The CBD Association is working hard for you both in the U.S. and internationally. Here are some recent developments:
Cannabis Industry Inflection Point – Branding and Marketing Cannabis in a COVID-19 World
According to the Brightfield Group, who surveyed Canadian cannabis consumers, one-third of surveyed consumers couldn’t name a cannabis brand they’d purchased – 50 percent had no idea how much cannabis they consumed in a standard session.
Last fall, the Consumer Brands Association conducted a survey on the US market regarding consumer knowledge of CBD – 4 in 10 consumers surveyed didn’t know the difference between marijuana and CBD.
The regulations in Canada have made brand-building extremely difficult for cannabis companies. The U.S. is proving to be even more of a regulatory nightmare. As COVID-19 drives consumers to shop online and away from retail establishments, branding and marketing will become even more vital to the cannabis industry.
The cannabis industry, in both the US and Canada, is going to have innovate quickly to an all-digital marketplace that attracts not just the already converted cannabis believer, but new-to-cannabis customers. Additionally, the cannabis industry has been slow to leverage strategic partnerships – great ways to exponentially grow brand reach and messaging. Without strategic partnerships, many cannabis companies will not be able to differentiate themselves in the marketplace.
Language from the SAFE Banking Act included in House COVID-19 Relief Bill 2.0
The massive economic stimulus bill, passed by the House on May 15, includes language from the SAFE Banking Act, which was previously approved by the House last September and is aimed at guaranteeing banking access for legal cannabis companies. The bill includes provisions aimed at making financial institutions more comfortable serving the now-legal hemp and hemp-derived CBD markets.
The Senate will be a harder sell. In the fall, the Republican-controlled Senate said that it had no intention of considering the bill, and the Sen. Majority Leader Mitch McConnell was especially opposed to the bill. To date, the White House also opposes the provisions from the Act included in the bill.
The Big Squeeze Created by a Lack of FDA Guidance – Green Growth Brands Closes CBD Business – Charlotte’s Web Reports Losses
Green Growth Brands Inc., which 15 months ago launched with aspirations of growing to a multibillion-dollar cannabis company, is liquidating the assets of its CBD business and its corporate office. Former CEO Peter Horvath left Green Growth within the last two months to join High Times. Some believe that the downfall of Green Growth is an example of a trend in the cannabis market – Green Growth spent most of its funds focusing on acquisitions and retail expansion across the U.S. Large-scale acquisition only works when the capital markets are open where there’s equity available to continuously fund new operations. Without federal guidance, the US market is limited to state-by-state legalization.
Charlotte’s Web (OTCQX:CWBHF) is the closest thing CBD has to a name brand. They are the largest brand of CBD products in the United States and their products are on store shelves in more than 11,000 stores. Charlotte’s Web reported a significant loss for Q1. Charlotte’s Web Holdings is pointing to market saturation, legal uncertainty, and rising expenses as it reported a loss of $11.5 million last quarter. However, shares have dropped over the past year, falling more than 80% from their peak last summer. This decline is likely caused by continued FDA delays in issuing regulations and by overcrowding in the cannabis market.
As the market continues to look like a patchwork quilt across the US, and more cannabis companies join the US market, the industry will be squeezed into small, saturated pockets resulting in greater losses throughout the industry.
National Recall of CBD Product Due to High Lead Content – the Company States it Tested Within Acceptable Limits
Summit Labs has issued a recall of a tincture that was distributed nationwide in the US. While conducting a random sampling, the Florida Department of Agriculture found that the tincture contained an unacceptably high-level of lead. The voluntary recall from Summit Labs is for its Kore Organic CBD oil, specifically a batch of watermelon-flavored tinctures from which a sample tested with 4.7ppm of lead. The high lead sample came from the recalled Batch #730 Lot#K018, which contained 30ml bottles of 15mg 450x products sold to consumers. Summit Labs reports that it tested a sample from the same batch and found that the lead levels were within the legal limits. The entire batch has been recalled based on the sample that tested with high levels.
The FDA states that the consumption of this product could lead to high lead exposure.
Online Event – New Hemp Hosts the Hemp Collective Virtual Summit, Wednesday, May 20th.
