Consumer demand for CBD (Cannabidiol) products is exploding. Seventeen states have legalized the use of CBD extract, and some experts predict that sales for CBD products could hit 17.27 billion dollars by 2022.

Not everyone is cheering those rosy sales predictions. Regulators in Washington are deeply concerned.  In November, the FDA issued a serious crackdown to 15 companies currently selling CBD-infused food and drink. To summarize: the FDA is stating it can’t conclude that CBD is “GRAS” (Generally Recognized As Safe) among its experts.

One of the main reasons is that 70% of US hemp is grown and imported from China, with little to no transparency when it comes to their growing practices. After extensive testing by a leading analytical chemistry laboratory, most products were found to be “highly contaminated” with heavy metals, herbicides, BPA and toxic mold. With the FDA keeping quiet until recently, most US CBD products are not yet regulated for purity and safety, and few companies have gone the extra step to be as transparent as they need to be. Many industry insiders are worried that with the rise of popularity and access, the possibility of a full-blown CBD health scare is coming. Such a scare would rattle consumer confidence, much like vaping.

So how do you prepare your business for what lies ahead in 2020?



CBD manufacturers and retailers must be ready with contingency plans to include transparency marketing policies. It has been shown that 73% of customers are willing to pay more for a product that offers absolute transparency across all layers and aspects of its production and marketing. Businesses that market cannabis and its derivatives can learn from brands like Patagonia that have been focusing on brand transparency for years. Patagonia allows customers to view all aspects of their product’s journey, including the (usually hidden) textile mills and sewing factories. This tactic has worked: CEO Rose Marcario estimated that the total revenue of the company had reached $1 billion in 2018.

Even though the CBD market in the US is relatively new, many companies expect a need for transparency from CBD consumers and have built it into their business plan. Veritas Farms, which owns a 140-acre hemp farm in Pueblo, Colorado, has taken steps to do just that. They boast sustainability as one of their core principles and provide consumers full transparency of their growing practices–even going so far to link to Colorado State’s Industrial Hemp Program website. The proof that full transparency is crucial in the market going forward is in the profit. Veritas Farms saw a 165% lift in their total revenue from Q3 of this year and a 347% lift from September 2018.

Being honest with your consumer isn’t just good for your business–it’s good for your overall reputation. Lay the foundation for being your customer’s trusted brand today. Not sure how to get started? Give us a call


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