Why Is CBD So Expensive? The Real Reasons

The unrelenting waves of the wellness revolution have brought CBD to the forefront of public consciousness. It’s a prevalent name in health and beauty aisles, pet care products, and even in some foods. One common question many have when purchasing these offerings is: why is CBD so expensive?

CBD is pricey due to costly hemp farming, high-tech extraction methods, rigorous safety testing, and strict regulatory compliance. These ensure product quality and safety, but drive up the price.

Looking at broader economic dynamics, the law of supply and demand dictates that when a product is popular (like CBD currently is), producers can charge more owing to its high-market desirability. The Congressional Research Service reported substantial industry growth since the 2018 Farm Bill legalized industrial hemp production. CBD product sales in dispensaries soared, prompting businesses to scale up production to maintain an adequate supply.

But it’s more than just market popularity at play here. Unveiling the price tag on any CBD product reveals layers of complexity folded into each dollar spent – aspects specific to the nuances and challenges faced within the growing fields and beyond. Not all costs associated with CBD are visible on the surface; they are embedded in time-consuming farming practices, labor-intensive extraction methods, scrupulous testing for safety, regulatory considerations, financial constraints, and efforts to ensure customer satisfaction.

Admittedly, it might seem a little overwhelming when broken down like this. But understanding each element can provide valuable insight into how much you’re paying for your favorite CBD oil or gummies – and why you’re paying it. This guide will unpack these factors one by one in approachable but precise bites. So, let’s dive in and solve this complex cost puzzle together!

What are the farming challenges associated with CBD production?

CBD production begins in the field, and hemp farming presents several significant challenges that contribute to the final cost of CBD products.

Firstly, one must understand that hemp farming is labor-intensive. Unlike corn or wheat, which are largely harvested mechanically, hemp requires a more hands-on approach. This manual work includes planting, tending, and harvesting. After harvest, the plants need to be manually hung and dried, another process requiring a good deal of time and effort.

This post-harvest drying process is crucial as it prevents mold growth—a persistent threat that can ruin an entire crop. Drying must be done with care to retain as many cannabinoids as possible in the plant material—particularly important for high-CBD varieties.

Moreover, despite some regulations becoming more lenient after the passing of the 2018 Farm Bill, each state has its own set of rules regarding what can be grown under said legislation. Farmers must adhere to these intricate rules and prove their crops contain less than 0.3% THC (the psychoactive compound found in cannabis), which often necessitates costly inspections and assessments.

Further contributing to cultivation costs is the issue of genetic variability in hemp plants. Inconsistent CBD levels in different plants force farmers to grow more hemp to ensure they meet their CBD yield targets. Some plants may thrive while others produce less CBD than expected, making this unpredictability another factor driving up costs.

Thus, all these factors combined—the labor involved, careful drying procedures required to maintain crop quality, the rules farmers have to follow per state law following the 2018 Farm Bill’s enactment, along with the intrinsic genetic variability in hemp strains—contribute significantly to why the end product, CBD oil or other CBD derivatives, are priced higher than you might expect.

How does the extraction method affect the price of CBD?

Decoding the world of CBD pricing is a multi-faceted task. One critical aspect influencing both product quality and cost is the cannabinoid extraction method employed. The two primary ways to extract CBD from hemp are supercritical CO2 and ethanol extraction.

Documentary-style 2:1 aspect ratio image with rich contrasts and slightly desaturated tones. The montage is segmented into three phases by subtle vertical lines. On the left, a farmer in workwear proudly displays a handful of hemp against a field backdrop. Centered, a gleaming state-of-the-art extraction machine processes the hemp. On the right, two diverse hands engage in a handshake against the backdrop of a CBD storefront, epitomizing market competition and inclusivity.

Supercritical CO2 extraction employs carbon dioxide under extremely high pressure and low temperature, turning it into a state—an amalgamation of liquid and gas—capable of stripping valuable cannabinoids from hemp. The efficiency and selectivity of this technique contribute to its accolade as the gold standard for CBD, in sync with its ability to maintain purity while eliminating harmful residues.

Nevertheless, it’s worth noting that this gold standard isn’t cheap. It requires specialized equipment, sizable amounts of energy, and technical expertise—each contributing to higher production costs that inevitably trickle down to the consumer.

On the contrary, ethanol extraction is less costly but involves soaking the plant material in ethanol, converting cannabinoids and other components into a soluble form. While economical in terms of initial investment and operating costs, ethanol extraction may pull out unwanted compounds like chlorophyll that can give end products an unfavorable taste.

Beyond just extraction lies another decision point: selecting between full spectrum extracts or CBD isolates.

A full-spectrum hemp extract includes all naturally occurring cannabinoids, terpenes, minerals, and flavonoids found within hemp. Several users rally behind full spectrum extracts due to their ability to endlessly interact within our bodies—a phenomenon known as the “entourage effect”—enhancing effectiveness manifold compared to individual components working solo.

The catch? Successfully preserving this rich spectrum of elements in CBD oil requires greater sophistication in extraction methods—therefore increasing its cost.

Alternatively, a CBD isolate strips away all other constituents of hemp except for cannabidiol—the purest form of CBD. Think of it as a double-edged sword. On one side, the isolate can deliver high potency and consistency, making calculations for doses straightforward. However, it comes without the perks of the “entourage effect” craved for by many CBD enthusiasts.

The benefit? These isolates are typically less expensive and bear milder flavors than their full spectrum counterparts—primely suited for those testing the waters of CBD consumption or needing high dosage without breaking the bank.

In summary, extraction methods shape both the quality and price tag of a CBD product. From CO2’s precision and purity to ethanol’s efficiency and cost effectiveness, each technique brings its unique value to the table. Furthermore, consumers enjoy choices between a more holistic yet expensive treatment with full spectrum hemp extract to an affordable, refined experience with CBD isolate—all depending on personal needs and financial feasibility.

What role does testing play in determining the cost of CBD products?

Proper testing of CBD products plays a pivotal role in not just ensuring safety and effectiveness—but also contributing to the final retail price. The importance of adhering to Good Manufacturing Practices (GMP) often comes into the limelight when discussing product safety.

A 2:1 aspect ratio vintage-style infographic illustrating the progression from hemp cultivation to CBD products on the shelf. The top captures a thriving hemp field in rich green, leading downward to a processing facility with muted industrial tones. The image wraps up at the bottom with a rustic wooden store shelf, where neatly organized CBD products in eco-conscious packaging are displayed. The visual journey is presented without the inclusion of any text.

Essentially, the acronym GMP represents a range of guidelines that ensure the integrity, quality, and safety of the final product: measures that involve multiple levels of production processes, from the handling of raw materials to systematic testing at every stage.

At a glance, this might seem like an unnecessary expense, but it’s paramount in removing inconsistencies and potential risk factors during manufacturing. Lackadaisical practices or questionable conditions introduce variability into the batches, undermining both their quality and dependability.

Another vital aspect of the pricing puzzle is the Certificate of Analysis (CoA). CoAs serve as assurance to consumers that what they’re consuming is exactly as advertised. Obtained from labs independent from the producer, these certificates verify things such as cannabinoid content, confirming whether illegal compounds like THC are below permitted levels while verifying the presence of promised elements like CBD.

Besides essential verification logistics, there’s another crucial factor behind rigorous testing – hemp’s nature as a bioaccumulator. Simply put, it’s unusually good at sucking up whatever is there in its growth environment—be it beneficial minerals or harmful contaminants like heavy metals and pesticides.

Since toxins absorbed by hemp plants inevitably make their way into CBD products, strict testing must follow. This assures consumers that they are indeed getting a safe product free from contaminants – elevating trust between brand and consumer alike.

This level of transparency doesn’t come without a cost. But considering you’re investing in your health by taking CBD, the extra effort for quality control should be welcomed—a safe assurance outweighing any additional expenses on your price tag. Moreover, comprehensive third-party lab results offer an unbiased validation, exemplifying a brand’s commitment to its customers.

How does regulation affect pricing within the CBD industry?

Regulations play a significant role in shaping the costs of CBD products, affecting every stage, from cultivation to the final product sale. A key factor contributing to this is the monitoring of tetrahydrocannabinol (THC) levels.

THC, another compound found in the cannabis plant, has psychoactive properties and is subjected to strict control by authorities. Legally, industrial hemp plants (from which CBD is primarily extracted) must contain less than 0.3% THC. Maintaining this legal THC threshold requires continuous testing and oversight, adding to production costs. This is amplified if crops surpass this limit and need to be destroyed, leading to significant financial losses for farmers.

Additionally, every company operating within the CBD industry must bear licensing fees. These involve acquiring permits at different stages of production, from cultivation and extraction to packaging and selling. Licensing comes with not only upfront costs but also annual renewal fees and additional expenses to maintain compliance.

Furthermore, these regulatory standards aren’t static. As lawmakers gain a better understanding of CBD and its effects, they continually revise existing rules or introduce new ones. Each regulatory change implies potential operational adaptations for companies that might accrue further costs.

The regulatory landscape offers both challenges and benefits. While it can increase production costs significantly, it also ensures a certain standard across all CBD products available on the market. Consumers can trust that they are getting a product that meets safety standards – even if that means slightly higher pricing.

Remember: regulatory responsibilities are just one slice of the expense pie in CBD’s journey from seed to sale. The bigger picture includes multiple intertwining factors contributing to why CBD products are so pricey today.

What financial burdens exist in marketing and selling CBD products?

Positioning a product in the market, especially in crowded digital platforms, is integral for every business. However, the CBD industry faces significant barriers to standard marketing practices.

Social media platforms and Amazon enact strict regulations against CBD advertising due to its association with cannabis. Even though the Farm Bill of 2018 legalized hemp-derived products containing less than 0.3% THC, individual platform policies remain rigid. This restricts companies from reaching a wide range of potential consumers, forcing them to find alternative, often costly, methods of marketing.

Marketing isn’t the only area where financial burdens lurk; financial services also come with considerable challenges. Financial service providers, including banks and payment processors, are hesitant to engage in transactions with the CBD industry. Despite strides towards normalization, many institutions perceive the industry as high-risk due to regulatory uncertainties and the stigma associated with cannabis.

This hesitance results in limited access to banking services for CBD sellers – if not outright refusal. It’s no surprise that some providers willing to take on these accounts often charge substantial fees for their services.

On eCommerce platforms like Amazon, similar restrictions apply. Despite offering hemp seed oil and other closely related products, Amazon’s policy prohibits sales of CBD products on its platform, resulting in limited visibility for CBD retailers.

In sum, selling CBD isn’t just about producing a quality product; it’s also about navigating through a virtual maze of marketing restrictions and financial complications.
Ultimately, these factors contribute significantly toward escalating costs, acting as critical components underpinning why CBD is so expensive.

How can consumers ensure they’re buying safe and effective CBD products?

Navigating the world of CBD products can be a daunting challenge, given the numerous options available in today’s market. However, equipping oneself with the right knowledge is key to ensuring that you buy safe and effective products. Two crucial elements to consider are third-party lab reports and a brand’s reputation.

2:1 aspect ratio minimalistic image displaying a scale in perfect balance. The left pan holds vibrant hemp leaves, indicating supply, while the right pan bears gleaming gold dollar signs, representing demand. The color palette is dominated by soft greens and golds. In the background, a faded graph steadily rises, hinting at the growing demand for CBD. The entire composition subtly communicates the equilibrium between supply and demand in the CBD sector.

Third-party lab reports are a testament to a product’s authenticity and safety. Reliable brands always submit their CBD products to professional testing entities separate from their own operations. The resulting report reveals essential data about cannabinoid content, purity, and the presence or absence of any contaminants like pesticides or heavy metals.

Purchasing from a reputable brand is another indispensable measure when seeking quality CBD products. A strong online reputation is often indicative of consistent product quality and customer service excellence. Online review platforms offer a transparent overview of customer experiences with a brand’s product line and customer service.

Meanwhile, the conversation around CBD safety isn’t complete without addressing potential interactions. Awareness of interactions between CBD and other substances, particularly prescription medication, is critical. Given that CBD may interact with certain enzymes involved in metabolizing drugs within the liver, it is recommended to consult healthcare professionals for advice on potential interactions before using CBD if you are on other medications.

The burden rests with consumers to educate themselves about these factors – reputable brands will provide all the necessary information openly for their customers. Quality control is fundamental in determining the cost of CBD products, but it’s also an investment in your well-being as a consumer.

Navigating through questions like “Why is CBD so expensive,” understanding what goes into third-party testing, or knowing about potential interactions all help create an informed consumer who knows how to find value in safe CBD products.

How can consumers find value for money when buying CBD products?

As a savvy CBD consumer, one thing you can do to ensure you’re getting your money’s worth is to lean on the principle of per-milligram pricing. A per-milligram basis calculation allows you to compare prices of varied-sized products transparently. It uncovers the actual cost per milligram of CBD in a bottle or jar, helping even out apparent distortions from quantity differences.

Fortunately, there are accessible initiatives tailored toward making CBD affordability no longer an elusive goal. Programs like military and disability discounts offer savings that matter. They serve to honor our veterans and persons with disabilities by providing them with more economical access to CBD, sustaining those who might need these products the most without compromising their financial stability.

Another fruitful measure to find salmon leaps of savings is signing up for an AutoShip & Save program offered by many brands. This system ensures that your favorite CBD products reach your doorstep conveniently and regularly while simultaneously offering discounts for every shipment. In effect, this arrangement provides a double benefit of comfort and economization.

Moreover, some companies offer CBD product bundles. This bundled approach combines various products into one package at a reduced price, often featuring free shipping as an extra perk. Bundles can be particularly beneficial if you’re looking to experiment with different types of CBD products or want an all-in-one solution while managing costs.

Finding value in the CBD marketplace is not as daunting as it might appear initially. With strategic shopping practices and availing industry-specific discount programs, you can ensure that investing in CBD doesn’t have to translate into a blow to your bank balance but rather an activity aligning budget limitations with wellness aspirations.

References

  1. World Health Organization. (2018). Cannabidiol (CBD) Critical Review Report. Retrieved from WHO
  2. Leafreport. (2021). CBD Prices: Are You Overpaying for CBD? Retrieved from Leafreport
  3. U.S. Department of Agriculture (USDA) Agricultural Marketing Service. (2021). Hemp Production. Retrieved from USDA
  4. Coelho, S. (2020). CBD isolate vs. full-spectrum CBD: Differences and benefits. Medical News Today. Retrieved from Medical News Today
  5. U.S. Department of Agriculture (USDA). (2012). Organic 101: What the USDA Organic Label Means. Retrieved from USDA
  6. ACS Laboratory. (2020). Hemp & CBD Market Value: January 2020 Price Trends for Crude, Flower Biomass, Isolate. Retrieved from ACS Laboratory
  7. Hemp Industry Daily. (2020). CBD prices are falling as companies seek new consumers. Is that a good thing? Retrieved from Hemp Industry Daily
  8. Cannabis Business Times. (2019). 5 Tips for Extracting CBD. Retrieved from Cannabis Business Times
  9. Bonn-Miller, M. O., Loflin, M. J. E., Thomas, B. F., Marcu, J. P., Hyke, T., & Vandrey, R. (2017). Labeling Accuracy of Cannabidiol Extracts Sold Online. JAMA Network, 318(17), 1708–1709. PubMed Central (PMC)
  10. Moreno, I. (Date Unknown). CBD prices are falling as companies seek new consumers. Is that a good thing? Hemp Industry Daily. Retrieved from Hemp Industry Daily
  11. Moreno, I. (Date Unknown). CBD prices are falling as companies seek new consumers. Is that a good thing? Hemp Industry Daily. Retrieved from Hemp Industry Daily
  12. FX Empire. (2020). CBD Prices Weighed Down by Rising Supply in 2020; Industry has Huge Growth Potential. Retrieved from FX Empire
Katie Devoe

Katie Devoe

Katie Devoe is an entrepreneur, educator, and cannabis thought leader. She has been a guest speaker at numerous conferences and developed the CannaCertified cannabis education platform.

• Cannabis and Hemp Enthusiast
• One of the first female business owners in the hemp and cannabis industry
• Co-founder of one of the largest and most established CBD manufacturers in the country
• Spent the past decade leading brands in the hemp and cannabis industry
• Developed a certification program
Connect with Katie on LinkedIn

Get a quote from Katie on your product idea today!

Katie Devoe

Katie Devoe

Katie Devoe is an entrepreneur, educator, and cannabis thought leader. She has been a guest speaker at numerous conferences and developed the CannaCertified cannabis education platform.

• Cannabis and Hemp Enthusiast
• One of the first female business owners in the hemp and cannabis industry
• Co-founder of one of the largest and most established CBD manufacturers in the country
• Spent the past decade leading brands in the hemp and cannabis industry
• Developed a certification program
Connect with Katie on LinkedIn

Get a quote from Katie on your product idea today!

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