The answer to this question is yes. However, just like every economic topic involving COVID-19, the causes and market forces that explain what we see are complicated and ambiguous. Although CBD sales grew nationally over the last 3 years, when looking at key metrics, that growth was not as steep as most forecasters had expected. At the same time, the number of companies manufacturing and selling CBD dropped drastically, although new companies continued to enter the market.
Zoom out: CBD sales were $108 million in 2014, $2 billion in 2018 and are projected to be $8 billion in 2022. However, the expected growth has slowed enough that the $4.1 billion in 2019 is only expected to grow to $5.3 billion through the end of 2021. This slowed rate of expansion makes it unlikely that sales will reach the projected $8 billion level in 2022.
So why did the growth curve flatten? The obvious answer is the COVID-19 pandemic, with CBD sales in 2020 only growing by $500 million over 2019. There are many reasons for this slowdown, but there is one very interesting theory that encompasses several areas of cultural upheaval seen in 2020. Some observers speculate that the combination of the lockdown, record unemployment, and an uncertain economic future prompted many to spend their discretionary income with less regard for future wellbeing, allowing short-term gratification to drive their decision-making process. They suggest that people turned to alcohol to manage anxiety, pain, and depression throughout the pandemic, and this is backed up by the 20% increase in liquor sales in the US reported by the Columbia University School of Public Health. Now, it looks like millions of people are once again turning back to CBD to remedy these conditions with a longer-term view, whereas alcohol offered only an acute, short-term solution.
At the start of 2019 there were approximately 3500 CBD brands available online and in retail outlets. It was estimated that in May 2021 there were only between 800 and 1000 CBD brands available in America. The majority of brands that folded were newer companies doomed by an unsustainable retail market, and many others were poorly run “fly-by-night” organizations that never stood a chance in the long run. That is good news for consumers, since the majority of companies still standing – as well as newcomers to the market – are strong companies with higher quality products. As larger, more established manufacturers get in the game, we expect cutting edge technology to continue to raise the quality and efficacy of new and existing products.
2020 also saw consumers purchase fewer CBD products in retail stores. Recent data shows that as we emerged from pandemic lockdowns in 2021, people craved the retail experience and are again purchasing in brick-and-mortar stores; this trend is seen across all segments, not just CBD. There is also evidence to suggest that although there were fewer CBD consumers overall, those that used CBD actually purchased more per person than in 2019. This loyal CBD consumer provides hope that the CBD market will remain strong in spite of the bizarre events of 2020.