The impact of COVID-19 is influencing the hemp industry—from changing the way consumers shop, to increasing interest in mood-boosting products. After a year of spending the majority of their time at home, consumers have shifted their shopping habits, presenting a huge opportunity for direct-to-consumer (DTC) brands that sell their products online.
The stylish allure of these DTC brands is surely increasing interest in hemp CBD products. Coupled with product iteration and the hope of forthcoming governmental regulations in the space, 2021 could be a huge year for hemp CBD. On the flipside, the CBD segment has become saturated with products, and forward-looking brands are pushing the hemp category into the future with launches that explore lesser-known cannabinoids, combine hemp with other mood-boosting ingredients, or increase the dosage levels of CBD to new heights.
Drawn from Saage Insights’ in-house intelligence, these are the top trends the firm predicts will influence the hemp segment in the upcoming year.
Beyond CBD and THC
Once an interest in the neurohacking niche, brain enhancement and mood boosting through supplements and food is beginning to go mainstream. With consumers embracing the idea that food can boost mood, opportunity exists for the cannabis industry to expand and diversify by exploring the potential benefits specific cannabinoids offer. Some that are beginning to make waves are cannabinol (CBN), cannabigerol (CBG) and cannabichromene (CBC).
Producers are also launching products that combine cannabinoids with other trendy wellness ingredients, most notably adaptogenic botanicals offering anti-stress and balancing properties, and nootropic supplements, known to aid brain function.
Aimed at wellness-minded consumers, these products are marketed with specific functionalities, such as sleep inducing or cognitive boosting. Combining a cannabinoid such as CBN with melatonin, a more established ingredient in the supplement space, may create a more functional product, while also drawing new consumers to the cannabis space.
One example of these new hybrid wellness products comes from Prismatic Plants, which utilizes CBDa (cannabidiolic acid), CBN and adaptogens—ashwagandha (Withania somnifera), rhodiola (Rhodiola rosea), reishi mushroom (Ganoderma lingzhi) and white Asian ginseng (Panax ginseng)—along with edible essential oils such as rosemary (Salvia rosmarinus), lemon (Citrus limon) and lavender (Lavandula), to create tinctures aimed at supporting mind and mood.
Another brand exploring the space is Caps by Cookies, whose supplements combine CBD, CBG, a blend of adaptogenic mushrooms and hemp terpenes in separate formulas targeting mental focus and energy, and rejuvenation and restful sleep, according to the company. Traditionally a THC and strain-specific company, Cookies’ expansion into lesser-known cannabinoids and mushrooms is an indication of the evolution of product development within the cannabis segment.
The DTC sector has exploded in recent years, driven by the ease of connection and engagement that social media (namely Instagram and TikTok) offers, coupled with the rise of online shopping. From razors to bedding to hemp-derived products of every type, DTC brands are thriving. According to Diffusion's 2020 Direct-to-Consumer Purchase Intent Index, a quarter of all Americans make DTC purchases a regular part of their shopping.
Within the cannabis segment, DTC provides convenience, as well as discretion for products that continue to retain a stigma among some consumers. Some CBD brands such as Caliper, a dissolvable powder to add to any food or beverage, offer a convenience-oriented subscription model that incentivizes consumers with an ongoing discount should they opt in for the monthly delivery. The cadence of a monthly delivery seamlessly replenishes their supply and keeps wellness routines consistent.
Another example of a subscription DTC done right is Beam, which was founded by two former professional athletes. Offering a variety of products formulated to deliver benefits based on specific need states (e.g., Recovery, Balance, and Sleep), the brand sells starter packs to sample before committing to an ongoing subscription that rewards purchasers with a 20% discount on all products.
As DTC grows, Saage Insights predicts the model will become a launching pad for start-up hemp and cannabis brands who have the long-term vision of omnichannel distribution. An example of this is the CBD seltzer brand Recess, which began as a DTC product, but has since found traditional distribution.
Another brand available through many avenues is celebrity-friendly Beboe Therapies, a full-spectrum CBD skin care brand, which sells DTC online and through Instagram, as well as brick-and-mortar department stores like Nordstrom.
With DTC brands relying on social media to catch consumers’ attention, it's no wonder hemp-based supplements are investing in stylishly designed packs that aim to draw Millennial and Gen Z eyes. Once a category defined by clinical bottles or health store aesthetics, the supplement segment is now teeming with design-forward packaging fit for display in influencer photo shoots.
Promoted heavily on Instagram, Feals is a CBD supplement brand that combines hemp-derived CBD with medium-chain triglyceride (MCT) oil. Packaged in Millennial-friendly pastel peach bottles, the tinctures are presented in minimalist off-white tubes emblazoned with the brand’s lowercase font logo.
Another brand focused on aesthetics is The Tonik. Packaged in a bottle reminiscent of an AirPods case, The Tonik Organic Hemp Seed Oil Capsules have been featured by style-centric brands such as Goop and Free People.
A major current trend within psychoactive ingredients such as THC or psilocybin is microdosing. However, when it comes to non-psychoactive cannabinoids such as CBD, CBN, CBG or CBC, any immediate effects can be subtle—typically not yielding noticeable change for consumers. As such, high-dose products are emerging within non-psychoactive cannabinoids.
When CBD products began trending a few years ago, the CBD content for a beverage might be 5 mg to 10 mg. Now, brands such as Sweet Reason and Cirrus are exploring higher-dosage products. Sweet Reason’s Evening Blend contains 30 mg of CBD, with Cirrus following suit.
It is important for brands to educate consumers regarding dosage and expectations for tangible effects. Newbies starting at super low dosages that yield no significant effects may abandon the segment altogether. While no one-size-fits-all solution exists for CBD usage, consumer expectations for tangible effects could lead formulators to continue pushing up CBD content in new launches—especially in products such as foods and beverages where the item is pre-dosed, versus an extract, tincture or supplement, which allow more consumer control.
FDA has set no tolerable upper intake level (UL) for CBD, and the agency has stated it needs more safety and dosage data on CBD before determining possible approved use in dietary supplements and foods. However, a World Health Organization (WHO) report on CBD noted research on CBD is limited, especially in humans, but its review of the available science showed studies ranging in dosage from 100 to 800 mg/day found low toxicity, no major drug interactions, few adverse effects in humans and no evidence of potential for dependence or abuse.
Hemp CBD bubble
As hemp-based CBD pops up in everything from facial wash to drinks, and celebrities like Martha Stewart and Kristen Bell jump on the train, 2021 is the year to reflect whether it's all gone too far. The shelves are seeing a glut of CBD products; and although some may stick around, others are just riding the fad.
This may be the year CBD has its reckoning. Hemp-based CBD needs more research to legitimize its potential functional benefits, as well as regulation to ensure consumer trust in products. The lack of clinical studies and regulation, coupled with the proliferation of products and claims, could alienate or confuse consumers.
Industry is hopeful federal regulation may soon provide some much-needed clarity to the CBD segment. As the Biden-Harris administration gets its footing, it is likely that hemp CBD regulations may begin to see movement. With the passing of the 2018 Farm Bill, hemp was removed from the Controlled Substances Act (CSA) and placed under the jurisdiction of FDA.
Since the bill’s passage, FDA’s regulatory framework has yet to take shape—prompting H.R. 841 (The Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021), congressional legislation calling for FDA to regulate CBD products as dietary supplements, therefore holding producers accountable for safe manufacturing, testing and labeling. This bill looks to not only protect consumers, but help stabilize the hemp market and provide consistency in product development.
As of now, with some consumers skeptical of the effectiveness of CBD products, brands may begin pivoting to “full-spectrum hemp extract” in lieu of “CBD” on labels. The main question for brands to ask themselves is: Are we creating something of real value with our CBD launch, or are we just throwing something against the wall to see if it sticks?
Brandi Moody is co-founder of Saage Insights, a qualitative research and trend forecasting agency dedicated to keeping brands relevant to their consumers. Working in consumer insights since 1998, she has advised many food and beverage companies, including Bacardi, Coca-Cola, SuperValu and Dannon. In addition, Moody served as a marketing manager at a California cannabis start-up, as well as consultant to a number of brands in the California wine industry.