Is CBD a threat to THC-focused marijuana companies?

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 what 10 of the respondents to Marijuana Business Daily‘s survey had to say on the subject:

CBD isn’t a threat to the THC market

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.”

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.”

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.” 

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.” 

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

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.” 

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.” 

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.” 

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.” 

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 can be reached at [email protected]

12 comments on “Is CBD a threat to THC-focused marijuana companies?
  1. Maarten Van Wyk on

    Saying CBD sales will impact cannabis sales is like saying pork sales will impact beef sales. It’s two different markets supplying different needs. Give your heads a shake.

    Reply
    • Cecilia Sivertson on

      The legalization of medical marijuana and the production of CBD infused products are totally different markets.
      Having said that, I also see the legalization and/or prohibition of medical marijuana has pushed those in the medical market over to the CBD products as a way of expanding our recreational cannabis businesses. A great opportunity for medical patients to create their own medicines. ?

      Reply
    • ian humphry on

      remember when they said “legalized gambling in Atlantic city will hurt Las Vegas tourism” it didnt! these are 2 different markets, kind of, my wife is considering a “low dose” cbd to thc ratio treatment plan as she is very ill and in lots of pain, however she doesnt really want to “get high” as they say, so we are looking at 1:1 or 2:1 cbd to thc low dose edible treatment, there are some companies out there that see this as a very lucrative, helpful and emerging market, “KIVA KITCHENS” is one of them and if they were in my area i would try their products. i believe a low dose cbd/thc regimen could help lots of people that could benefit without the psychoactive properties being the main reason. its on the ballot for this november where we live and if mmj passes here, my wife may get the relief and help she needs.

      Reply
  2. Granny Storm Crow on

    THC and CBD work on entirely different chemical pathways in your body. They are not interchangeable in most of their uses or their effects. Even when they are doing the same job in your body, easing pain, as an example, they do it in very different ways!

    This is just more fear-mongering, trying to divide those who use medically, and those who use recreationally! CBD is no threat to THC lovers, nor is THC a threat to those who need CBD! Both have their place, however, there is a huge need for ACCURATE labeling. We need the freedom to find that “perfect” strain, no matter why we are using cannabis! We need all strains of cannabis to be legal and easily available!

    Reply
    • ian humphry on

      agreed granny,
      my wife needs a low dose cbd/thc regimen for her pain and illness, but doesnt want to “get high” as they say. we are hoping for mmj to pass here this november so she can find the relief she needs and deserves.

      Reply
  3. Lisa Pittman on

    Re: L’Eagle statement, 280e DOES apply to most CBD businesses. To the federal government, it’s still cannabis. Only narrow exceptions allow some CBD businesses, like hemp farmers not selling a product in a store, to avoid some of the 280e burden. CBD businesses do have an advantage though in that they don’t have to jump through the regulatory compliance that cannabis businesses do.

    Reply
  4. 1dyllic on

    Once marijuana is legal everywhere (and it will be, there’s no stopping this train), you can just grow CBD-dominant strains (Charlotte’s Web, anyone?) and extract the CBD from there. Flowers that contain 10-15% CBD vs flowers and stalks that contain 0.5% CBD would be a much more efficient source of CBD.

    CBD works better when there’s a little THC present anyway.

    Reply
  5. Ken Taylor on

    Whats all the fuss about? CBD sourced from different plants, Marijuana or Hemp, is just an expansion of the ‘industry’. Own it!

    Reply
  6. Kenneth Cole on

    Some excellent comments.The whole plant delivers Maximum benefits.We should encourage new users to start slowly depending on their medical problems until they find levels that ease their individual problems.
    We can’t help everyone but we can improve the quality of life for Thousands of good people,you guys are providing a great service,good luck,KC.San Diego,The Medicine Man….

    Reply

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