YCBD - What Do You Pay For CBD?
Pricing schemes for CBD products are as variable as the products themselves and impacted by such factors as quality of ingredients, potency, and production. In a pricing analysis that compared over 3000 CBD products across 100 brands, a recent analysis conducted by Leafreport found that the price difference between the cheapest and most expensive topicals increased to 11142% as of the end of November 2021. In April of 2021, that difference was 4718%. Leafreport created a price index to compare brands: “Bargain grade” brands (priced ranging from $.01-$.076/mg CBD), “Market grade” brands (priced ranging from $.077-$$.167/mg CBD), and “Pricey grade” brands (priced above $.168/mg CBD).
“Bargain grade” CBD brands analyzed in the report included Extract Labs , Vida Optima and Erth Hemp among others while “Market brands” featured names like Receptra Naturals , cbdmd (OTC: YCBD) and Elixinol (OTC: ELLXF) . Upmarket labels like Foria , PureKana and Kushly made the list of “Pricey brands” by Leafreport’s metrics. The vast pricing spread between “bargain” and “pricey” CBD products is not new to the market. Still, the ever-widening gap is noteworthy, as are a number of Leafreport’s other findings related to the discrepancy.
While CBD topicals and creams showed themselves to range most widely in pricing among product categories, there was also a significant 3561% gap between the most least expensive products across all products. The difference between the cheapest and most expensive products in the edibles category was also noteworthy at 5100%. Gummies and pet tinctures posted the least difference in pricing between “bargain” and “pricey” brands at 833% and 858% respectively.
Leafreport spoke to a variety of CBD industry experts in order to gain a greater perspective on the factors that influence pricing. Responses from Laura Fuentes of Green Roads CBD and Winston Peki of Herbonaut highlight the current lack of regulation in the CBD industry, which allows some companies to skimp on materials and the production process without penalty. This can seriously affect a product’s purity and potency, but due to ongoing issues of inaccurate labeling and false product claims, cost-conscious customers often don’t realize that they’ve purchased an inferior product until it’s too late.
Peki specifies that there are three production factors that influence price: hemp cultivation processes and the hemp plant parts used; extraction type, and vertical integration of the brand, which enables manufacturers to optimize costs by having more control over each step of the process. He takes issue with comparing CBD product prices based on how much CBD you get for a certain price, citing the value of other hemp compounds that can enhance and individualize a product’s effects. When it comes to topicals and edibles, the difference between an isolate and full-spectrum hemp makes a big difference in cost, as does the use of “boilerplate” formulations that are cheaper because production is standardized rather than curated. Jim Higdon of Cornbread Hemp affirms that the diversity and quality of ingredients are a major factor in pricing such as when the product has a certified organic designation.
So what does Leafreport’s brand data reveal that might be of use to CBD consumers ranging from the budgetista to the aficionado with ample discretionary funds? Leafreport breaks this down by product category. For example, Industrial Hemp Farms showed up as the least expensive brand on the market across all CBD products (unchanged from the prior year’s report). The brand offers the cheapest full and broad spectrum tinctures, though, in a previous review of their products, Leafreport found that several products showed higher than the acceptable variance for potency levels. Her Highness came in as the most expensive brand of full and broad spectrum tinctures, but Leafreport notes a dearth of information available from the company about ingredient sourcing and production. Industrial Hemp Farms sells the least expensive topicals and creams as well, with Kushly ranking as the priciest brand in this category and overall.
The discrepancy in price between high and low-end brands was found to have increased within seven out of ten product categories since 2020 according to Leafreport’s data. This indelibly points to the ongoing reality of an unregulated market—a pressing issue with a resolution that is far from imminent.