Marijuana Radio

Nielsen predicts the U.S. hemp-based CBD market could be a $2.25 billion to $2.75 billion industry in 2020. The company says these projections are “conservative” and already account for FDA rulings and other possible speed bumps for the hemp-CBD marketplace. In spite of regulatory ambiguity, this means brands, marketers and consumers are likely to have a large appetite for data and information about cannabis in the coming year.

And while broadcasters are largely excluded from taking a piece of the cannabis advertising pie just yet due to complicated regulations, watching these trends and the changing regulatory landscape will allow the industry to keep abreast of the fast-changing conditions and future potential.

“While the regulatory roadmap remains ambiguous, one thing is clear: The next decade for the hemp-based CBD market has the potential to be a game changer for the traditional CPG [consumer packaged goods] and retail industry,” says Nielsen. The company lists five likely trends to watch for.

Targeted Educational Efforts Will Rise

Nielsen says to expect increasing educational efforts to hit health care providers because nothing aside from free product trials is more convincing than a health care practitioners’ guidance: 50% of hemp-CBD interested adults said this would motivate them to try a hemp-CBD product, versus 16% for a family member’s recommendation, 17% for a friend’s recommendation and 15% having the product manufactured from a familiar brand.

CBD Prices Will Fall

“CBD manufacturers that narrow the price gap between hemp-based CBD products and their CPG equivalents will maximize the opportunities to compete within the CPG space,” says Nielsen. Currently, the price gap is large. Depending on potency, CBD products frequently are between four and 10 times higher than the retail price of CPG products used for comparable needs. However, the growing number of farmers and increasing production efficiencies linked to cultivation and extraction practices will affect product pricing.

Consumers Will Grow An Appetite For Ingestibles

“Capsules, gummies and beverages will significantly grow their user bases, pending the FDA’s permission for manufacturers to legally infuse hemp-CBD extracts into ingestible products,” says Nielsen. In fact, the company projects that with FDA approval, ingestible formats could grow their existing user base as much as 250%-375% in a year’s time, as these are the formats that consumers are most familiar with.

Consumers Will Pass Their CBD Curiosity Onto Their Pets

Nielsen’s data shows that 37% of dog owners who give their dogs vitamins and supplements today say they’re likely to give their dog a hemp-CBD infused vitamin in the next 12 months. However, Nielsen’s Thinking Beyond the Buzz study showed that of those who claim to have given their dog a hemp-CBD product, more than 20% used a product not specifically formulated for a dog. “It’s imperative for pet CBD product manufacturers to provide a recognizable and valued level of differentiation between their products and those intended for human consumption to ensure that this number does not grow,” says Nielsen.

A Battle At Retail Will Emerge

Over the next decade, Nielsen expects traditional brick-and-mortar CPG retail channels, including food, drug, mass, club, convenience and dollar store channels, will begin to steal share from online CBD retailers, local specialty CBD retailers and vape and tobacco shops. “An influx of new consumers will tip the scales for traditional retailers. Compared with current hemp-CBD users, our survey data shows that new CBD consumers who say they’re likely to consume CBD products in the next 12 months but have yet to consume are more than twice as likely to state that they’ll shop for CBD products at a grocery chain or mass merchandiser. These same consumers are more than 3.5 times more likely to state that they’ll purchase hemp-CBD products from a chain drug store,” says the company.

The ever-shifting regulatory landscape of this industry will continue to offer new opportunity to marketers as the new decade begins. But at this juncture, broadcast attorneys continue to suggest stations make decisions on whether to accept CBD ads only after careful consideration. “There are no clear answers on CBD advertising yet,” attorney David Oxenford said in a post last year. “Consult with your own attorney and give some careful thought as to whether or not to accept CBD advertising on your station, and watch for developments as they occur in the coming months.”