adult-use legal states agree with full legalization, only 61% of hemp-derived CBD consumers are on board.

While there are some key differences between CBD consumers and cannabis consumers, the two groups consume CBD and cannabis products for similar reasons. Health and wellness concerns are a primary reason consumers to turn to CBD.

• BDSA Consumer Insights data shows that consumers report better sleep, pain relief and anxiety relief as key benefits of CBD consumption.
• Topicals are more likely than other products to be consumed for pain relief or other health issues, while consumers seeking a sleep aid or relaxation are more likely to turn to ingestible products.
• CBD consumers are drawn to it for both wellness and recreational benefits, although a higher percentage report use for health reasons than cannabis consumers.

As with many segments of the total cannabinoid industry, consumer knowledge of CBD products is still limited. This provides brands a unique opportunity to guide the education of consumers and growth of the market. Only 42% of adults 21 and over are familiar with CBD and only 22% can articulate what cannabinoids are. By focusing on marketing strategies that include consumer education on CBD and its benefits, companies can expand their market reach and take advantage of the broad spectrum of general retail channels in which CBD is now available, as CBD—and, soon, many other non-psychoactive cannabinoids—continues to expand beyond the dispensary channel.