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Since the coronavirus pandemic spread to the U.S., it has shaken up how people purchase food, clothes and even cannabidiol (CBD). From Q1 to Q3 2020, Brightfield Group saw CBD consumers move their purchasing from smoke or vape shops to buying online directly from companies and CBD specialists. But what about other emerging, more mainstream CBD channels such as pharmacies and beauty retailers? These channels have and will continue to present unique opportunities within the industry. 

 

Pharmacies Focus on Topicals

Pharmacies were among the brick-and-mortar CBD channels that saw a bump in consumer shopping in Q3 2020, according to Brightfield Group’s consumer survey; 18% of CBD consumers reported buying CBD through this channel in Q3 compared to only 8% in Q1. This is partially because pharmacies have been able to remain open as essential retailers throughout the pandemic, offering brick-and-mortar shoppers a consistent and convenient location to find CBD.  

Consumers who use CBD to treat a chronic condition—or the “Chronic Symptom Attackers”—are those who are most likely to purchase at a pharmacy, with 37% purchasing through this channel in Q3 2020 (up from just 9% buying in pharmacies in Q1 2020). And with more than half of Chronic Symptom Attackers reporting use of CBD topicals in Q3, it seems some of them have found their preferred topical products on pharmacy shelves.

Chain pharmacies have expanded their CBD offerings throughout 2020. However, they continue to only stock topicals, as CBD cannot be marketed as a dietary supplement or added to food under current federal law. CBD topical products are only legal if they don’t have disease claims on their packaging.  

Among pharmacy chains, CVS has been the most active in adding CBD products. Throughout 2020, CVS added numerous CBD products from different brands—including Burt’s Bees, Hydrocanna (Irwin Naturals), Karibo and Sky Organics—to its website and select stores in California. The majority of these new CBD products are skincare-focused for the face and body, while the retailer’s initial CBD lineup, which included CBDMEDIC and Medterra, was therapeutically focused with products like balms, muscle rubs and roll-ons. CVS also partnered in November 2020 with Ecofibre (owner of Ananda Hemp) and its EOF Distribution division to launch the Balans Labs skincare line for exclusive sale at select CVS locations.

The Rite Aid drugstore chain, which has expanded the number of stores carrying CBD products since introducing them in two states in 2019, intends to focus more on CBD in the near future. In a September 2020 earnings call, Rite Aid COO Jim Peters noted the chain is overhauling its merchandising approach and curating an assortment of products that supports its customers’ whole health needs. The company is doing so by enhancing and expanding categories like CBD products, holistic skincare and healthy beverages.

Pharmacies have benefitted from the CBD industry’s growing mainstream momentum, which is still drawing in new consumers. In turn, CBD also benefits from pharmacies’ position in the mainstream—the public already recognizes, understands and has confidence in the infrastructure surrounding pharmacy retailers. Shoppers’ trust in drugstores should help lift social stigmas surrounding CBD use and concerns about CBD products’ safety and efficacy as these retailers continue expanding their offerings. 

 

Beauty Retailers Hold Spending Power

Although beauty retailers are experiencing lower foot traffic than before the coronavirus pandemic, this sales channel remains a viable one for CBD companies. Consumers who patronize beauty retailers tend to spend more on this channel than consumers shopping through other distribution channels. While only 11% of all CBD consumers reported spending an average of $100 or more per CBD product in Q3 2020, that percentage rises to 21% for those shopping through beauty retailers.

Due to the COVID-19 virus, CBD purchases at beauty retailers declined slightly, as these retailers were not considered essential businesses and were generally closed from March through May 2020. In Q3 2020, 3% of CBD consumers reported buying CBD through this channel compared to 4% in Q1. Many beauty specialist chains spent this time improving their CBD product assortment to appeal to beauty and skincare enthusiasts looking to CBD for self-care. For example, in late February 2020, Sephora announced its new CBD standards on quality, sourcing and testing, as well as its addition of Prima, a hemp and botanical-based skincare product line. The retailer used endcap displays to highlight the Lord Jones line of CBD products and offered a Sephora Favorites CBD Skincare Kit to encourage consumer trials.

Sephora’s rival Ulta Beauty also focused on CBD in 2020 by devoting extensive in-store shelf space to CBD products. The retailer added the Hempz line of CBD-infused products to the original Hempz body care line that contains hempseed oil. The retailer also expanded its range of CBD products to include hair care, oral care and skincare products from Hello (a subsidiary of Colgate-Palmolive), Derma E, e.l.f. Cosmetics, Fekkai, Pur, Smith & Cult and Truly Beauty. While consumer visits to beauty retailers have slowed during the COVID-19 pandemic, this channel provides a great forum for brand discovery, as customers can interact with store staff and receive product recommendations.

As the CBD industry looks forward to widespread COVID-19 vaccine availability in 2021 and the gradual resumption of usual activity, pharmacies and beauty retailers have the opportunity to offer consumers a wide variety of topical products to meet their needs. Therapeutic-focused topicals can appeal to fitness buffs and others who are exercising to lose weight gained during the pandemic, while CBD skincare topicals can appeal to beauty aficionados who adopted these CBD products as part of their at-home self-care regimen.

 

Virginia Lee is the CBD research manager at Brightfield Group. She develops and executes syndicated and customized research covering the U.S. CBD market.

Madeline Obrzut is a content specialist for Brightfield Group. She’s a cannabis professional that closely watches the industry from both a market research and consumer perspective.