CBD oil is sneaking its way into snacks, drinks, beauty products, even dog food. And understandably so—who wouldn't want to sleep soundly, reduce chronic pain, and feel more relaxed? However, there's one key complaint we hear time and again regarding CBD products: the price. CBD is a growing phenomenon, with sales tripling in the last three years. But manufacturers are forbidden to make medical claims on its effectiveness.
Why Is CBD So Expensive? Plus, How to Be Sure You’re Buying From a Safe Supplier
And if you’re wondering whether the price of CBD oil will drop, you’re in luck.
With more than a decade of experience writing and editing food and nutritional content, Betty Gold is the former senior digital food editor at Real Simple and acting senior food editor at Well+Good. Betty has also spent time working in product analysis at Good Housekeeping and in food production on The Martha Stewart Show. Highlights: * Bachelor of Science in Food Studies & Nutrition from New York University * Industry professional for 11 years * Served on mastheads at Food Network, Bon Appetit, and Good Housekeeping Magazines * Worked in publications department at James Beard Foundation
CBD oil is the most popular ingredient on the block this year. If this is news to you, let’s quickly clear up what it is: CBD is one of the many naturally occurring chemical compounds present in the flowers and leaves of cannabis plants, found in both marijuana and industrial hemp. Unlike THC (the psychoactive element of cannabis), CBD cannot get you high, no matter how much you take.
What’s drawing both consumers and product manufacturers to CBD oil are its highly promising purported health benefits, from reduced anxiety to help with nausea, inflammation, and insomnia. And though we still need more comprehensive research on the effectiveness of CBD oil, the World Health Organization has reported that “CBD exhibits no effects indicative of any abuse or dependence potential…there is no evidence of public health related problems associated with the use of pure CBD.”
Thanks to all of the above, CBD is sneaking its way into snacks, drinks, beauty products, even dog food. And understandably so—who wouldn’t want to sleep soundly, reduce chronic pain, and feel more relaxed? However, there’s one key complaint we hear time and again regarding CBD products: the price.
You’ll see a range of price points in the CBD market, of course, but many of them cost upwards of $50 to $100 for a small-sized vial (typically one fluid ounce) of CBD oil or a box of CBD gummy bears. In an effort to understand why—and to find out if and when this crazy cost might lower—we checked in with Brian J. Baum, the President & CEO of CBD giant CANNOVIA.
So, why is CBD so expensive?
According to Baum, there are several factors driving the price of CBD. The most significant is the limited supply vs. the overwhelming demand.
“On the supply side, the imbalance is due to the fact that hemp farming was generally illegal prior to the passage of the Farm Bill of 2018 (Agricultural Improvement Act of 2018), signed into law on December 20, 2018,” he says. Prior to that, hemp farming was only permitted in several states and mainly for research purposes. The Farm bill authorized the farming of “industrial hemp,” that is, hemp with less than 0.3 percent THC (the psychoactive element of cannabis).
Given the reality that hemp is a “crop,” we are just now in the first full growing season for new crops. “This first season is limited due to the lack of defined hemp farming guidelines issued by the USDA. Each state must then either implement the federal guidelines or develop their own plan for regulating hemp farming,” Baum explains.
On the demand side, consumers are increasingly looking for natural treatments for supporting health and wellness. A product that the National Library of Medicine reports was first used for therapeutic benefit in 400 AD, that has never been associated with overdose or death, certainly appeals to this consumer interest.
Will the price of CBD come down over time?
Good news: “The cost of CBD will absolutely drop over time,” says Baum. One of the main drivers for legalizing hemp farming was the potential for farmers to have a new cash crop to replace tobacco. As a result of hemp legalization, the transition to hemp is occurring in states across the country. “We will see the first full yield of a hemp crop in 2020 in states that have implemented farming regulations,” he says.
Another factor driving the cost of CBD is the extraction process. Currently, the extraction of CBD crude from hemp biomass is a bottleneck in the production cycle. There are a limited number of processors equipped to extract hemp biomass. The shortage of processors and the actual cost of extraction is keeping the cost of extraction high. The laws of supply and demand are quickly rebalancing this function as well. Many new extraction providers are coming in to the market, and innovations in the extraction process are already on the horizon which will drive down extraction costs.
“Within the next two to three years we should begin to see the CBD market supply and demand come into balance and result in lower priced CBD products,” Baum says.
How can we tell if we’re overpaying or underpaying for CBD?
There are many great CBD products on the market today. But according to Baum, there are also many products that are substandard for a variety of reasons:
1. Some products imply CBD content. Certain online retailers are notorious for misrepresenting products in the CBD market. Amazon, for instance, does not allow the sale of CBD products, but a search for CBD at Amazon will present numerous “hemp seed oil” products which have no CBD. When it comes to CBD, everyone should be cautious and do their research before buying online.
2. Some products contain quality CBD but their concentrations are so low that they offer no therapeutic benefit. “For example, a 30 milliliter (1 ounce) full-spectrum CBD tincture listed with 50 milligrams of CBD. An average dose of 0.75 milliliters would contain about 1.1 milligrams of CBD. At that level, consumers would not see any CBD benefits.”
3. Inferior CBD is an issue. Given the shortage of domestically produced CBD, much of the CBD in the US has been sourced from overseas markets, such as China. Hemp is a bio accumulator, meaning it absorbs everything in the soil in which it is planted. If the soil is not properly tested, soil contamination from prior crops is quite likely. This could include herbicides, pesticides and metals.
How can we assess the value of CBD products?
One of the best methods of evaluating the quality of a CBD product is the “Certificate of Analysis” (COA). Any reputable CBD source should readily supply the consumer with a certificate of analysis. The COA will provide test results of the actual of the CBD used in a given product. These lab results will provide the concentrations of CBD in the product.
What is CBD oil, and why is it so expensive?
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is a new and rapidly growing phenomenon, with sales tripling in the last three years.
- Manufacturers are unauthorized to make medical claims about the effectiveness of CBD oil.
- 62% of CBD products tested in the UK didn’t contain the cannabidiol content promised on the label.
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Following is a transcript of the video.
Narrator: Depending on who you ask, CBD oil can be a miracle cure, a snake-oil placebo, or something vague in between. This poorly regulated industry, which has boomed over the last three years, is a minefield for newcomers. Considering that manufacturers are unauthorized to make medical claims, how can one CBD oil cost $50, while another of the same volume costs $390? And are premium CBD oils justified for being so expensive?
Firstly, what is CBD?
Dani Gordon: CBD stands for cannabidiol. That’s the chemical name for one of the chemicals in the cannabis plant. The CBD oil that you’re seeing on shelves that consumers can buy without a prescription is actually from low-THC, the stuff that makes you high, varieties of the cannabis plant.
Narrator: CBD is a new and rapidly growing phenomenon, with sales tripling in the last three years. But the line between what consumers are using it for and what manufacturers can say to attract them is increasingly blurred.
Gordon: It can be used for a variety of purposes, things like inflammation, anxiety, stress, and it can also be used just to support general wellness. Now, the differentiating criteria between a medicine and a supplement is you cannot make a claim that it treats or cures a specific medically diagnosed disease. And that’s really important for companies to understand, because they can get their products pulled off the shelves, and they can also potentially sometimes unintentionally mislead consumers.
Narrator: But in the age of anxiety, it’s no surprise that CBD has become a hot ticket for manufacturers, who infuse all sorts of products with cannabidiol, shrewdly tapping into its perceived wellness benefits and bumping up the price of otherwise standard items, like gummies, sportswear, tampons, and even dog treats. But how do we assess the value of CBD oil, which is actually produced in two different ways?
Gordon: A full- or broad-spectrum product is made from the whole plant extract. They take the flower and they process it, and they come up with an extract that not only has CBD, but it has other plant chemicals, other cannabinoids, other terpenoids, other things in the plant that work together in this, what’s called this herbal synergy, this entourage effect. And what you get is greater than the sum of its parts.
Narrator: But some manufacturers process the extract even further into CBD isolate, a substance devoid of all other plant chemicals and labeled as “pure CBD.” But this isolate, which often features in expensive products, is generally considered to be less effective and cheaper to make.
Gordon: Some brands and some companies will put CBD isolate into a product and then brand it as a premium product, even though the cost of actually making it, because the cost of the isolate, is quite a lot lower than the cost of a full- or broad-spectrum CBD.
Narrator: But because of lax regulations in the industry, this fundamental difference in CBD oils is often disguised by manufacturers. The front of this premium $300 bottle, for example, does not display that it is, in fact, made from isolate.
Gordon: Sometimes you have to dig into the nitty-gritty of the ingredients. And sometimes you even have to, you might have to call the company and see what they’ve actually used. But in general, the labeling criteria are becoming a little bit stricter, so more and more consumers will be able to know what is a CBD isolate product and what comes from a full- or broad-spectrum source.
Narrator: These products can also be measured by the amount of cannabidiol in each bottle.
Gordon: What you really need to look for is the number of milligrams in the entire bottle, and then the number of milligrams of CBD per dose. And that’s really gonna tell you the bang for buck.
Narrator: But even high-dosage, full-spectrum CBD doesn’t have the approval from the Food and Drug Administration. The FDA says it “recognizes the significant public interest in cannabis and cannabis-derived compounds, particularly CBD. However, there are many unanswered questions about the science, safety, and quality of products containing CBD.”
More worryingly, lab tests conducted by the Centre for Medicinal Cannabis found that 62% of CBD products tested in the UK didn’t contain the cannabidiol content promised on the label. One product actually contained no CBD whatsoever.
CBD is shrouded in mystery and confusion for the consumer. On the one hand, a 2018 cross-sectional study of CBD users found that almost 62% “reported using CBD to treat a medical condition,” stating that CBD has “broad therapeutic value. But on the other hand, manufacturers cannot use the research data to make medical claims, leaving spokespeople in the unenviable position of having to promote their products to a certain demographic while avoiding endorsing the public’s perception of CBD.
Brett Heaps: So, what we’re not allowed to do with our products is make any medicinal claims, ’cause they’re not medical products. All our products that we sell are wellness products to improve sleeps and moods. We see CBD as a homeostasis product, which balances the levels in your body to get you into a normal state and balanced mind.
Narrator: Thankfully, despite the misconceptions, no matter what you use it for, there is a way to get a snapshot of the quality of CBD oil.
Gordon: You wanna look for a certificate of analysis. That means that that is a third-party-tested lab report. They test their product to make sure that it’s not contaminated, make sure it doesn’t have accidental THC levels above the allowed limit. Make sure it doesn’t have heavy metals in it. Make sure there’s no microbials, so, bacteria or fungus that can grow in these plants. No herbicides, pesticides, things you don’t want in it.
Narrator: So, why is it so expensive? The cost of producing CBD oil isn’t particularly high in relation to other large-scale crops. But there appears to be a premium on all cannabidiol, as revealed in this comparison of full-spec CBD, which shows that its prices grow pretty uniformly, according to the price per milligram in each bottle. With any wellness product with a global hype, high demand means high prices. Statistics show that sales of CBD will likely reach $1.8 billion in the next two years. But without regulation, medical research, and clear consumer knowledge, the human value of CBD oil will, for now, remain a matter of opinion.