Just below the rows of energy and kombucha drinks at Westside Market, a deli in Manhattan's Chelsea neighborhood, are several glass bottles of Vibes. This drink comes in flavors like Strawberry Lavender and Blood Orange Lime, and is made with cannabidiol, commonly known as CBD.
But a lack of federal regulation and a patchwork of state regulations made it impossible for national retailers like Target and Walmart to sell Vybes. Jonathan Eppers, who left the tech industry to found Vybes in 2018, said that's holding back the beverage's potential growth.
“For the first two years, we were on a rocket ship,” Eppers said. “However, the patchwork of laws and regulations in this area makes it difficult to grow our business.”
A little more than six years ago, CBD, a non-intoxicating compound derived from cannabis or hemp, was poised to become the next big “IT” ingredient, appearing in beverages and products touted as having health benefits and benefits. It became part of the food wave. relaxation. Start-ups have flooded the market with products, many of which promise to relieve stressed and anxious consumers.
When it reached its apex around 2018, CBD was everywhere, found in water, chocolate bars, tinctures, gummies, serums, and more. Consumers can purchase athleisure apparel infused with CBD oil and feed their nervous pups CBD chews and treats. Large companies also got involved. Molson Coors has teamed up with a Canadian cannabis company to develop a line of CBD-infused beverages. Constellation Brands, the maker of Modelo beer, has invested $4 billion in a publicly traded cannabis company. Ben & Jerry's began considering developing ice cream with CBD.
However, in recent years, the industry has stagnated. Molson Coors ended its joint venture and Constellation wrote down more than $1 billion in cannabis investments. Large companies have shelved plans for CBD products, and hundreds of startups have shut down operations, switched to other ingredients, or simply adjusted their growth projections.
Hopes that the market would revive through industry efforts to include federal regulation of CBD in the new Farm Bill were dashed in the fall when Congress passed an extension of the 2018 version of the bill.
Also contributing to the industry's rapid decline is the simple fact that many people are confused about what CBD is, is it legal, and whether it will get you high? .
This compound is derived from the cannabis plant. Marijuana is a cannabis plant that contains high concentrations of tetrahydrocannabinol (THC), which can get users high. Cannabis plants with low THC concentrations are known as hemp.
Five years ago, Congress legalized hemp-based CBD, but CBD made using high levels of THC remained illegal at the federal level. However, the Food and Drug Administration has refused to enact rules that would allow CBD to be used in dietary supplements or conventional foods. The agency said it needed to create a new regulatory pathway for CBD, but there was not enough evidence to decide how much and for how long people could take it. (The FDA has approved one drug that contains CBD and is used to treat some epileptic seizures.)
Similar to marijuana, which is still illegal at the federal level, CBD has been legalized in many states, creating a quagmire of different regulations and issues for manufacturers.
“We saw the writing on the wall at the end of 2019 and into 2020. It will take much longer for federal regulations around CBD to be enacted,” he said in 2018. said Ben Witte, who founded Recess. Those drinks now account for less than 10 percent of his income. He focuses instead on mocktails and Recess Mood, a non-CBD relaxation drink.
Even before hemp-based CBD was legalized, stores and online retailers were flooded with products containing CBD. But none of them have been approved by the FDA, and some have promoted outrageous and unsubstantiated claims that the injected products can help with everything from treating Alzheimer's disease to curing cancer.
The FDA has begun issuing warning letters to manufacturers and retailers who sell unapproved CBD products or make unsubstantiated claims about their products. In 2020, the FDA found that among a sample of products, 18% of products contained significantly less CBD than stated on the package, while 37% contained significantly more CBD. I discovered that
“I think the bigger question here is why do we need to include it in food in the first place,” says Dr. Peter Lurie, president and executive director of the watchdog group Center for Science in the Public Interest. “What is the purpose? What does this ingredient actually do for you?”
He added: “Despite the lack of evidence that CBD is effective in treating any of the rare epilepsy syndromes for which it has been approved, these companies have managed to create a belief that society needs these products. I did,” he added.
As questions about the compound grew, state regulators began removing CBD products from store shelves and confiscating the products. Businesses also encountered hurdles in online sales and advertising.
“Once I posted about a CBD product on our page, it got flagged and my account on Meta was permanently banned from advertising,” said Vitalleaf, a branding company that makes CBD chocolates and skins. said Clarice Coppolino, director of product development. Care and tinctures.
The Covid-19 pandemic has also hit the industry hard. Sales soared in the early weeks and months of the pandemic as nervous consumers sought relief from CBD-infused products, but interest from big companies and investors waned.
Carmen Blais, a consultant who has worked with companies that sell consumer packaged goods, said: “With the impact of coronavirus, consumer packaged goods companies have clearly moved away from the CBD space, and what they were able to do there was simply shift their focus to food demand. We have started to focus on fulfilling our needs.”
Amid heavy industry lobbying, several states have begun legalizing hemp in various products. For example, in 2021, California passed a law allowing hemp-derived CBD to be used in all food, beverages, and dietary supplements sold within the state. Other states have legalized CBD with restrictions on the types of products it can be used in, the amounts, and where it can be grown.
Eppers started Vybes after trying CBD oil to relieve stress and anxiety he felt while working in the technology industry. The product gained a following for the first two years, but around 2020 California regulators began pulling the drink from shelves. So Eppers banded together with other CBD manufacturers to push for legislation that would allow the use of CBD products in the state.
But a confusing mishmash of rules is hampering Vybes' growth. “We make drinks that a lot of consumers want, but the big chains don't touch that,” Eppers said.
For now, Vybes, made with 25 milligrams of hemp CBD, has found a home in small, local, independent grocery stores across the country, Eppers said.
“When we entered this category in 2018, the sky was the limit,” he said. “No one starts a business to reach a low ceiling.”
