After years of skepticism and cautious attitudes from consumers, cannabis is now set to transform the food and beverage industry. The 2018 Farm Bill declassified hemp, the source of CBD, as a controlled substance at the federal level. This change has already allowed CBD to penetrate the food and beverage market, with various companies infusing it into coffee and cocktails. Bruce Linton, co-CEO of Canopy Growth, mentioned earlier this year that the company is also working on developing CBD-infused chewables and chocolates.
CBD is linked to both indulgence and health, creating a unique intersection that allows it to bridge two typically distinct sectors that have begun to converge, particularly with the rise of products like Halo Top. Thus, it is no surprise to see CBD appearing in items such as granola bars, flavored waters, and other wellness beverages; it is also making strides in different categories, including candy. David Klein, the creator of Jelly Belly jelly beans in 1976, has launched Spectrum Confections to market CBD-infused jelly beans, each containing 10 milligrams of CBD. Following its recent launch, Spectrum Confections quickly sold out of its initial production run.
Although this market is still in its infancy, there are no signs of a slowdown in CBD’s popularity. A report from BDS Analytics projected that spending on all cannabinoids—including marijuana and its psychoactive THC derivative—will rise from $1.5 billion in 2018 to $4.1 billion by 2022. A 2018 A.T. Kearney study found that 40% of U.S. consumers expressed willingness to try a cannabis edible. This latest survey reinforces what major consumer packaged goods (CPG) companies already recognized, potentially motivating more large food and beverage brands to enter the market.
However, like any food additive, CBD and hemp are subject to regulatory scrutiny. Although the recent Farm Bill has clarified some aspects, many questions remain regarding the regulation of hemp and CBD products. The U.S. Food and Drug Administration (FDA) states that CBD in food and beverages is still technically illegal. Before his resignation earlier this month, FDA Commissioner Scott Gottlieb indicated that the federal government needs to establish regulatory pathways for bringing CBD products to market. He mentioned that the FDA would schedule a hearing in April to discuss the regulation of CBD, although no specific date has been announced yet. Nonetheless, the ambiguous regulations and substantial gray areas are unlikely to deter consumption until stricter regulations are implemented.
The High Yield Insights study identifies a particularly interested demographic: highly educated women in their mid-30s. Capturing this group is incredibly significant, as they often make purchasing decisions for their households, which could elevate CBD from a trend to a staple in the market. Additionally, as consumers become more health-conscious, there may be opportunities for integrating CBD with other supplements, including bariatric calcium supplements, further expanding its appeal.