As a result of price compression and the shift to lower price point products, overall growth in the CBD industry slowed in 2021, according to Brightfield Group’s quarter one CBD market industry update. Also, with continued delays in regulation from the FDA, retail expansion remained relatively modest, with concentrated growth seen in emerging channels like convenience and grocery.

Brightfield increased the total number of brands included in its calculations by 87 (over 50%) as compared to the first quarter. Looking at the second half of 2021, the top companies remain relatively unchanged compared to the first half with the big firms continuing to hold their ground as consolidation across the industry increased.

Gummies have been one of the biggest up-and-coming formats of 2021. Many companies entering this growing and competitive space differentiate products through an array of functional ingredients. The second half of 2021 saw consumer demographics shift slightly and continued to see greater usage frequency among existing CBD consumers.

Overview of CBD Competition

Though the top 20 companies grew their shares in the fourth quarter, this change was not significant enough to completely consolidate their share of the market. Techniques companies were utilizing in quarter four of 2021 and early 2022 to increase their overall shares include:

• Launching products that contain minor cannabinoids, such as CBDA and CBGA, to stand out from the crowd.
• Advertising that their products contain THC in order to capitalize on cannacurious consumers who live in states without regulated adult-use programs while remaining under the 0.3% legal limit permitted for hemp-derived product sales.
• Continuing to expand retail partnerships with independent storefronts.
• Preparing to increase their presence in states that recently passed their own legislation to regulate CBD, such as California.

Gummies

Many of the recent innovations in gummies have come from companies combining their CBD candies with functional ingredients to bolster efficacy and make use cases clear.

One recent example is Lazarus Naturals CBD Energy Gummies, which combined cannabidiol with caffeine sourced from green coffee beans, L-Theanine and Vitamin B12 to boost energy and focus. Another example is Healist Advanced Naturals Calm Chews, which included Ashwagandha and L-Theanine alongside CBD, and a portion of each purchase was donated to the National Alliance on Mental Illness.

Gummy CBD products are the fourth fastest growing product type over the forecast period despite starting from one of the largest overall bases of sales in 2021. They are expected to benefit significantly in the medium-term from a national regulatory framework for CBD, allowing them to be sold alongside mainstream vitamins and supplements.

Consumer Usage

Consumption of CBD among product purchasers increased steadily over the course of 2021, with more than 45% of those surveyed reporting daily use of CBD products in quarter four.

Throughout 2021, the increase in heavy usage was one of the largest drivers for the market overall since they purchase the largest overall value of products. Though capturing new consumers will be key to growth following increased CBD regulation, capitalizing on existing consumers with quality products is key to boosting revenue in the near-term.

Brightfield Group is a research firm for emerging categories including CBD, cannabis, and wellness. By integrating multi-source data with AI and research expertise into its cross-comparable data lake, it uncovers insights as new markets develop.