2020 State of the CBD Market: A Pricing Review
It’s now been 14 months since Vince and I launched Big Sky Botanicals. I thought it would be a good idea to do a review of CBD pricing found in the marketplace today to help shed some light on the current situation.
When we launched, we knew we had some of the most competitive pricing available when measuring price per milligram. We thought that normal market forces would cause other brands to reduce or eliminate the premium they were charging. While there have definitely been some price corrections, I was surprised at the prices other companies are still charging their customers today.
MLM or Network marketed products continue to be the most overpriced, followed by brands being sold in retail outlets. Consumer direct brands, such as ours, continue to provide the most competitive price per milligram, but there’s still a lot of variances there as well. Below is a breakdown of typical PPM by category.
Setting the Stage
First, let’s be clear that this discussion is only about real CBD products that pass the quality test - a high-quality hemp source, expertly extracted, and lab tested for quality, potency, and purity as well as the spectrum and any specialized processing like water-solubility. It's not hard to find products that don't pass this test and many CBD-restricted marketplaces like Amazon and Groupon even sell a host of misleading products that don't contain CBD at all.
Once you get past the hurdle of finding a quality, truly-CBD product, you are largely buying a commodity that might be compared to coffee. This would suggest that there should or could be relative pricing parity. However, as you will see, even in 2020 it’s still the wild west in the CBD world.
As you continue reading, you'll see me refer to the price per milligram or PPM. This measure is the amount in dollars that you'd pay per milligram of CBD content for a given product. This is determined by dividing the price by the total milligrams of CBD content in a product. This is an essential tool to use when comparing the relative value of one product or brand to the next.
If you're not familiar with the concept or want to learn more, the topic is covered in-depth in this article. You'll learn how to do the basic calculation, as well as how to take into consideration product qualities like spectrum and water-solubility.
MLM/Network Marketed CBD
Prices in this sector have come down from mostly over $1 per milligram, to $.20-50 cents per mg. Many of these companies will not even show pricing until you pay a membership fee, only to find out their pricing is not that great. Many show an inflated retail price and a lower, but still high “member” price.
Specifically, pricing on topicals in this sector continues to be astronomical, ranging from $.50 per mg to as much as $2 per mg and more for compound products like face creams. Many topical solutions are also adulterated with “heating” or “cooling” topical analgesics like menthol, camphor, and similar. Here at Big Sky, we do not add these ingredients into our topical, so when you apply it and get relief, you know it’s from the CBD itself.
With these brands, as is the case with all MLM’s, it’s less about the products and more about the opportunities to get rich if you sign up all of your friends and family to be part of your “network”. This deflects attention from product quality and pricing and makes educated unbiased purchasing decisions tough.
Retail Store Shelves
Hopefully, everyone knows that countertop displays at the gas station are not the place to find good quality, fair priced CBD products. It is, however, possible to find quality products at health food stores and other retailers.
These retailers that are stocking CBD typically go with the “safe” brands, which were the earliest, well-financed companies. Being first to market gave them a huge advantage, as would be expected, but this also allowed them to set pricing in a vacuum, and they did, very high.
For example, one dominant brand in this sector I've been watching is still charging over $.50/mg for most of its original full-spectrum CBD products. Recently, they have added broad spectrum oils at much more reasonable prices, but their largest size is 500 mg and is $.11/mg.
Most challenging for consumers is the wide range of prices seen on the shelves with no explanation, labs for content verification, or way of comparing them. In my local health food store, they stock at least 6 brands with prices ranges from over $1/mg to $.10/mg...? When I ask the manager about this, he said consumers just have to try different brands to see which they like best.
As recommended in our CBD buyers guide, we suggest you proceed cautiously when buying CBD at retail stores. You need to do your due diligence to ensure you're buying a quality, pure product at fair prices.
Consumer Direct Brands
Brands like ours that sell products online directly to consumers are where you tend to find the most price parity. Most sellers are pricing their products below $.20 per mg, although some are still trying to justify prices a lot higher than that.
Many brands utilize CBD isolate to drive prices down to as little as $.04 per mg BUT given the fact that you have to take 3-5 times as much Isolate to get the same effect as a full or broad-spectrum product, it's actually misleading. Though this is by far the most fairly priced category, it's still important to be checking that the products that you're purchasing are high-value.
The Big Sky Pricing Commitment
As a Big Sky Botanicals client, you can rest assured that you're getting fairly-priced, high-value products as this is a pillar of our brand commitment to our clients. We offer base retail pricing at $.13/mg or lower across our entire product line, with bulk sizes as low as $.07/mg.
We also recognize that so many of you rely on CBD for daily relief, and accessible pricing is key. Aligning regular use with low pricing, earlier this year we launched our Charter Buyer Club. The program allows all of our customers to enjoy up to 20% off orders for life.
Each order placed graduates to a higher level of discounting. Once you've reached your 4th order, you'll enjoy a 20% discount for life. This reduces our price per milligram down below $.06 in some cases - pricing that is unheard of anywhere in the industry. Learn more about the program here.