A challenging year could be ahead for the U.S. CBD industry. At the start of 2023, the Food and Drug Administration announced it was unable to regulate the CBD industry, leaving the matter to Congress. If it remains unregulated, CBD market projections will be decidedly lower than what could have been expected when FDA guidance was a possibility.
Meanwhile, the hemp industry is caught between wellness and cannabis as some market CBD for therapeutic purposes and others delta-8 THC for psychoactive fun. As such, we see purchase channels and product type preferences shifting dramatically from 2020 to 2022.
Brands wondering how to market CBD products in 2023 need CBD data. The data reveals the distinct consumer groups - the Mind Menders, Life Lifters, and Pain Pausers. CBD marketing experts deliver products that solve the unique needs of each group.
With an uncertain regulatory future, a marketing strategy driven by CBD insights from today’s consumers sets up brands to beat out competitors and win over customers.
The Market Data: CBD market size growth is heavily dependent on regulation. 2027 sales are forecast to be over $4 billion dollars greater if regulatory reform occurs by 2024 than if no such changes are made.
Online CBD Purchasing Trends Down
During pandemic-era stay-at-home orders, CBD buying exploded online. The trend peaked at the end of 2020 when 51% of CBD users were purchasing their CBD online. While online CBD purchasing slightly declined in 2021, it took a sharp dive in 2022. From W4 2021 to W3 2022, online CBD purchasing dropped 114% from 40% buying online to only 19% doing so.
See the data on purchase channels over time in the infographic: Data to Win in US CBD
There has been a noticeable increase in the number of consumers purchasing CBD at smoke and vape shops. This rise can partly be attributed to recent changes in vape and e-cigarette laws. With the implementation of the Vape Mail Ban, CBD vape users may have to pay more to ship CBD cartridges to their homes, leading many to turn to local shops for their CBD needs.
The prevalence of CBD buying in cannabis dispensaries tells us two things – consumers are gaining access to CBD in cannabis dispensaries and consumers are confused as to what a “cannabis dispensary” is. First, CBD’s place within cannabis products continues to be better understood. Balanced 1:1 and CBD-dominant options – especially within edibles – are common even in newer cannabis markets.
Second, the average consumer is having a hard time differentiating licensed cannabis dispensaries from retailers offering hemp-derived THC. This confusion is best articulated when looking at the Southern region of the United States. This area has been slow to adopt cannabis legalization, with access currently limited to medical markets. Despite this, 26% of CBD consumers in this region report buying CBD in dispensaries.
Retailers selling hemp-derived products – which offer CBD and products like delta-8 THC and HHC – often position themselves as cannabis dispensaries. The products on their shelves mimic both legal and legacy cannabis products. These unlicensed hemp retailers are taking advantage of the fact average consumers are not aware of the legal separation between hemp-derived cannabinoids and cannabis.
CBD Gummies Trend Up
In Q3 2021, consumer-reported gummy use had just surpassed tincture use for the first time since pre-pandemic W1 2020. Now one year later, 55% of CBD consumers report using a gummy in the past 6 months. Gummies have gained a clear lead over tinctures as the top-reported product type used.
See the data on gummies vs. tincture use in the infographic: Data to Win in US CBD
The US CBD market is very competitive, and brands have had to put their best innovations forward to stay afloat. Gummy innovations have resulted in better formulations, more cannabinoid options, and tastier products overall. This plus the convenience of gummies over tinctures has made them a hit amongst consumers.
Consumers that use gummies are more likely to desire relaxation over physical relief from their CBD use. However, even those that use CBD for pain have started opting for gummies more than tinctures over the past year.
The Pain Pausers are the largest consumer segment in US CBD. These consumers’ most common uses for CBD are for joint pain, arthritis, and/or chronic pain. This group’s product usage has shifted similarly to the general CBD consumer population, with gummies being used by 33% more Pain Pausers and tinctures being used by 13% fewer over the past year.
Marketing CBD to the Right Audience
With so many use cases and ways to enjoy CBD, products risk uncompelling branding if it's not clear what it's for and why the buyer would like it. Deeply analyzing consumer uses and desires, CBD users fit into three categories: Pain Pausers, Mind Menders, and Life Lifters.
We introduced the Pain Pausers earlier - consumers using CBD for pain. Mind Menders use for more specific conditions while having a different demographic profile than the Pain Pausers. Lastly, there’s the Life Lifters - a group using CBD to enhance and improve their lives rather than solve a problem.
Targeted consumer groups are useful for CBD social media marketing. For example, the Lift Lifters are a group that likes to learn about new brands on social media. Knowing who they are and where they spend their time online allows for precise, effective digital advertising campaigns.
When marketing a product, brands should determine which targeted consumer group they are serving and distribute where they are most likely to be shopping. Some brands with products and placements that work well with these groups include:
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Green Roads CBD Muscle & Joint Relief Cream available in smoke & vape shops for Pain Pausers
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Wana 10:1 CBD:THC Strawberry Sour Gummies available in licensed dispensaries for Mind Menders
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Just CBD 1000mg Gummies available in smoke & vape shops for Lift Lifers
The future of CBD market growth might be unclear, but there is still a large consumer base of CBD users to serve. CBD brands that tap into consumer insights set themselves apart from the crowd by delivering products people come back for. In times of economic uncertainty, a data-driven strategy to ensure customers continue to reach for your brand - even when they’re reaching less often - is key.
Published: 2/9/2023
