Companies Were Big on CBD. Not Anymore.
CBD Sparkling Water Brand, Molson Coors
A little more than six years ago, CBD, the nonintoxicating component that is derived from cannabis or hemp, was poised to be the next big “it” ingredient, part of a wave of beverages and foods that were promoted as having healthful benefits or providing relaxation. Start-ups flooded the market with products, many promising to soothe stressed-out and anxious consumers.
At its apex around 2018, CBD was everywhere, appearing in water, chocolate bars, tinctures, gummies and skin serums. Consumers could buy athleisure apparel infused with CBD oil and feed their nervous pups CBD chews and snacks. Big corporations even jumped in. Molson Coors teamed up with a Canadian cannabis firm to create a line of CBD-infused drinks. Constellation Brands, the maker of Modelo beer, made a $4 billion investment in a publicly traded cannabis company. Ben & Jerry’s began looking into creating CBD-infused ice cream.
In the last couple of years, however, the industry has stalled out. Molson Coors ended its joint venture, and Constellation has written down more than a $1 billion of its cannabis investments. Large companies have shelved plans for CBD products, and hundreds of start-ups have either shut down, shifted to other ingredients or simply tempered their growth projections.
Hopes for resuscitation of the market through efforts by the industry to put federal regulation of CBD into a new farm bill were dashed when Congress passed an extension of the 2018 version of the bill in the fall.
Also contributing to the precipitous fall of the industry is the simple fact that many people are befuddled by what CBD is, whether it is legal and if it will get them high.
The compound comes from the cannabis plant. Cannabis plants that contain high levels of tetrahydrocannabinol, or THC, are marijuana and can get users high. Cannabis plants with lower levels of THC are known as hemp.
Five years ago, Congress legalized hemp-based CBD, though CBD made with higher levels of THC remained illegal at the federal level. But the Food and Drug Administration has declined to create rules allowing CBD to be used in dietary supplements or conventional foods. The agency said that a new regulatory pathway for CBD must be created and that there was not enough evidence to determine how much of it could be consumed and for how long. (The F.D.A. has approved one drug that contains CBD and is used to treat some epileptic seizures.)
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