The ABCs of CBD

The licensing community’s interest in cannabis remains strong, but the emphasis of late has moved from products containing tetrahydrocannabinol (THC) to items containing cannabidiol (CBD). Both offer many of the same benefits, according to proponents, such as their ability to alleviate anxiety, ease pain, and reduce seizures. The primary difference is that THC, the main active ingredient in marijuana, has significant psychotropic properties—in other words, users get high—while CBD does not.

Recent intellectual property owners entering the CBD space, through licensing or other means, include:

  • Greg Norman, who licensed GGB Beauty, a subsidiary of Green Growth Brands, for CBD personal care products. Supplier Tilray has a deal with Authentic Brands Group—Norman’s licensing agent—to provide CBD for goods associated with all properties across ABG’s portfolio, including under this agreement.
  • Willie Nelson, who introduced a CBD-infused whole bean coffee through his Willie’s Remedy brand, with plans to introduce other products in the future. Nelson launched Willie’s Reserve in 2015 as a marketer of marijuana strains and THC-based merchandise. Both brands are owned by GHC, a company co-founded by Nelson.
  • Bob Marley’s estate, which debuted three Marley+CBD Mellow Mood relaxation drinks. Licensee New Age Beverages already makes cold brew coffees, teas, and yerba mate drinks under the Marley brand; it purchased the Marley Beverage Company in 2016. The Marley name is also present in marijuana and THC vaping products with DockLight Brands.
  • Terrell Davis, former NFL athlete and Hall of Famer, who launched a line of CBD sports drinks after finding that CBD oil helped address his lifelong struggle with migraines. He is a co-founder of Defy, a performance drink marketer whose first product is a coconut water drink in three fruit flavors, infused with CBD and other ingredients.
  • Cesar Millan’s Dog Whisperer Productions, which entered the pet-friendly aromatherapy arena with licensee Unitrex. Represented by All American Licensing, Dog Whisperer granted rights for humidifiers, diffusers, essential oils, sprays, calming dog tags, and air fresheners, some of which contain CBD.
  • Kathy Ireland’s Level Brands, which owns CBD marketer cbdMD and offers gummies, topical lotions, oils, bath bombs, tinctures, and pet products. The items are sold under the Kathy Ireland Health & Wellness, Ireland Men One, and Encore Endeavor One brands.
  • Whoopi Goldberg, who markets both CBD and THC-infused goods under the Whoopi & Maya brand. The first merchandise came on the market in 2016 with the intent of soothing menstrual cramps, making the actress, activist, comedian, and talk show host one of the first licensors to enter the CBD space.

Retailers are also hopping on this trend. Barney’s is opening a cannabis shop in March that will feature CBD vape pens, edibles, beauty items, and wellness products, as well as accessories and lifestyle goods, from a variety of manufacturers. Neiman Marcus offers high-end beauty products containing CBD in select stores, from seven different brands, including balms, soaps, oils, masks, and other SKUs that claim to reduce irritation and control acne. DSW just announced that it would sell CBD beauty products from Seven7h Sense, a Green Growth Brands label. Green Growth also forged a deal with Simon Property Group to open CBD specialty shops in more than 100 of its malls.

A number of factors have played into the interest in this category. The substance has less of a stigma attached to it than THC does. CBD’s popularity has mostly been consumer-driven (rather than marketer-driven) to date; Mashable recently conducted a survey that found 33% of people would be willing to try CBD oil to ease anxiety, and 35% would consider using it for pain. The recent federal Farm Bill went a long way toward legalizing the production of CBD, and the U.S. Drug Enforcement Agency recently delisted CBD as a Schedule 1 drug (the most dangerous type), putting some forms in the same class as cough syrup.

These positive trends are balanced by the fact that there has been little research on the benefits or risks of CBD. And in some states and cities, selling CBD is illegal in whole or in part (e.g., for use in foods and beverages). This month, New York City said its health department would begin enforcing its ban on the use of CBD as a food additive in restaurants; baked goods, coffees, alcoholic beverages, and other foods containing the substance have been widely available.

Despite these caveats, one researcher, the Brightfield Group, predicts the market for CBD products will reach $20 billion in 2020 and $22 billion by 2022. That organization is one of the most optimistic of all the firms tracking the market. But the number of mainstream brands and retailers jumping on the bandwagon suggest many companies believe in the promise of this emerging category.

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