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These Are the 3 Biggest Obstacles Facing CBD Drink Companies Right Now

Published on:

November 20, 2019

What started out as the subject of pharmaceutical research, cannabidiol or CBD has quickly entered the mainstream. Since 2017, CBD has made its way into everything from lotions to chewing gum, dog treats, and even beverages. Despite coming such a long way in a shockingly short amount of time, CBD beverage companies still have their fair share of challenges to address before they can relax with a pour of their product.

Today we're tackling the three biggest obstacles facing CBD drink companies right now:

1. Lack of Consumer Education

It isn't news that the consumption of cannabis-derived compounds in any form is a polarizing issue. But many of the misconceptions about cannabinoids like CBD come from an ignorance of the science behind these compounds.

A recent report by the US-based Grocery Manufacturers Association (GMA) illustrates the extent of the confusion surrounding CBD in particular. In a survey of American adults, 62% indicated they have some awareness of CBD. From among those survey respondents, 39% said they believed that CBD was "just another name for marijuana." This is incorrect.

In reality, CBD can most simply be understood as a chemical component found naturally in cannabis or marijuana: it's the second most prevalent active ingredient in the plant, but it lacks the psychoactive side effects of tetrahydrocannabinol or THC — the chemical that gets you high. Sounds easy enough, right? But still, 23% of the roughly one third of all respondents who said they had purchased commercial CBD products said they did so "because they thought it would intoxicate them or give them a high."

Despite its prevalence, it's clear that consumers are still largely misinformed when it comes to CBD — and not just in the question of what CBD is or what it can do for you. Consumers are also misinformed in another significant area: according to the same GMA report, ¾ of Americans believe the US Food & Drug Administration (FDA) regulates commercial CBD products. Of those who indicated they had an awareness of CBD, 76% said they believed commercially sold, CBD-infused products are being regulated at the federal level, with 16% of respondents unsure one way or the other if these products are being regulated.

So how closely regulated is CBD? The truth is, not much. There's a reason why many in the industry consider the CBD market to be ‘the modern day Wild West.' As CBD continues to boom, concern over the consequences of this confusion have been echoed by others in the CBD arena looking to protect their business and their consumers, leading to our second largest obstacle: regulatory oversight.

CBD drink companies

2. Regulatory Oversight

As Rolling Stone explains, "Since marijuana is federally classified as a Schedule I narcotic, and hemp - marijuana's low-THC, high-CBD cousin - is still highly regulated, CBD has existed in a legal grey area." And while the 2018 Farm Bill has helped separate ‘hemp' - defined as a cannabis plant containing less than 0.3 percent THC - from the term ‘marihuana' as described by the 1972 Controlled Substances Act, there is still confusion surrounding how and to what extent cannabis-derived compounds like CBD should be regulated.

As the future of CBD remains uncertain for the time being, many of the industry's biggest beverage companies and retailers have been skittish about entering the fray - but that hasn't slowed the rise of CBD. Instead, it's left the CBD market open ground for entrepreneurs willing to take on a little more risk, including small drink companies.

However, without a regulatory body closely monitoring the quality and consistency of CBD products, consumers have no way of knowing what's actually in them and well-intentioned businesses are also put at a disadvantage. Tests conducted by the investigative team at NBC New York on a variety of CBD products revealed some of the consequences of a lack of regulation: overall, less than half of the samples tested actually had the stated amount of CBD inside the product, while others were found to be contaminated with traces of dangerous chemicals like pesticides and lead.

These results echo a concern voiced by the National Organization for the Reform of Marijuana Laws (NORML). In their written testimony to the FDA, the group asks for the provision of "regulatory guidelines governing CBD-infused products, including best practices for their manufacturing, standardization, and purity." Unfortunately, it seems likely that "the grey area" is where CBD will stay, at least for the next 5 or so years; that is, unless clearer policies are cast and a regulatory body is appointed to enforce them.

For now, this puts additional pressures on CBD drink companies to be more thorough in evaluating their CBD sources and testing the quality of their products regularly.

3. Formulation Challenges

There may be a long road ahead of us in terms of consumer education and regulatory stability, but Flavorman is already well equipped to help CBD beverage companies stay ahead in the art and science of developing great tasting CBD drink products.

Flavorman began researching CBD's potential in the beverage space in 2017. Flavorman sought to find a way to develop more broadly marketable, easier-to-drink CBD-infused beverages. In this process, we've successfully developed a water-soluable CBD compound, called SoluCan BD, which allows us to do just that.

CBD is naturally hydrophobic, but overcoming this significant technical challenge, Flavorman's formulation allows CBD to dissolve (not separate) when combined with liquid. This provides a consistent and uniform dose of CBD in each serving of a beverage. SoluCan BD also has the added benefits of being shelf life stable and completely customizable, meaning it can be added to almost any beverage formula imaginable.

In its isolate form, this formulation blends cleanly and easily, making it the perfect solution for entrepreneurs seeking to create a delicious, flavored CBD drink for consumers; that is, one that contains CBD without necessarily tasting like it.

When you're ready to change what the world is drinking — and in the process, capitalize on a rapidly growing 22-billion-dollar industry — give us a call at (502) 273-5214 or get started with our web form, here.

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