Some CBD companies have shown a slowing in revenues over the first quarter of 2020 compared to the same quarter last year because of the coronavirus pandemic. This comes at the same time that many Americans are turning to CBD to help them deal with the stress and anxiety over job loss, fears of catching the virus, being isolated from loved ones, and all the other stresses that the pandemic has triggered.
Despite the demand for CBD, some companies in the CBD industry have experienced tight margins as a result of the health crisis, with the brick-and-mortar seeing the biggest impact.
Slowed Regulatory Approvals
Meanwhile, the virus has also slowed regulatory approvals. CBD companies have been waiting for the FDA to establish a regulatory framework regarding CBD, but the wait continues. And as the COVID-19 pandemic drags on, such regulations are being pushed out even further as the federal government deals with more pressing pandemic issues.
Right now, there are no FDA-approved drug products with CBD aside from Epidiolex, a purified form of CBD to treat seizures associated with rare diseases. And the issue regarding the marketing of food products containing CBD has yet to be ironed out. Companies that produce and sell CBD products continue to wait for legislation to be passed that will encourage responsible production of CBD products while ensuring the safety of the public consuming them.
Delays in Planting Among Hemp Farmers
Some hemp farmers are delaying their seed purchases and spring planting amidst economic uncertainty and a lack of a comprehensive regulatory environment. Shipping delays and physical distancing requirements have also impacted hemp harvest and processing schedules.
Online Sales Increase
Despite slumped sales for brick-and-mortar CBD storefronts, online sales of CBD products have spiked. The coronavirus pandemic has caused a shift in consumer shopping behavior to online purchasing among retailers, including those selling CBD products.
According to consumer research firm Brightfield Group, approximately one-third of CBD consumers say they will start buying their CBD online rather than in-store during the pandemic, and about 47% are planning to stock up. That means online sales of CBD will likely be healthy through the health crisis.
The coronavirus pandemic has certainly posed major challenges for the CBD industry. But thanks to ecommerce solutions, CBD retailers can continue to remain afloat while serving the demands of consumers.