CBD proving grounds: 2022 Ingredient trends for food, drinks, dietary supplements, and natural products

Nutritional Outlook, Volume 25, Issue 1

The pandemic put the brakes on massive CBD growth, but this is only the beginning for the burgeoning category.

Following immense triple-digit sales growth in recent years, the global pandemic put the brakes on cannabidiol (CBD) sales.

Before the pandemic went global, CBD sales in 2019 in the natural supplement ingredients market had grown 113% over 2018, according to data from market researcher SPINS (Chicago) tracking U.S. natural channel supplement ingredient sales during the 52 weeks ending October 6, 2019. Fast forward, and by the end of pandemic year one in 2020, CBD sales in the U.S. natural enhanced channel had declined 35%. By the end of pandemic year two in 2021, SPINS data show that CBD sales in the U.S. natural supplement ingredients channel declined another 25% in the 52 weeks ending October 31, 2021.

These declines aside, CBD remains one of the natural channel’s top 25 bestselling ingredients. That likely indicates that CBD is not going anywhere, having established itself as a desirable and profitable ingredient. In fact, one could argue that this is the beginning for CBD, a time for the category to evolve and mature.

The kind of growth experienced by CBD had to end at some point, says Haleigh Resetar, corporate communications specialist for SPINS, and it was only natural that purchasing habits would change during a global pandemic. “Some of the decline can be attributed to its unsustainable growth year and the shifting of priorities during the pandemic, but also to the market starting to become saturated with several ingredients, all offering similar, yet slightly different, benefits—giving shoppers more options, and often more confusion,” she explains. “While CBD is still popular as a dietary supplement, it is starting to emerge in other categories, including body care. It is no longer the new kid on the block, so its decline is common for a hot product after many years of continued growth.”

Hemp-derived CBD has successfully entered the mainstream, but its continued progress will not be without obstacles. For example, while CBD is growing in popularity in body care, with major retailers such as CVS and Walgreens now stocking beauty and topical pain-relief products containing CBD, it is still not immune to regulatory scrutiny. In warning letters FDA sent to companies in March 2021, the agency explained that when topical analgesic products containing CBD make pain-relief claims, it constitutes an unapproved drug claim, even if those claims are approved for the active ingredients in the formula.

Moreover, while major retailers are now comfortable stocking topical CBD products, they still refuse to sell ingestible CBD products. So, despite the popularity of CBD, as well as its presence in independent retail and e-commerce, the lack of presence in the mainstream retail channel will continue to hurt CBD in terms of recognition and trust by consumers.

“The CBD trust gap is one of the biggest barriers preventing the CBD and natural products industry from achieving its full potential,” says Nicole Brown, chief innovation officer for Open Book Extracts (Roxboro, NC). She points to a recent survey the Consumer Brands Association fielded in July 2021 with the help of Ipsos on 1,000 American adults, who rated their knowledge of CBD as 3.3 on a scale of 1 to 10. “The top reasons consumers buy CBD are to alleviate pain, sleep disturbances, or anxiety,” Brown continues. “However, many unanswered questions remain regarding the safety and quality of products containing CBD and their effectiveness across those need states. Consumers deserve to be empowered with credible, scientific information to make informed choices about their health.”

“With CBD being a relatively new offering in the marketplace, little testing to support benefit claims, over 2,000 CBD brands to choose from, and retailers offering multiple brands, the CBD consumer obstacle course can be confusing and frustrating,” says Jesse Karagianes, senior vice president, revenue growth, for CV Sciences, makers of +PlusCBD.

Brands can address consumer confusion and trepidation through transparency, he says. “Our commitment to leading with science and nature, trust and integrity, and always putting the customer first also makes a huge difference in minimizing those obstacles,” says Karagianes. “As a legacy brand in the CBD industry, we stand out in the category with a proven track record for providing CBD products that are safe and effective. Since the passing of the 2018 Farm Bill, there has been a surge in bulk hemp supply across the nation, but not all CBD is equal. CV Sciences +PlusCBD products have and will always undergo rigorous quality standards.”

Because of the lack of regulatory oversight of CBD products, transparency is important to many consumers. Third-party testing of raw materials not only ensures quality and consistency for manufacturers but can also give peace of mind to customers. Posting certificates of analysis on one’s website can therefore be an important way to establish trust with customers. Brands that are particularly dedicated to demonstrating safety, quality, and transparency are going through the self-GRAS (Generally Recognized as Safe) affirmation process, which requires toxicology studies that are then made public. CV Sciences was among the first to go through with this. Most recently, HempFusion announced the self-affirmed GRAS status of its proprietary hemp-derived CBD extract.

Although few brands so far have been willing to dedicate the time, resources, and money required to achieve self-GRAS affirmation, actions such as this not only prepare brands for imminent regulatory pathway but also have the benefit of adding to the growing body of research demonstrating the safety of hemp-derived CBD products.

“The natural products industry and consumers alike are eager for evidence-based health data, and we’re seeing this factor most prominently in the CBD and cannabis space,” says Brown. “We are energized by this burgeoning movement to democratize scientific insights about natural products, which will, we firmly believe, lead to healthier lives.”

Large-scale research initiatives such as that undertaken by Validcare and Radicle Science are going to play a big role in establishing the safety and effectiveness of hemp-derived CBD products.

Validcare recently shared the results of its first cohort with Congress. These results showed that none of 839 subjects taking one of 13 different CBD products experienced liver toxicity. A second cohort is now underway, and results from the first round are awaiting publication.

The Radicle Science ACES (Advancing CBD Education and Science), an open-label, randomized controlled study with a sample population of almost 3000 people, examined the effectiveness of 13 CBD products across five health outcomes: wellbeing, quality of life, longer-term pain, feelings of anxiety, and sleep quality. Those results showed that subjects taking CBD saw a 71% improvement in wellbeing, 63% saw a clinically significant improvement in anxiety, 61% experienced a clinically meaningful improvement in sleep quality, and 47% experienced a clinically meaningful improvement in pain.

More work is underway, which will not only add to the scientific understanding of CBD but also instill confidence in the products’ safety. Of course, brands with a proven track record of safety will be preferred, which should incentivize participation in studies such as those from Validcare and Radicle Science.

Regulation

While the research being undertaken will go a long way in establishing trust in hemp-derived CBD, it has its limits in terms of convincing regulators that CBD should be regulated as a supplement. Currently, FDA still maintains that the drug preclusion clause prevents CBD from being marketed as a dietary supplement because it was investigated as a drug first. Recently, Charlotte’s Web and Irwin Naturals took the leap of submitting a New Dietary Ingredient notification (NDIN) to FDA. The process of submitting an NDIN requires data demonstrating the reasonable expectation of safety under the recommended conditions of use. Despite the wealth of data provided by the firms, FDA rejected the NDINs anyway, citing the drug preclusion clause.

This setback, however, does not mean hemp-derived CBD brands should not invest in science demonstrating the safety and efficacy of their products. In fact, achieving self-GRAS affirmation and preparing NDINs ahead of regulation are important ways to protect one’s future in a CBD market that will require FDA compliance. The recent legislation being considered by Congress that would establish a regulatory pathway for CBD would simply change the language of the Federal Food, Drug, and Cosmetic Act (FD&C Act) to include hemp-derived CBD in the definition of dietary supplements. When this happens, that means all these CBD brands will have to file NDINs and get their GRAS status if they want to be used in foods. The companies that already have done the work around GRAS status and NDIN will be at a significant advantage.

“I don’t think companies should wait. If they are in it for the long haul, then there is a lot that they can do now to give them the business and regulatory advantage down the road,” explains Ashish Talati, partner, Amin Talati Wasserman LLP. “I am talking about having safety studies, clinical trials, etc., that take a long time to develop but give a company an edge over their competitors.”

In the meantime, the industry has to deal with the patchwork of state laws trying to fill in regulatory gaps. “The biggest challenge the CBD category faces is state regulation which can significantly differ. Labeling compliance, state registrations, and local ordinances restricting CBD sales cause operational and logistical challenges,” explains Karagianes. “This current state also requires top-notch due diligence to ensure regulatory demands are met. CV Sciences hopes that the future will bring FDA regulation that ensures data and science lead the way in an ever-changing regulatory landscape.”

“Though it doesn’t change the federal status of CBD or eliminate risk at the federal level, state-by-state CBD regulations can be helpful by giving product manufacturers opportunities to legally sell their CBD products within certain states, especially in states where there are specific, clear requirements that must be followed,” Talati adds. He does, however, acknowledge the challenges that differences in state laws can pose. “Keeping track of the patchwork of unique state rules for these products requires a lot of time and effort, since states are constantly changing, updating, or adding new requirements,” he says.

Looking Ahead

While hemp-derived CBD will continue to evolve and grow as an ingredient, the minor cannabinoids will also emerge as valuable compounds for human health. Some are already gaining steam.

“The coming year, 2022, has the potential to be remembered as the year when minor cannabinoids achieved major status. While it’s true that the cannabis market is generally interested in tetrahydrocannabinol (THC), the intoxicating cannabinoid that most marijuana consumers have come to know and love, as well as cannabidiol (CBD), cannabinoids such as tetrahydrocannabivarin (THCV) and cannabinol (CBN) have started to attract attention on their own,” says Brown. “The future of cannabinoid products is bright due to the countless applications of pure, isolated minor cannabinoids, including cannabigerol (CBG), CBN, cannabichromene (CBC), THCV, and cannabidivarin (CBDV). The new cannabinoid consumer is looking for an exact, consistent experience to reliably target either a particular medical ailment or to bring about a specific, desired effect.”

According to Brown, THCV is being marketed and studied as a weight-management product because it may help suppress appetite while also supporting energy and focus. Topically, THCV may also help fight acne. CBN, for its part, shows promise for sleep support as well as pain relief and appetite stimulation, says Brown. As a topical ingredient, CBN may help with the treatment of psoriasis, dermatitis, and other skin-irritating conditions.

There are many minor cannabinoids like the ones mentioned above that offer benefits to consumers. Considering the potential of the minor cannabinoids, and the popularity ofcannabinoids such as CBD, there might be cause for urgency to begin extracting, marketing, and conducting research on these minor cannabinoids. For one thing, minor cannabinoids may not yet run up against the drug preclusion clause of the FD&C Act and may therefore have an easier path to market than CBD. However, because of the many potential benefits, it would be no surprise if the pharmaceutical industry was also actively trying to investigate these compounds.

Expect more competition from existing dietary supplement manufacturers as well as they enter the hemp-derived cannabinoid space to get a piece of the action. More and more are seeing its profitability, and while they may not be as experienced in CBD, they can leverage their expertise in other ingredients to make attractive and functional formulas that can support numerous health states. This means that the CBD space will continue to become more saturated. Brands that have dedicated themselves to CBD may therefore have a decision to make: to diversify, or not to.

Brands such as CV Sciences and HempFusion are good examples of companies that have deep roots in hemp-derived CBD but have made it a point to move beyond CBD and establish themselves as wellness companies by introducing non-CBD product lines or acquiring non-CBD product companies. CV Sciences, for example, recently launched two new immunity products which do not include CBD. HempFusion, meanwhile, acquired the probiotic supplement manufacturer Probulin in 2019, which the company says is its largest and fastest-growing brand.

“Our strategy to launch two immunity products was based on our company’s mission to bring innovative ingredients, with clinically backed research, to address specific health challenges during the pandemic,” says Karagianes.

Giving new and existing customers more options has its advantages. “As the CV Immunity line does not contain CBD, we are finding that our existing customers are adding CV Immunity to their normal CBD routine,” he says. “We are also finding that the product line has opened an entry point for new consumers who might be interested in a non-CBD option.”

So, having already established trust with customers, even if some consumers decide to stop taking CBD, they may still be inclined to buy one of CV Sciences’ immune health products. On the flip side, new customers who may only be interested in immune products may eventually decide to explore the CBD product options.

The years to come will be a crucible for manufacturers of hemp-derived CBD and other cannabinoids, separating those who were simply exploiting a trend and those who are dedicated to providing high-quality, safe, and effective products to customers looking to enhance their health.