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CBD sales strong despite growing competition

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The Springfield area is getting curious about CBD.

Over the last few years, at least nine CBD specialty stores have entered the Springfield market, plus over 30 businesses that have added CBD items to their product lines.

CBD, or cannabidiol, is a compound found in the marijuana plant that does not cause psychoactive symptoms, or a high. CBD has been said to relieve aches and pains, as well as reduce inflammation and anxiety, though scientists have yet to back this claim.

For now, it’s an unregulated product, which has resulted in a boom of CBD stores across the country and a flood of untested products on the shelves. Without clearly defined regulations, there’s no way to know how much CBD is in products or if it’s being manufactured safely.

Most CBD stores in the area have opened shop in the last year and a half, and a majority of owners have said the competition hasn’t hurt sales, but rather increased product awareness.

“It’s literally every day that I see something new or a gas station selling CBD,” said Jamie Tillman, owner of CBD shop Canna Bliss LLC. “We were afraid that sales would drop, but they’ve continued to grow. The more competition comes, the more people hear about CBD, and the more curious they are.”

BDS Analytics and Arcview Market Research projects the U.S. CBD industry to exceed $20 billion by 2024. The firm estimated sales of $1.9 billion for 2018.

Growing demand
Local business owners say the heightened intrigue in CBD means they spend most of their days educating customers.

Rachel Lee, co-owner of Hemporium, said the hemp and CBD shop at 4139 S. National Ave. is consultation-focused.

“A lot of people are spending 30-45 minutes at our counter,” Lee said. “We’re constantly educating. That never stops.”

Hemporium, which opened in October 2018, carries over 400 products. Lee said the store’s sales have doubled since opening and May sales were up 48%. Declining to disclose revenues, she said CBD products represent 60% of the store’s sales.

Tillman, who opened her first Canna Bliss shop less than a year ago, didn’t know how the community was going to react to the products. She recalled anticipating protests when they first opened the doors at 210 W. Republic Road, but instead she’s found herself explaining her products to more people every day.

“Our products really stuck with customers,” she said of the opening in September 2018. “The new clients definitely come in shocked. We still have a lot of teaching opportunities.”

Canna Bliss has since added two stores, at 1937 S. Glenstone Ave. and in Lebanon. Canna Bliss has 60% return clientele, she said.

Franchises also have taken bait in the Springfield market.

Kathleen Wade and her husband, franchisees of Kansas City-based CBD American Shaman, saw potential locally when they decided to open a store in southwest Missouri.

They’ve also opened CBD American Shaman locations in Kansas, Joplin and St. Joseph, just a few of the franchise’s 300-plus shops nationwide.

“Springfield’s a good town. We’ve seen a steady incline of income and the number of people,” Wade said.

Wade cited a 25% monthly sales growth rate but was unable to disclose figures per company policy.

Aside from specialty stores, CBD products also are on the shelves of businesses, including Kaleidoscope, Cosmic Fish, SunRay Vapors, MaMa Jean’s Natural Foods Market and Crave Cookie Dough – which sells CBD-infused, edible cookie dough.

“CBD has been the most curious product we’ve ever stocked,” said Kelly Norman, general manager of MaMa Jean’s.

The natural food grocer began selling CBD products at the end of 2015. It now carries the brand Fountain of Health CBD, which Norman said generated $160,000 in store sales last year alone. Five months into 2019, sales already are close to last year.  

Other CBD products at MaMa Jean’s includes CBD-infused chocolate, soda, sparkling water, lozenges and gummies, and Norman expects mints to hit the shelves in a month.

Between 2017 and 2018, Norman said sales for traditional inflammation, stress and sleep products dropped 25-30%.

“We thought the CBD industry was going to take a hit on our other products, and at first it did. It ended up being an accompaniment for the people who have the means to add it to their regiments. Most people that have the budget to do both, do,” she said.

Boulder, Colorado-based Lucky’s Market also has sold CBD products since it entered Springfield in 2018.

At SunRay Vapors, owner Rob Sands said almost half of business is now in CBD, even though it isn’t a CBD-focused store. It’s not just college students who flock to the Campbell Avenue store downtown.

Sands said he sees 50- and 60-year-olds, individuals in their 90s, Springfield Cardinals baseball players, athletes from Missouri State and Evangel universities, and bands that pass through the area. The most popular product is a CBD vape.

“I think this is just the beginning,” Sands said. “I think CBD is one of the best things that’s come out in a long time.”

Despite surging sales for the dozens of businesses buying into the billion-dollar industry, business owners say there’s a stigma they need to combat in the historically conservative southwest Missouri.

Norman said Mama Jean’s has had four public education classes to highlight the difference between cannabidiol and marijuana.

“We are in Springfield, Missouri; we still have to get people to understand that there’s a complete difference,” Norman said.

Sacred Leaf of Springfield, formerly CBD Boutique, has been in Springfield a year after it was shut down in Buffalo for carrying products city officials thought were illegal. Store manager Corey Garoutte said he’s seen a greater demand in Springfield and many curious, yet wary, customers.

“They feel like they’re doing something so wrong because of the stigma against it. Then they feel relief, and they’re the biggest word-of-mouth we could have,” Garoutte said.

He said sales have plateaued at the West Kearney shop now that gas stations and vape stores are carrying the products.

“It’s not like it was a year ago,” he said. “We noticed that sales are big still, but it’s not the boom we were having. … The first week we opened, we were out of product. We had to go get a loan to get more money and more product.”  

Regulation
Congress passed the 2018 Farm Bill in December 2018, lifting the ban on production of hemp, or cannabis with less than 0.3% THC by weight. Without regulations, there isn’t much stopping people from selling CBD products of any kind.

“Anyone who wants to sell it can,” Wade said. “That’s why you’re seeing such a huge uptick in stores. People are trying to cash in on it.”

She said there’s a downside: “They don’t realize that in doing that, it hurts the public. There’s a lot of crap products out there.”

The Food and Drug Administration held a public hearing May 31 to hear concerns from consumers and sellers before deciding how to approach future CBD regulations.

Products sold with a claim of therapeutic benefit are subject to regulation, according to the FDA.

“We want consumers to be aware that there is only limited available information about CBD, including about its effects on the body,” said Amy Abernethy, principal deputy commissioner of the FDA, via Twitter.

Owners of CBD shops warn customers of misleading CBD products and encourage them to buy from reputable businesses.

“Our customers rely on us doing the legwork in finding brands and products they can trust,” said Norman of MaMa Jean’s. “We did extensive research with the companies we decided to partner with.”

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