As states and consumers across the country react to the ongoing coronavirus threat with lockdowns and closures, it’s possible that the cannabidiol (CBD) industry may actually see sales increase. Numerous consumer reports show that people use hemp-derived CBD to help cope with stress and anxiety, which is poised to grow during the global coronavirus pandemic.
One major takeaway: Manufacturers fear a dip in retail sales as states and cities issue shelter-in-place orders.
Denver-based Balanced Health Botanicals told Hemp Industry Daily that its already seeing a slowdown with the 5,000 independent retailers and Albertsons/Safeway stores carrying its products.
“Our independent retailers are suffering right now in a big way,” said Chase Terwilliger, the company’s CEO.
“Retail sales have definitely slowed,” agreed William Spilo, CEO of CBD Luxe. The Golden, Colo.-based CBD-maker reported a 30% decrease in retail sales in the second week of Mach, adding that “immediate effects have been felt through our wholesale purchasers” who have reduced orders significantly.
Telford, Pa.-based Elevate CBD actually saw its sales grow in March—potentially doubling the company’s February sales—but is bracing for a tough April, as retail accounts for 80% of its business.
“I think retailers from the brick-and-mortar side are taking things very cautiously,” said Cindy Blum, Elevate CBD’s vice president of marketing. “There are some conversations that have been delayed or deals that have been delayed as they think about what their next step is.”
Both Balanced Health Botanicals and CBD Luxe said while brick-and-mortar is suffering, online orders and web traffic have increased as consumers are spending more time at home.
“Viewer traffic has increased tremendously,” said Spilo of CBD Luxe. “I think people are kind of preparing for what’s to come—shopping for brands and making decisions for what their next order might be.”
“What we’ve seen is an increase in our e-commerce sales and a decrease in our retail sales,” added Terwilliger of Balanced Health Botanicals.
Marketing During Coronavirus
Many CBD companies are responding to the crisis with a shift in marketing and products to address physical, mental and spiritual well-bring.
Beam, a Boston-based CBD brand, is leaning into self-care during quarantine by offering live meditation and high-intensity interval training sessions on its Instagram page.
Others are responding to the crisis with new products: Both Westminster, Colo.-based Elixinol and Louisville, Colo.-based Quicksilver Scientific moved up the launch of products aimed at relieving stress and promoting a sense of calm.
“We changed our product release schedule to deal with this,” said Quicksilver CEO Christopher Shade. “We reprioritized what products should be moving to the forefront of R&D and released.”
There are also several CBD companies committed to giving back during this crisis. Austin, Texas-based CBD coffee company Crazy Calm is donating profits from its online orders to DirectRelief.org, which provides medical resources to healthcare professionals; CBD Smiles of Ringtown, Pa., is donating proceeds to the United Nation’s COVID-19 response fund; and Boston-based Beam is giving all medical professionals a 50% discount on online orders and donating 10% of its net sales to the Greater Boston Food Bank.
“As we navigate these challenging times, it’s very important to beam to maintain our ‘people first’ ethos,” Beam co-founder Kevin Moran told Forbes.
WANT BREAKING NEWS AT YOUR FINGERTIPS?
Get today’s need-to-know grocery industry intelligence. Sign up to receive texts from Winsight Grocery Business.