The fact that your clients' own market grows is the most important factor when choosing a niche. If their market is shrinking, there probably won't be enough business for you either. This blog series, "Spotnik," looks for and brings growth opportunities to your attention.
The legal cannabis market has two major parts: recreational drugs (THC-dominant cannabis and marijuana) and non-psychoactive CBD products.
CBD (cannabidiol) is the safe, non-addictive substance found in the cannabis plant.
Users take CBD for treating anxiety and depression, relieve stress, relieve cancer symptoms, prevent diabetes, relieve pain, and fight inflammation.
You don't get high on CBD.
THC, on the other hand, produces what many consider a “high,” or an altered state characterized by euphoria, pleasure, or heightened sensory perception.
Today, we'll focus on the CBD part of the cannabis industry.
So, does CBD grow?
Yes, the CBD market is growing.
After a downturn (-6.1%) during the first year of the pandemic, caused by the shutdown of brick-and-mortar dispensaries, specialized CBD retailers, etc., the industry is now back on track.
2019 saw thousands of CBD brands flood the market, and the ones that have survived the pandemic are now poised for stronger growth.
The CBD industry is expected to grow at a rate of 20% to 23% per year over the next 5 years.
Edibles is a fast-growing segment, with CBD appearing in several types of products, including drinks, snacks, and confectionery.
CBD pharmaceuticals (Epidiolex being the first FDA-approved one) are expected to boom, and they are forecasted to reach four times their current sales by 2026.
But CBD is not just for humans.
Forecasts suggest CBD pet products will increase by about 40% per year from 2020 to 2027. Example: Martha Stewart launched a new line of CBD-infused dog chews in January this year.
What Drives the Demand for CBD Products?
The demand is driven by:
There is a large presence of health-conscious consumers in North America, and more and more consumers see non-psychoactive CBD the same as other plant-based wellness ingredients.
Millennials (born 1981 - 1994/6) and Gen Xers (born 1965 - 1979/80) are driving the demand, and they account for over two-thirds (71%) of CBD users.
Some top brands have already incorporated CBD into their product lines, and even more are looking into it: food and beverage companies, personal care and cosmetics, "nutraceuticals," and pharmaceuticals are leading the way.
Two big brand, early movers are Nestle (Garden of Life: CBD liquid drops, spray, and softgels) and Molson-Coors (Veryvell: CBD-infused sparkling waters.)
What Types of Cannabis Businesses Are There?
I went through the portfolios of eight web designers / developers specializing in the cannabis industry.
Together, these agencies had built 62 websites. Their top types of cannabis clients were:
- 1CBD Companies, 23 clients (for example, Modern Medicinals)
- 2Dispensaries, 19 (TJ's Fine Dispensaries)
- 3Cultivators/farms, 9 (Whole Circle Farms)
- 4THC Companies, 3 (Nuvata)
- 5Staffing Service for the Cannabis Industry, 2 (The United Green)
- 6Vape Bars / Cannabis Consumption Clubs, 2
They had also built websites for a CBD dog treat company (Lazy Bones Treats,) a cannabis event organizer, a news site for cannabusinesses (Heady Vermont,) a cannabis legal service (Vermont Cannabis Solutions,) a hemp extraction lab (Northeast Processing,) a CBD beverage line, a medical marijuana clinic, a cannabis health consultant (Nurse Toni,) a cannabis festival, a cannabis seed company, and cannabis delivery service (The Good Leaf.)
What Services are Cannabis Businesses Buying?
The industry has been rebounding ever since its fall in Q2 2020, but the landscape looks a lot more digital now.
eCommerce is now the dominant distribution channel.
The most common complementary services provided with the 62 websites were:
- 1eCommerce solutions, 33 projects
- 2Branding, 30 projects
- 3SEO-services, 16 projects
- 4Content writing, 15 projects
- 5Packaging design, 10 projects
- 6Product design, 3 projects
- 7Ads, 3 projects
- 8Marketing collateral (print design), 2 projects
Examples of Cannabis Web Designers
Click the screenshots to visit the respective companies. Go here for more examples.
To get to know the industry, cannabis trade associations are a good start!
For more forecasts for the cannabis industry, click here for a ready-made Google search.