What can we expect to see this year?
2020 will undoubtedly go down in history as a year to be forgotten on most counts, but without dwelling on the past too much it was a relatively positive year for CBD, setting the scene for an explosive 2021. Regulations, mainstream adoption and big players entering the market will all play a part in the next 12 months in CBD and Hemp products more generally. I have collected some of my thoughts below for your amusement or enlightenment, depending on how you view them.
Regulation & Growth
Admittedly, this is less a prediction and more of a guarantee. The upcoming Novel Foods regulations look to be coming into force on the 31st of March, come what may. In light of both COVID and Brexit, there have been calls from the industry to extend the deadline for submissions of Novel Foods, but as of this publishing, the stance of the FSA remains unchanged. You can read more about our Novel Foods submission here.
Whilst businesses clamber to get their portfolios of evidence together for submission, what comes after Novel foods could be transformative for the industry. Frameworks of safety, testing and market legitimacy can pave the way for many of the largest businesses who have resisted CBD to enter the market. Platforms such as Amazon have tentatively tested the water with a pilot program, Ebay have effectively curtailed all CBD businesses and those that do slip the net are quickly shut down. When you look at the potential ramifications of a platform like Ebay or Amazon selling untested and unqualified items potentially containing THC or CBN in higher than allowed quantities, you can understand their reticence in dealing in this marketplace. At least until a clear pathway has been laid for them to assess the viability of both the business and product behind CBD and cannabinoid products.
As Novel Foods regulations come into force, these businesses will have a baseline to work from and can provide a much more concrete guarantee on the content and quality of the items being distributed via their platforms, giving them a layer of confidence in promoting and growing these markets.
Unique & Boutique Products
At Apex White Label we have seen a huge increase in demand for unique and creative applications for CBD blending with a myriad of more conventional ingredients to focus on specific areas of the market, we see this trend continuing for the foreseeable as brands look to distinguish themselves in a marketplace that has been accused of having many of the same types of product available from each brand.
CBD Product Production at Apex White Label
Sleep products, sports products & cognitive support products, all these areas are on the rise and the competitive landscape is pressing people to think outside the box to give their customers a product with more bang for buck than their rival brands can offer.
Other cannabinoids are also starting to feature heavily in peoples requests, looking at CBG and CBC within their ranges, whilst a lot of these products are prohibitively expensive, their supply availability is on the rise and naturally the asking price for such extractions is slowly dropping.
Mergers & Acquisitions
As some of the more substantial businesses and brands have developed, the marketplace for M&A transactions has perked up from the first flurry of deals in 2017/18 when everyone wanted a piece of a CBD business.
We see a year of mergers and acquisitions for CBD and Hemp brands from their direct competitors as well as behemoths entering the market and simply buying their way in rather than creating a brand from scratch. This should create a more competitive landscape as these brands combine efficiencies of scale with customer reach and go for increased market share.
Celebrity Endorsements
This trend began in the US where endorsements are much more commonplace, more recently we have seen the likes of Martha Stewart & Jay-Z getting actively involved with Cannabis and CBD businesses and the net benefits of having substantial figures on board when it comes to marketing and development are significant.
This hasn’t caught on nearly as well here in the UK but as the regulations clear the way for brands to showcase their legitimacy, the reigns will inevitably be slackened by the legal teams behind many high-profile celebs and figures when being approached by CBD businesses. We can see more conventional sports stars and household names embracing CBD businesses and using their considerable clout to bring CBD out to a much wider audience.
With all these factors and many more weighing in on this ever-evolving market, we see another big year for CBD in general, a more competitive and creative landscape developing with increased pace.
If you’re looking to understand more about how your business can grow with this market or how to expand your current CBD range, we take a consultative approach to working with SME’s and larger brands to understand their needs and desires for their customer base and work towards a solution that provides value on all fronts.
As ever, this is an opinion piece, it does not necessarily reflect the opinions of all of those within Apex White Label or its partners and affiliated brands.