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Why are CBD products so popular among ecommerce businesses?


In our last blog post we showed you 5 niches which are perfect for white label online sellers. You might remember that one of them was CBD Products and you were probably surprised, because not so far ago marijuana and anything associated with it was still a big taboo in the western society. That leaves us with the question: why exactly are CBD products so attractive for ecommerce businesses?

selective focus photography of person holding drop bottle

History of CBD supplements goes as far as 1940 when a chemist called Roger Adams extracted CBD from Cannabis sativa plant without realising the significance of his discovery. It took some time for Adams to figure out what he came across and research the benefits of the chemical compound. The first breakthrough happened in 1946 when Raphael Mechoulam identified the chemical structure of CBD and hence became recognised as the person who discovered the active ingredient in medical marijuana.

In the next decades the research progressed further, the first cannabidiol oil was released in Britain  and in 1980  Dr. Mechoulam conducted a study that revealed that CBD might be the key in fighting epilepsy. Since then it has been observed that cannabidiol can aid with other health issues such as Tourette’s syndrome, anxiety, depression and migraines.

The laws regarding CBD and marijuana as a whole have been evolving across Europe for the last few decades. Although the possession of the funny cigarettes is still classified as a drug offence in most countries, the CBD extracts are legal almost everywhere across the continent except Slovakia. There’s one ‘but’, the products need to conteing less than a certain amount of THC (another active substance in marijuana) - usually less than 0.2% or in some countries like Italy 0.6%.

bottle surrounded green leaves

So we established that selling CBD isn’t some shady activity for the outlaws and we know how it came to be, so now let’s have a look at what makes this niche so compelling to ecommerce sellers. The global CBD market was valued at USD 4.6 billion in 2018 and then it just died, turned to ashes and no one’s ever heard of it again.

Just kidding.

It is estimated that the industry is worth up to 7 billion in 2020 and is expected to grow at a compound annual growth rate of 22.2% to 2025. The sheer size of the market and the rate at which it expands makes it very attractive to online retailers, especially after some brick-and-mortar shops already proved that the product is lucrative.

Healthspan is one of the pioneering companies selling CBD products to physical retailers, with big names such as Boots selling their products in 400 stores around the UK. But the success of this niche in physical stores is a global phenomenon. For instance CVS Pharmacy in the US announced in 2019 that they will stock CBD topical products in 800 stores across the United States. Many other retailers see a promise in this market and e-retailers are not any different. 

Since the CBD products’ rise is proven by the numbers and by practical experience of other companies, many ecommerce entrepreneurs are turning their eyes towards that market. So what are the options for people who want to get into the CBD market and don’t have a spare cannabidiol oil factory lying around?

green cannabis leaves and black glass drops bottle

 

The only two realistic options if you wanna start a CBD business online is white and private label. Fortunately CBD manufacturers are usually more than happy to collaborate with entrepreneurs on both types of projects. It is estimated that over 90% of European CBD brands on the market today are produced under white label service. White labeling your products takes away all the worries of manufacturing or even private labeling and allows you to focus on your marketing and branding strategy, hence it is not a surprise that such a large amount of CBD e-commerce businesses opt for this option.

It doesn't require a large upfront investment and you can start your brand even if you are a one-man band hoping to make it big. Utilising fulfillment centres also allows you to set the business up without a warehouse or physical store and sell to people in countries you haven’t even been to. However, if you’re new to the topic it might still be confusing and quite daunting to start a CBD ecommerce store, so where should you go for more information?

There is o better place to be if you’re interested in ecommerce, white and private labeling than White Label Expo. The next edition of the best show in the industry will be taking place on the 6th & 7th of May 2020 at Messe Frankfurt and will provide you with all the knowledge that you need to start your own online business or diversify your portfolio of businesses, if you’re a seasoned ecommerce veteran. You will also take advantage of the hottest white label, private label products and countless networking opportunities so make sure you have your tickets secured now!