CBD Entering into Convenience Stores

annabidiol (CBD) products have taken the US by storm.  Since the 2018 Farm Bill, hemp or cannabidiol produced from the cannabis plant has been legalized in various places across the US.  Although in unregulated forms it still remains a Schedule I substance under federal law, CBD can now be produced under strict federal rules and only by licensed growers.  

This has opened up the opportunity for convenience stores to generate significant profits as CBD becomes more mainstream and the demand for these products only grows.  Nevertheless, c-stores face many legal issues in stocking CBD products that must be addressed and overcome.  

Below, we discuss how c-stores can benefit from CBD’s growing popularity and what we can predict from c-stores stocking CBD products in the future!

Legalization of CBD Products in the US

Hemp is defined in the Farm Bill as containing less than 0.3 percent THC.  THC is the active ingredient of the cannabis plant which causes the effects Marijuana is known for.   In contrast, previous US Acts like those in 1970 banned all cannabis products rather than differentiating between hemp and non-hemp cannabis.

Hemp plants and cannabis plants are both the same species.  Legally, hemp is defined as a cannabis plant that contains 0.3 percent or less THC, while marijuana is a cannabis plant that contains more than 0.3 percent THC. CBD can be derived from both hemp and marijuana plants

However, CBD laws currently vary from state to state.  Many states including Idaho, New Hampshire, Mississippi, and South Dakota have not introduced hemp legislation.  This has created large gray areas within the CBD industry. For instance, some states allow CBD to be contained in food products whilst others only permit It in cosmetics or not at all.

Although regulated CBD has now been legalized in the majority of US states, consumers are still wary about buying hemp products.  This is because they have been traditionally stigmatized as being used by people wanting to get high.  Despite this concern, research into CBD sales predicts that by 2025, the CBD industry will be a $47 billion market.

Introduction Into C-Stores

Since the Farm Bill, CBD sales in c-stores increased by 2,276% in 2019 reaching around $122 million in profits.  Availability of CBD products in c-stores also swelled by 390% from 2018 to 2020.   These figures are telling signs that CBD products in c-stores are set to become more popular as time goes on.

Around 47% of Gen Z and millennials state that they will now use CBD more frequently according to one study.  This means that c-stores will have to adapt their marketing strategies to meet the needs of young people.  For instance, some fun ways c-stores can target CBD to younger consumers include selling it as gummy candies and chocolates which are tasty as well as effective!  

So, by stocking these products, c-stores are setting themselves up for potentially enormous profits.  Despite the stigma, CBD will inevitably generate money for the economy and could help to drive new cannabis laws in the future

CBD products in c-stores come in other forms including the most popular drinks and topicals. Yet, c-stores need to think about what people want to use these products for in order to market them successfully to their shoppers.

According to a study by Brightfield Group’s consumer insights, the most common medical conditions that c-stores report their customers buy CBD products for include anxiety (55% of respondents), depression (40%), insomnia (29%), chronic pain (24%) and PTSD (18%).

Regulatory Issues

Despite the above, one major regulatory issue for c-stores selling CBD is that they cannot market CBD as having medical benefits.  The FDA has cracked down on products claiming to improve sleep, ease pain, or help with any of the above problems.

So, c-stores need to keep such claims out of their marketing strategies and not stock any products which make medical assertions on their packaging.  This regulation alongside the state regulatory variations implies that stocking CBD in c-stores can be a ‘hassle.’  

However, there are certain tips that experts recommend for c-stores when navigating CBD regulations which will make life a whole lot easier.   Firstly, it’s important to understand where the products you are buying are coming from.

If your products are coming from an unregulated seller, this is potentially dangerous for your customers and a criminal offense under federal law.  Secondly, ensure that the products are legal in your state and locality.  Always check your local guidelines to be on the safe side.   Finally, ensure that the CBD products in your c-store follow the legal labelling regulations.  This means that they cannot include medical claims, or you risk penalties.

C-Stores Leading in the Introduction of CBD Products into C-Stores

After the Bill in 2018, a number of large brand-name retailers began carrying CBD products in topical forms.  This initially included brands like CVS Health, Rite Aid, Walgreens, and a few others.  

But, from 2019, the US Harvest Health and recreation (a multistate CBD dispensary operator) signed an agreement with the AATAC (Asian American Trade Associations Council). This allowed Harvest-branded CBD products to enter more than 10,000 c-stores and gas stations.  

This deal made Harvest Health one of the leaders in expanding cannabis distribution to c-stores.  The agreement later included independent c-stores and gas stations with over 50,000 members and almost 90,000 locations across the US. Big names included Shell, BP, and Chevron.  This deal helped to widen the availability of CBD in c-stores across the US.

Summary

Whilst CBD products in c-stores still face some regulatory challenges, convenience shops have been given an opportunity for innovation here.  Although the COVID-19 pandemic did negatively affect some cannabis markets including those of Nevada and Oregon, CBD is only set to grow in popularity.  

So, by stocking these products, c-stores are setting themselves up for potentially enormous profits.  Despite the stigma, CBD will inevitably generate money for the economy and could help to drive new cannabis laws in the future.

Areas for industry innovation in c-stores include automated CBD dispensary machines and vapes which will no doubt draw millennial and Gen Z customers into making purchases.  These will surely help to make CBD even trendier.  It will be very interesting to see how this market unfolds in the near future!