As retailers await regulatory direction on CBD, the product remains in demand with customers. Plus, with the legalization and use of cannabis rising in some states, retailers see an opportunity to stock new tobacco accessories.

Cannabidiol (CBD), despite an unclear regulatory framework, is being sought by many consumers given its range of perceived health benefits from pain relief to calming properties.

Recent forecasts by BDSA, a cannabis market research firm, indicated that the legal U.S. cannabis market is poised for remarkable growth. Sales are projected to reach nearly $46 billion by 2028, with a compound annual growth rate of nearly 10% from 2023 to 2028.

The growth is primarily driven by the expansion of adult-use markets across the country. Approximately 50% of the U.S. adult population now consumes cannabis in states where it is legal, according to BDSA Consumer Insights data.

On the regulatory front, Chair of House Oversight Representative Jamie Comer held a hearing with the Food and Drug Administration (FDA) commissioner on April 15, which covered a wide range of topics, including CBD and hemp.

During the hearing, the FDA commissioner repeatedly said they are waiting for direction from Congress on what to do regarding regulating CBD, according to Kerry Hinkle, membership coordinator for the U.S. Hemp Roundtable.

Diving Into CBD Trends

While the FDA continues to work on a regulatory framework for CBD, consumers are still buying and seeking CBD products.

For instance, the CBD beverage space is performing well at the moment as more consumers are looking into alternatives to alcohol.

“Several well-established brands like Medterra or Lord Jones have expanded their offerings to include CBD-infused beverages,” said Hinkle. “But there are also new brands growing in popularity like CANN, High Spirits Beverages, High Rise and more.”

Another growing trend is the inclusion of other natural extracts in CBD products.

“Kratom, mushroom extracts and Kava are among the growing number of natural alternatives that have been added to CBD products to increase functionality, effectiveness and profit margins,” said Hinkle.

Consumers also want various CBD products they can trust and rely on. Consumers are becoming more conscientious about their products and are demanding quality, transparency, and accurate dosage and labeling, noted Aaron Smith, co-founder and CEO of the National Cannabis Industry Association.

In terms of variety, not only are consumers looking for CBD-infused beverages, but they are also purchasing tinctures, topicals, pet treats and more.

“Each of these products tends to attract different customers,” said Hinkle. “Beverages might be an alternative for alcohol; tinctures might be used for general relaxation and topicals for pain.”

As CBD products continue to grow in popularity amongst consumers, an opportunity exists for c-store retailers to profit from the category.

“I see low-dose hemp-derived CBD products as an excellent product category for c-stores to enter. The same can be said for hemp-derived delta-8 and delta-9 products as alternatives to tobacco,” said Hinkle. “I think if c-stores can properly market, display and educate their customers on these products, they can be the go-to spot for these CBD products.”

Variety Drives Tobacco Accessories

As the cannabis market expands, it’s offering new opportunities for tobacco accessories as well. Retailers in states with legal cannabis sales can look to boost accessory sales by offering pipes, screens, rolling papers and more.

Tobacco accessories reached $510 million in dollar sales, up 9.3% for the 52 weeks ending April 21, per Circana.
However, some retailers see potential challenges ahead for the category in 2024.

Mike Gilligan, vice president of Gilligan’s Retail, which operates 12 convenience stores in Arizona and Montana, expects tobacco accessories to be flat or slightly decline for the rest of 2024.

“The trends in tobacco and non-tobacco/nicotine products have been going through a big change over the past few years,” said Gilligan. “The popularity of nicotine pouches and e-cigarette products have started to chip away at traditional tobacco sales, which in turn will hurt tobacco accessories.”

Lighter sales, for example, already appear to be feeling the pressure of shifting tobacco trends. Lighter unit sales dropped 5.4% while match unit sales declined 2.5% at convenience stores for the 52 weeks ending April 21, according to Circana.

But tobacco accessories, including lighters, still have a promising future, especially with consumers’ high demand for variety.

“Consumers want options,” said Gilligan. “The challenge is bringing in a variety to meet customer demands while working with the counter space available to showcase the accessories.”

Gilligan’s is keeping its options open when it comes to rearranging its tobacco accessories section.

“As the customers’ taste changes and the category evolves, we change with it. We are continually on the lookout for the best products and the newest trends,” Gilligan said. “It is a welcomed challenge and opportunity for us to stay ahead and have an offering that is current and products our customers desire.”

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