By Stacie Calabrese, Manager, 4A’s Research, scalabrese@4As.org.
CBD (Cannabidiol) is everywhere suddenly, available in everything from beverages to baked goods to beauty products. Our recent survey, What Do U.S. Consumers Think About CBD-infused Products, showed that 58% have heard of CBD and nearly a quarter have tried it. Despite the increasing awareness and use, about two-thirds had no knowledge of any specific CBD brand.
This is an exciting time for agencies to get in on the CBD boom but there is a lot to understand before getting started in this dynamic industry. It can be daunting to understand the industry, never mind figure out how to pitch and the regulations you must follow, when making contact with a CBD client.
CBD – What is it, Where Does it Come From, and What Does it Do?
With legal cannabis and CBD bursting on to the scene at the same time – and often discussed together – it’s easy to confuse the two. Are bar-goers trying to get drunk and high at the same time by adding CBD to cocktails? Is that hand lotion going to make you feel stoned? What’s in that vape pen your coworker keeps stepping out to smoke?
CBD is found in both the cannabis and hemp plants and has analgesic and anti-inflammatory properties. You’ve probably also heard about THC (delta-9-tetrahydrocannabinol), which has similar properties but also has intoxicating psychoactive effects (in plain English, it makes people feel high). While both plants contain CBD, THC is found in very low levels in hemp plants. Cannabis will make you feel high; hemp will not.
CBD, whether from hemp or cannabis, is used for a variety of health benefits, like providing pain relief, treatment of seizures and anxiety, and as a sleep-aid. There is also strong scientific evidence supporting CBD as a treatment for epilepsy. Even though more research into the health benefits of CBD needs to be conducted, the market has exploded with new products – over 300 brands are now offering CBD products. The most common formats for CBD products are tinctures (drops), edibles, sprays, balms and salves, and vape juice.
Who Are the Consumers and How Can We Align With Them?
CBD consumers fall into two categories: recreational and wellness/medical. The recreational group is going to want CBD products derived from cannabis because THC is the component that has the psychoactive effects. This group may gravitate towards messaging about mental as well as physical relaxation. The strictly wellness/medical group will want the hemp-based products because they aren’t looking for the psychoactive effects.
Making sure the products match the target customers is an important step. If the target is medical but the product is a line of cannabis-derived lollipops, there is likely a mismatch. Similarly, if the target is the recreational market and the products are derived from hemp, that’s all wrong for the market!
If your goal is to reach both segments, it’s worth considering a different approach for each group rather than lumping them all together.
Ready to Brand? Now What? And is This Stuff Legal Anyway?
Talk about CBD or cannabis in a room full of adults and there’s bound to be some giggling. Like it or not, a negative stigma still exists around these products, largely due to its connection with cannabis. In trying to overcome the Dazed and Confused stereotype, normalization is the key. The medical group in particular may appreciate branding that avoids anything about getting high or includes any of the cliché stoner images, like cannabis plants, tie dye or references to 420 (don’t do it!)
As for legalization, in December 2018, the Hemp Farming Act was passed and signed. Although this makes CBD legal, the FDA seriously regulates the products and is concerned about “deceptive marketing of unproven treatments”. Until things are settled on this front, it’s best to avoid marketing that makes any specific medical claims; focus instead on storytelling around personal experiences with the products. This avoids any legal pitfalls and creates a way for the brand to connect with customers on a personal level.
Yet another roadblock in advertising CBD products is that Facebook and Google aren’t options for advertising. Despite legalization, both companies have opted not to allow CBD companies to purchase ads. Using influencers to post about the brand on Facebook is possible, and it’s the perfect way to set up that personal relationship with consumers. Amazon does allow CBD products labeled as “hemp oil” or “hemp extract” and it’s easy enough to sell on the Amazon marketplace and give products a boost.
To be sure you’re not running afoul of any regulations, we recommend that you consult with an attorney. And don’t forget that cannabis marketing is subject to different rules on a state by state basis.
Shouldn’t We Wait Until the Market Stabilizes a Bit?
There’s a lot to consider but don’t forget that our recent consumer survey found a lack of brand awareness for CBD brands. This is the perfect time to start early, build brand loyalty, and cut through the clutter. When talking to a prospect or client, consider these questions to help understand their motives and get the conversation going in the right direction:
- Is the CBD hemp or cannabis derived?
- Is the target the recreational or the medicinal consumer?
- Are any specific claims being made? If they are, what’s the basis? What studies are being used to support the claims?