Why Is CBD So Expensive?

Why Is CBD So Expensive?

Nov 23rd 2021

Many people switch to CBD products for targeted relief and healthier skin. You might have noticed that CBD oils and body lotions have a high price tag. From farm to retail, producers face multiple challenges that cost them money.

Why is CBD so expensive? Here are some reasons behind it.

Supply and Demand

In 2018, the Farm Bill legalized the regulated production of hemp along with hemp-derived CBD. As a result, more people could buy CBD products as long as they contain less than .3% THC. Of course, the laws and regulations are still changing. Since the bill passed, the demand has increased.

Roughly 33% of consumers in the United States have tried CBD at least once. The percentage will increase in the future as the market continues to grow. CBD sales are rising due to its effectiveness. Experts expect sales to reach $19.5 billion by 2025 in the beauty, health, and other industries.

On the supply side, farmers may struggle to meet the increasing demand for CBD. For instance, growing hemp takes weeks and the process can be inefficient. Producers face various challenges in manufacturing and retail as well. Consumers should not be surprised to see that quality CBD is more expensive.

Challenges With Growing Hemp

The process starts with growing hemp from seeds. Farmers have to monitor the growing conditions throughout a hemp plant's life cycle, which takes months.

Hemp can be difficult to grow, which contributes to the price of CBD products. Farmers go through a trial-and-error process, especially for new crops. A grower has to adjust to the environment and determine what techniques work best. Farmers learn to look for signs of various issues. The process is always getting refined.

Then, farmers have to include equipment costs. Tools include artificial lights, soil, proper ventilation, and humidifiers. Some people use a combine harvester, which can be expensive to buy.

Heavy taxation contributes to CBD prices. Hemp is subject to more taxes compared to other products. A state can get tens of millions of dollars in hemp cultivation taxes. Some states have other taxes applied to CBD.

A grower has to comply with regulations as well. Farmers have to apply to the USDA for licenses to grow and process hemp, which can cost thousands of dollars in fees.

USDA inspections determine the levels of THC in the crops. If the THC level is too high, the whole crop must be destroyed. Climate, weather conditions, soil, and harvesting times can cause THC levels to spike. Lost hemp factors into the final price of CBD. Not every crop has below .3% THC, so farmers spend time and money for testing. A third-party lab ensures hemp meets the requirements and issues a Certificate of Analysis (COA).

Laws may change, and farmers need to keep up with them. They could lose their license and face criminal liability. So, most farmers pay for expert legal advice.

Challenges With Manufacturing CBD

A good manufacturing process can be expensive. In a nutshell, the process is about isolating the CBD from the plant to create an extract. Errors can happen, such as contaminants getting into the CBD.

A common obstacle is expensive equipment. A solvent-based method is popular in the hemp industry. Some companies use vegetable oils, and others use ethanol. Ethanol is less toxic, but the machines used, cost thousands of dollars.

Some processors prefer carbon dioxide instead. A CO2 extraction machine uses CO2, pressure, and temperature to isolate and separate CBD from the plant materials. The machine's costs can depend on the automation and how big the operation is.

Testing becomes another obstacle after extracting CBD. Extractors have to send a batch to the lab to ensure the batch is safe and free from contaminants like heavy metals, pesticides, residual solvents, and mycotoxins. If they fail to pass, they may have to get rid of the oil.

Another challenge is hiring workers who know how to process CBD. This production step is highly sophisticated, and a worker should know how to calibrate and use the machine. High-skilled workers tend to get paid more. The CO2 method can be explosive, so the right labor is crucial.

Challenges With Selling CBD

In retail, dosing CBD is not always simple. Producers usually heavily calculate the amount. They may have to repeat the process since complex errors can occur. The results might show more or less CBD than there is.

The producers need to send the final product to a reputable lab for a COA. The reason is that you will want to know the final potency and potential presence of contaminants. Accurate results are expensive.

The FDA, USDA, and states regulate retail CBD. Items have to meet FDA requirements, and CBD is allowed in cosmetics but not food or drugs. While .3% THC is legal, a few states prohibit THC in products.

Shipping CBD can be challenging, especially in places that prohibit THC. Strict laws can mean the confiscation of batches. Many states mandate people to buy a business license to sell CBD products. Some require distributors to have a resale license. These laws change over time, so companies have to stay compliant.

The CBD industry is a high-risk one. A few banks and payment processors, like Chase and PayWize, allow these transactions. However, some have high processing fees. Processing rates can depend on the type of transaction, such as online or in-person.

Marketplace struggles also contribute to prices since companies cannot advertise on Google or social media. Amazon also does not allow CBD sales. Some companies get around this by labeling CBD as "hemp extract." Others stick to their websites and in-person stores.

What to Avoid in Other CBD Products

You need to watch out for companies that cut corners. Some do in-house tests and do not release all of their information. A lack of COA could mean low potency, heavy metals, or pesticides.

A producer might incorrectly calculate the dosage. The FDA found that multiple products contained less than 80% of the amount of CBD labeled. A company could cut corners by not using clean ingredients. The product might be unsuited for the environment or your body. It also is not environmentally friendly if it heavily uses plastic.

Other businesses promote hemp seed oil as CBD. The two are not the same, and you can know if there is CBD by looking at the ingredients label. A product should list cannabidiol or cannabis sativa extract as its ingredient.

Watch out for outrageous or fraudulent medical claims. Many companies say their CBD products treat ailments and diseases. The FDA has taken action for claims of treating arthritis, blood pressure, depression, cancer, and diabetes.

To ensure you get a quality CBD product, search for the amount and type of CBD on the label. The kinds include full- and broad-spectrum. The label should also list the batch number, expiration date, and company information.

ARVOR's CBD Body Lotion

If you are looking for something new, ARVOR's CBD body lotion can help soothe and target issues. It contains 2,000 mg of CBD, and it is full of antioxidants. Other active ingredients include prickly pear seed oil, pomegranate seed oil, shea butter, aloe vera, and cloudberry.

Our products are vegan and use recyclable glass containers. Not only is our CBD lotion sustainable, but we plant one tree for every jar sold. You do not need to worry about contaminants. Our body lotion has a COA, and we post the lab results.

Nourish your skin with our full-spectrum CBD body lotion today. Contact us to learn more.