Recent reports from the CBD markets have been grim. But Martin Sumichrast, CEO of cbdMD, said his company’s experience leads him to conclude that the future is still bright for CBD firms that are properly capitalized and have good quality controls in place.
While some companies were badly hit by the retail shutdowns that accompanied the early and middle parts of the pandemic in the US, cbdMD was positioned to benefit, he said.
“We went right through the pandemic where things changed for a lot of companies,” he said. “Our strong suit is our direct-to-consumer capability, and that strategy has sustained us.”
“We were at about 55% online sales. Then the pandemic happened and—boom—the online sales share went through the roof. Now our ecommerce platform brings in more than 70% of total sales. We expect that number to skew back to about 60-40, and maybe even to return where it was,” he said.
Market contracted significantly in 2020
Predictions about the overall CBD market have not been rosy. In March, attendees at the NoCo Hemp Expo in Colorado were told that demand for the raw material was shrinking and prices were collapsing.
“We are asking people to please not plant hemp for cannabinoids this year unless you have already sold your crop,” supply expert Julie Lerner, founder and CEO of PanXchange, told the audience.
That glum view was corroborated with information disseminated at a virtual session of Informa’s Natural Products Expo West last month.
As reported in NutraIngredients-USA yesterday, attendees of the virtual event were told that sales of CBD finished goods had fallen by 6% in 2020, at a time when sales of dietary supplements overall jumped by 14%.