A lack of education and clarity in the fledgling CBD marketplace means consumers and retailers who are clamoring for products containing the compound often don‚Äôt know what they‚Äôre getting.¬†
‚ÄúThe CBD you will buy is not evaluated or approved by the FDA,‚ÄĚ said Alexander McCaffrey, a consulting manager at Grassi & Co. CPAs in Jericho. McCaffrey previously served as director of finance for Curaleaf, a multistate operator in the cannabis and hemp industry, and currently advises companies in the industry. ‚ÄúCBD falls in the bucket of nutraceuticals, along with things like St. John‚Äôs wort. The FDA has not assessed whether it treats or cures something, so you can‚Äôt make a claim.‚ÄĚ
CBD is a cannabinoid, a class of chemical compounds that act on the endocannabinoid system in the human body (as well as in dogs and other mammals). There are more than 100 cannabinoids exhibiting varied effects that have been isolated from cannabis, according to Wikipedia.
‚ÄúJust like any other industry, there are regular sellers and there are opportunistic sellers,‚ÄĚ McCaffrey said. ‚ÄúThere are things you can do to make sure you‚Äôre getting a higher-quality product.‚ÄĚ
Consumers and retailers should learn the difference between isolate and full-spectrum, McCaffrey said. Full-spectrum CBD products contain other trace elements from the hemp plant.¬†
‚ÄúIt‚Äôs like taking vitamin C versus eating an orange,‚ÄĚ Alexander said. ‚ÄúIt‚Äôs better to have the orange, because it has flavonoids. You‚Äôre better getting what it‚Äôs like in its original form; therefore full-spectrum is better.‚ÄĚ
Also, Alexander said, look at the packaging and the marketing.
‚ÄúDoes it look like premium packaging, and how is the marketing done?‚ÄĚ he said. ‚ÄúIf they‚Äôre putting enough thought into presenting their product, chances are they‚Äôre doing other things in the business you would want, such as making sure the manufacturing process is clean and buying from reputable suppliers. Usually you can tell; if it looks like it took some money to put it together, it‚Äôs probably the case. Of course there are exceptions.‚ÄĚ
Alexander also recommends scanning the QR code on the packaging. ‚ÄúThe QR bar code is usually linked to lab reports on the product or the strain it came from, so you can see if it‚Äôs a good full-spectrum product and not a fly-by-night company,‚ÄĚ he said.¬†
Alexander also advises consumers and retailers to calculate the price per milligram.¬†
‚ÄúTake the selling price of the product and divide it by how many milligrams of CBD it contains,‚ÄĚ he said. ‚ÄúSo a $25 product with 250 mg of CBD would be 10 cents per milligram. It gives you an apples-to-apples way of comparing how much product you are buying. It‚Äôs like looking at the price per ounce when you go to a grocery store.‚ÄĚ
For retailers, it‚Äôs even more critical to put a good CBD buying strategy in place.¬†
‚ÄúYou‚Äôre selling a product that people will come back to if it‚Äôs effective for them,‚ÄĚ McCaffrey said. ‚ÄúYou want to be able to price it right and you want to evaluate whether it‚Äôs really worth what you‚Äôre charging the consumer. Many retailers see this new, novel product that is basically a panacea ‚Äď it cures everything ‚Äď and they think all they have to do is buy it and it will fly off the shelf. But you have to have a sound business plan, have meetings with your lawyers and plan it all on paper, and not be enticed and blinded by the opportunity. A lot of businesses that are getting into this are not going to make it.‚ÄĚ
The CBD market, however, is expected to continue its rapid growth over the next few years. A recent study by BDS Analytics and Arcview Market Research projected that CBD sales in the U.S. will eclipse $20 billion by 2024.¬†
‚ÄúThere are a lot of conflicting laws, but the momentum seems to be going overwhelmingly in one direction,‚ÄĚ McCaffrey said.