Chart: The days of CBD-only stores may be numbered

While hemp and marijuana may be close relatives, most hemp-derived CBD retailers don’t sell the products alongside medical cannabis. But as state laws around cannabidiol continue to change, stand-alone CBD stores may become a relic.

According to estimates from Hemp Industry Daily in the 2018 Hemp & CBD Industry FactbookCBD sales in the U.S. are expected to exceed $1 billion by 2020.

Today, only 3% of hemp and CBD retail respondents to a survey for the Factbook described their shops as medical or recreational marijuana stores.

But that may have to shift – at least for physical stores.

At least three states – Ohio, Michigan and California – have banned the sale of cannabinoids and products that include it outside medical marijuana dispensaries.

Texas state officials had announced a similar plan, but the proposal was put on hold, pending further review.

Enforcement of the provisions has been uneven but has impacted business plans for companies in the space.

While storefronts have become a target for state agencies, sellers of CBD products are seeing strong success online.

Among retailers focusing on hemp and CBD products, more than 60% sold their wares online only, not at a physical store.

The capital required to start an online hemp and CBD store is a fraction of the investment in a physical location, making the internet a natural home for many hemp growers and extractors looking for a place to sell directly to consumers.

20 comments on “Chart: The days of CBD-only stores may be numbered
  1. George C. on

    It would be very helpful if you would provide a list of companies (publicly traded and privately held) with stand-alone CBD retail store ownership — number of stores, locations, etc. Also, a similar list of companies that are or will be selling on the internet (direct and/or through established retailers such as Amazon) would help to round out the picture.

    Thank you for your excellent reporting.

    Reply
  2. Paula Damaso on

    I would also like the same information that George C is asking for ? Is it possible to receive this information ?

    Thank you
    Paula Damaso

    Reply
  3. JC Penny on

    Planning on getting into the business in OK. Question, how do you sell on line when there are laws on age, what state they are in [selling across state lines], medical card verification and probably many more issues I don’t know about?

    Reply
    • David Valdez on

      Hey there My name is David Valdez and I have been in the medical cannabis and Hemp space for over 10 years and have been able to help specific individuals like yourself in getting into the industry. I have helped many businesses get into many different avenues this industry has to go down. So depending on what you are exactly trying to do and what field your getting into will determine and answer all your questions. The MJ Biz Con is a perfect place to go and get a lot of information, in fact A REAL LOT of information for the exact field you are trying to get into.

      Reply
  4. Key on

    I think whole plant CBD is still legal to sell in California. I’m not sure about other states. But whole plan is the one that Sandra Gupta talked about on the CNN Special some time ago. The Entourage effect. But now they’re able to offer it without the high THC potency so therefore it’s legal to sell as CBD whole plant extract
    Who knows! Lol!

    Reply
  5. Marfynorth on

    In the coming months, medical marijuana market is likely to escalate many folds as some States are set to vote “Yes” on the opinion on legalization. The results of the mid-term poll may be far-reaching about the legalization of medical marijuana at the Federal Level. Fortunately, medical marijuana products including CBD tinctures & oils etc. are already emerging as a “hot selling” substitute for conventional medicines including opioids. This reason may also force the stand-alone CBD retailers to consider diversification of their product range. Several reputed online stores are already delivering a wide range of 100% Organic CBD Oil across the States.

    Reply
  6. WILLIAM NEVIUS on

    I would like your opinion on the future status of CBD stores only if the 2018 Farm bill is passed in its current form, which moves industrial hemp under the direction of the Department of Agriculture?

    Reply
  7. Josh on

    “While hemp and marijuana may be close relatives” is not true. Its a false distinction used by the hemp industry to provide a legal loophole to grow cannabis sativa. Marijuana is a perjorative word used by the government during the war on drugs. Lets drop it use. Its all cannabis. Hemp and cannabis are the same plant, cannabis sativa. What we have historically called hemp looks long and fibrous, while cannabis has much larger flowers. The 2014 Farm Bill signed by Obama codified the distinction by identifying hemp as anything with less than 0.3% THC. This was merely a convenient loophole to allow corporate farming of cannabis sativa and not be subject to the same laws that govern the same plant with higher THC levels. All those high CBD cannabis plants we grew along with our high THC cannabis that all looked the same have suddenly become different? Now the high CBD is -hemp- and the high THC is cannabis? Its great that folks think that CBD is THE holy grail of a cannabinoid when we only advertise 2 of the 150 cannabinoids, CBD and THC. Research shows its the entourage effect that is most important. Same reason making a pill from 1 cannabinoid isn’t ever going to approach the efficacy or medicinal value of a whole plant grown in the sun. To each their own. But educate yourself. I’m buying a whole plant tincture from a dispensary and you can by some european sourced CBD oil that you can find at the gas station. Unfortunate people don’t realize the distinction or smoke blowing taking place.

    Reply
  8. maria Hernandez on

    So the cbd is just from marijuana ? I put some oil on my hands and it smelled just like weed . If I wasn’t on methadone I would buy a gram and cheaply get rid of pain. Instead its 30 dollars for .15 of an ounce of hemp oil and cbd . Someone’s figured a way to make a fortune selling to people that would never touch marijuana .I hope to be one who won’t make a fortune but will be there to catch the trickle down dollars that fall. Great post Josh.

    Reply
  9. Stephen on

    CBD Products are booming. Since it’s still an unregulated industry, you have to be careful of what you get. Most companies are using isolite, which is open extracted using chemicals. Other use cbd from China which had been conveniently grown. Make sure you are getting something full-spectrum and organically grown.

    Reply
  10. Brian Foltz on

    Your headline is not supported in any way by your article, looks like you just wanted to get attention and nothing else. You “article” is just random facts, although very interesting, but with no conclusion your headline is FLAT WRONG. CBD only stores are booming.

    Reply
  11. Scott Clark on

    Angie -where do you source your CBD? How long have you been selling online? Do you mind sharing what your sales looked like after the first 90-180 days?

    Reply
  12. Wes Weston on

    I guess I missed this a few months ago but maybe a little talk about the challenges whether it be brick and mortar, both physical or online or online only is ok with y’all. If you think brick and mortar is the anchor in today’s world for any retail business and will continue to be so, you have to not just look at stats but actually trends of how business evolves with the advent of the online world. Today yes, brick and mortar is “booming” because people are not (as a whole) at the “educated buyer” level..yet. Yes there are many people that use, understand and evangelize CBD but they are not driving the growth of the (2018) $800M industry because that community of people is still small. The growth will happen as awareness of the value spreads to those that want to try and hopefully embrace CBD for what it can do. As the buyers become more educated and the word becomes better known to the mainstream, the touch and feel aspect becomes less important to the consumer and this is where online will outpace the physical store. Think I am crazy? Look at what Amazon does everyday, the demise of the bookstores, JC Penny is on the ropes, Sears is all but gone. Why? Not because they didn’t carry products people wanted, but because it becomes very hard to compete in a low(er) overhead world that online sales provide. Today, yes the physical storefront gets noticed. Tomorrow…not as much. It all comes down to selection, economy of scale and covenience.

    This is a very young industry and in the grand scheme, a mere dot at $800M as an industry, with projections over the next 48 months or so showing that doubling (more realistic) with some saying a possible boom to $20B in a few years (optimistic but possible I guess). Not hard to do the numbers and keep in mind..not all is documented at this stage. If anyone is old enough to remember the .com boom of the 90s and when two men and an idea was “worth” $5M in investment and as the dust settled only a handful of anything survived, this is it again. Do not think for a minute that federal regulations, compliance and oversight will not descend on us either. We see this with confiscations, whether legit or not, happening now…yes small in the overall picture but as the industry grows and depending on who wants control it will happen and this will have a negative impact on the brick and mortar business without a doubt. It is apparent that this industry will be dominated by online sales, the question will be when. If you are not ready for it though, you will be left on the corner, maybe doing ok but maybe not since getting a web presence and operating it consumes less overhead and allows for a consumer to see through a single-pane of glass the products they want and in 2-3 days it sits at their front door. Hard to argue with that because it is just a fact we see everyday.

    The marijuana and CBD community is actually small today. If you live in Colorado or California you see it as big…way big. Stores are everywhere, it is in the news every other page. However, anywhere else it is still viewed as boutique and not as mainstream. Just because you live in Miami or Dallas and happen to see a store or a sign here and there, does not mean that if is doing millions or dollars and really it is not (unfortunately because I wish it would be to the contrary). Now you say, heck I will buy some this wholesale product, build a website and whammo I am in business online then and going to do thousands a month right out of the gate…well you have no idea the challenges. Brick and mortar have challenges today (well people have to drive there) and dual storefront and online have even double the challenges and online alone has some big obstacles that some just do not know about and I mean that even if you have been doing online CBD sales for say a couple years! People will tell you things about payment gateways and getting shutdown while others will tell you that they do it through Stripe, PayPal, Square or even post to Amazon and are making a “killing”. Well making a “killing” is a subjective term and I can tell you that having your gateway shutdown does indeed happen. This is not child’s play and with the FDA being granted oversight in the 2018 farm bill, the world will change whether you believe it or not. Heck, try advertising to drive traffic to your online presence. Try posting anything about CBD through Google without obscuring the product (which makes it all the more confusing to the potential customers). Get your Facebook page and think you are going to publish about CBD?….yes you will see it out there and yes people say they have done ti. What is that ratio of success to failure and for how long?

    Reply

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