CBD can be an investment in your health—because some of the products can hit you where it really hurts: your wallet. Why are CBD products so much money, and is it just a way for manufacturers of CBD products to take your hard-earned money? These are some of the questions we are going to explore in this short article, so keep reading to find out if the price is justified!
Industrial Hemp vs. Marijuana
CBD products have become an increasingly popular solution for a wide range of health concerns and for good reason: The endocannabinoid system is intricately tied to things like inflammation, pain, anxiety, and more. CBD really got its start with the passage of the Farm Bill in 2018, which made the production and selling of hemp-derived products legal in the United States. Hemp is a plant sometimes confused with marijuana because they are both derived from the Cannabis sativa plant. What’s the difference between the two?
The industrial hemp plant is a variety of the Cannabis sativa plant that is specifically grown for industrial and commercial uses such as textiles, food, paper, and more. The hemp plant has been used for thousands of years for its fiber because of the plant’s quick growth. Industrial hemp plants are cultivated to have minimal Delta-9-tetrahydrocannabinol (THC), a chemical responsible for producing the “high” feeling in marijuana users. In the United States, industrial hemp plants are required to have less than 0.3% THC content.
The Skinny on Cannabidiol
Although the industrial hemp plant has significantly lower levels of THC than some other cannabis varieties used for medical and recreational uses, it has significant levels of other endocannabinoids. The body’s endocannabinoid system is a set of chemicals and receptors that exert specific effects. Two primary receptor types are commonly discussed: CB1, which is found primarily in the central nervous system (brain and spinal cord), and CB2 receptors that are found primarily outside the brain and spinal cord.
CBD stands for cannabidiol and is one of many cannabinoids. CBD has been found to have anti-anxiety, pain-relieving, and anti-inflammatory properties among an increasing list of other properties in scientific studies. CBD can be found in a wide range of products containing full-spectrum CBD to broad-spectrum CBD to CBD isolates.
A CBD isolate is a product in which the THC and other cannabinoids are meticulously removed leaving purely cannabidiol. Broad-spectrum CBD products ensure that all the THC is removed but leaves behind other cannabinoids, which are proposed to enhance the effect of CBD through the entourage effect. Full-spectrum CBD products have less than 0.3% THC in their formulation while leaving CBD and other cannabinoids in place.
Without getting too deep into economic theory, let’s explain two concepts that go into markets and ultimately the costs that consumers pay for products. The first concept to understand is supply, which is the amount of a product that is available for purchase. Supply is determined by the number of manufacturers and the cost to make the final products, among other factors. Generally, the more supply (number of products available) the lower the price because of the competition between different sellers.
The second factor that will help us understand a product’s price is consumer demand. Demand can be simply thought of as how many people want to obtain a particular product. The higher the demand and the lower the supply of a specific product, the more expensive the product will become and vice versa.
Factors that Make CBD Expensive
OK, now it’s time to answer the question you’ve been waiting for since opening the page. As we mentioned earlier, CBD derived from industrial hemp is a relatively new product to the market, having only been legalized for commercial use in 2018. This means that relative to other kinds of products, there are not that many manufacturers of CBD products, although this is quickly changing.
Because of the regulations that companies must follow to produce quality CBD and the equipment required to extract CBD from the industrial hemp plant, the current number of CBD manufacturers are limited. As the manufacturing and selling of CBD becomes increasingly accepted and embraced by the public, more companies are going to enter the CBD game.
As more companies produce CBD, the competition for customers becomes more fierce, and manufacturers will be forced to lower their prices and produce high quality CBD to compete. This is the process by which products become more and more affordable over time. Additionally, larger and often more established CBD companies are able to offer more affordable CBD products because these companies have access to a larger volume of supplies. If you shop at Costco or other major distributors then you know that prices can be reduced when purchasing in larger volumes and the same goes for manufacturers.
With many states legalizing medical and recreational marijuana more and more, people are curious about cannabis and the chemicals found in it such as cannabinoids. Combine that with the explosion in CBD and cannabinoid research in recent years—along with some of its potential health properties—and it’s no wonder that the demand for CBD products has skyrocketed. These two examples illustrate the basic economic concepts of the law of supply and demand, and explain, in part, why CBD products are currently so expensive.
We also have to remember the time and money that goes into cultivating hemp plants and creating the finished CBD product. Consumers are also demanding that their CBD products are tested for purity and consistent doses of cannabinoids. This process requires a company to hire an independent laboratory to analyze batches of the CBD it produces, which can be costly. The companies that produce CBD products are not going to lose money on their products, so all of these expenses are ultimately going to be passed on to the consumer through the price of the CBD product.