Rise of CBD raises concerns for marijuana executives

CBD products are often marketed as having similar health benefits to medical marijuana without the psychoactive properties – essentially all of the medicine but none of the high.

That growing mainstream appeal has some cannabis business owners concerned that CBD is a threat to the THC-reliant marijuana market.

According to cannabis research firm Brightfield Group, the CBD market could be worth more than $2 billion a year by 2021.  Two-thirds of that CBD would come from hemp, not marijuana, the company projects.

Part of the concern comes from market access. In states like Colorado, consumable products – including CBD – can only be sold through marijuana retail stores if the product contains at least some THC.

But CBD products not containing THC are sold online and in natural products stores around the country.

Marijuana Business Daily surveyed about two dozen cannabis industry professionals across the country – business owners, consultants and analysts – to get their take on whether CBD and THC can coexist in the market.

More than half said they didn’t see CBD products as a threat to THC-focused businesses, but there is concern about the rise of the CBD market.

Here’s how 10 of the respondents to Marijuana Business Daily‘s survey responded:

CBD isn’t a threat to the THC market

CBD THC, Rise of CBD raises concerns for marijuana executives

Tim Keogh

Tim Keogh, CEO, AmeriCann: “I see the proliferation of CBD-only products as a compliment to the full-spectrum, whole plant cannabis market rather than a threat. The news around CBD and its availability is opening up new consumers that do not have any relationship with cannabis as a therapeutic solution to try new products. This changes the perception and decreases the stigma of cannabis.”

CBD THC, Rise of CBD raises concerns for marijuana executives

Adrian Sedlin

Adrian Sedlin, CEO, Canndescent: “Each compound has unique properties, so whether it’s the medical market or the adult-use market, the cannabinoids address very different needs and desires. Moreover, there is the entourage effect, which supports the idea of symbiotic, dual consumption. Like most things with the plant, it’s harmonious.”

CBD THC, Rise of CBD raises concerns for marijuana executives

Avis Bulbulyan

Avis Bulbulyan, cannabis consultant: “The CBD-focused industry has its own set of problems, but at least for the immediate future, they’re very different markets. At some point this will probably change, but probably not in the near future.” 

CBD THC, Rise of CBD raises concerns for marijuana executives

Karen Freese

Karen Freese, cannabis consultant: “There’s plenty of space for CBD products to coexist in the marketplace with THC products. People want them. Each person has a unique reason and need for why they choose one over the other.” 

CBD THC, Rise of CBD raises concerns for marijuana executives

Kris Krane

Kris Krane, president, 4Front Advisors: “I don’t see it as much of a threat. I think there’s a market for CBD products, and I’m sure there’s some overlap. But I haven’t seen any evidence at this point that CBD sales in a legal market are cutting into the sales of a state-regulated cannabis market. I just don’t see it. The CBD market is not that big.”

Reason for concern

CBD THC, Rise of CBD raises concerns for marijuana executives

John Andrle

John Andrle, owner, L’Eagle Services: “Obviously, CBD is a threat to the THC market. For starters, CBD is marketed as having all the same medicinal benefits as THC without the ‘crazy high’ (as one Facebook video proclaims). It doesn’t. There are hardly any barriers to selling CBD – any 10-year-old can buy it online, in vending machines, at pet shops and in salons and spas. Marketing can be conducted without (the same restrictions as marijuana). Respective of IRS taxes, there is no 280E for CBD-based companies to deal with, yielding profits automatically 25%-39% higher.” 

CBD THC, Rise of CBD raises concerns for marijuana executives

Matt Karnes

Matt Karnes, founder, GreenWave Advisors: “It’s a legitimate concern. The CBD market has a more-focused product offering a broader consumer appeal as it relates to different ailments, appealing to a broader range of people.” 

CBD THC, Rise of CBD raises concerns for marijuana executives

Matt Sampson

Matt Sampson, owner, North Coast Growers: “The segment of the market that will be most impacted is the ‘no smoke, no smell’ crowd who also prefer mellows highs or no high at all – the people who like to relax and know they are doing something beneficial for their health and wellness without going on the unpredictable adventure that can often be the experience people have getting high on today’s medical and recreational cannabis products. There is a huge segment of the population who would consume non-psychoactive CBD but would never consume cannabis with THC.” 

CBD THC, Rise of CBD raises concerns for marijuana executives

Michael Mayes

Michael Mayes, CEO, Greenwave dispensary: “Yes, the CBD-focused market is a threat to the THC market for those just looking for CBD. I have about 100 patients that only buy hemp-derived CBD products. It’s because of their sensitivity to THC. Epileptics and pediatric patients don’t want any psychoactive effect whatsoever. But you absolutely need some part of THC for CBD to work effectively.” 

CBD THC, Rise of CBD raises concerns for marijuana executives

Donald Morse

Donald Morse, chairman, Oregon Cannabis Business Council: “THC-focused companies should be scared. A lot of people selling CBD are making outrageous claims about what it does for people. We all know it doesn’t. But we’re selling it in dispensaries. We’re helping the CBD industry by promoting their product alongside the THC industry’s product, which is like shooting yourself in the foot.” 

Bart Schaneman covers cultivation and extraction for Marijuana Business Daily and can be reached at [email protected]

2 comments on “Rise of CBD raises concerns for marijuana executives
  1. Jason on

    I would particularly point out some of the more ignorant responses. ‘Outrageous’ claims are abound in the cannabis space, not just with CBD companies. There is plenty of anecdotal evidence that hemp CBD is successful for many folks. There’s also plenty that show that it is helpful for a greater number of ailments than delta 9 THC is.

    CBD is an intro to the entire marketplace. Many people are fearful after being psychologically abused about not consuming cannabis for their entire lives, and a good number cannot, or will not, deal with the high. If anything it will bring people into the fold that would not have been open to cannabis in the first place, and demonstrate that they too can be healed with the plant.

    I have been in the CBD industry for 5 years. I know that most of us prefer positive minds in the cannabis market. The CBD and THC markets (and CBN and CBG) are complimentary, and creating animosity for no reason is not needed.

    I will agree with Mr Andrle that the 280E is a significant issue for the medical cannabis industry, and that the gov needs to get out of the way of innovation, and not just with cannabis.

    • The mad Yooper on

      I will agree that the government needs to get out of the way and that one of the two has to be first. Having said that I think Karen Freese is spot on. There is and will be a seat at the table for both. It is just going to take sometime to shake it out.

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