opportunities but also threats

Impressive retail outlets, a rehabilitated image, competitive material costs… but a difficult legal status quo and intensifying competition. Cannabidiol, a non-psychotropic substance extracted from cultivated hemp, develops in a very specific macro environment. Decoding…

The French CBD Market Collects Good Points

Entrepreneurs and other project managers who wish to enter the CBD as retail, semi-wholesale or wholesalers will benefit from a relatively favorable macro environment.

#1 Opportunities abound

There are more than 7 million regular or occasional users of cannabidiol products in France. In any case, this follows from the latest report of Interprofession of Hemp Trades (Interchanvre), the data of which was transmitted by very serious media LSA Conso. The possibilities are impressive and should continue to grow as the image of cannabidiol is rehabilitated… which brings us to our next point.

#2 CBD gets rid of received ideas

As scientific research yields its results, the image of cannabidiol is gradually being restored. Indeed, the emphasis on its anti-inflammatory, analgesic, and relaxing properties has greatly contributed to raising awareness among the general public. To quote also the statement of the Scientific Committee of the World Health Organization (WHO), which explains that CBD ” non-addictive and not harmful to health “.

The emergence on the market of national brands with significant trust capital is also contributing to this rehabilitation. Carrefour has indeed signed partnerships with French brands offering CBD products, and Monoprix has opened 250 CBD locations across France. The brand is also increasing the number of communication campaigns around its range. He recently distributed a truckload of CBD in the capital and Île-de-France to reassure consumers of the absence of any psychotropic effects or addiction.

In the United States, cannabidiol benefits from highly influential “VRPs”, especially among top athletes. Among them are Megan Rapino, Mike Tyson, John Isner and Alex Morgan. The world of professional sports is also opening sponsorship doors for major brands of CBD products. This is, for example, the case of the UFC.

#3 Material cost is relatively competitive

France concentrates 60% of the production of cultivated hemp, the raw material from which cannabidiol is extracted. This observation is reflected in the material’s availability all year round, as well as its relatively competitive cost. In this way, wholesalers, semi-wholesalers and retailers can securely receive shipments and offer attractive selling prices. This is an important point, because choosing a CBD wholesaler will be critical to the success of your business.

#4 Producers have successfully diversified their supply

There was a time when cannabidiol was presented exclusively in the form of leaves or flowers, the packaging of which was not very “playful”. Today, retailers can offer massage oils, e-liquids, chewing gum, cookies, dark chocolate, cannabidiol-based teas, and energy drinks, increasing their average shopping cart. They can also open up new customer segments and improve their commercial performance.

Investing in the CBD: the legal status quo and the intensity of competition

Entrepreneurs wishing to invest in CBD must be aware of the threats that could undermine their project.

#1 Legal Uncertainty, Sword of Damocles

On December 31, 2021, a ministerial decree disrupted the already volatile CBD market. The brief press release did indeed ban pure CBD flowers and leaves, drawing the ire of professionals. This decision will be temporarily suspended in a few days by the State Council. Today, the status quo prevails, pending the final decision of the State Council.

#2 Reluctance of banks

This legal uncertainty makes it difficult to finance CBD projects, as banks are especially reluctant to disburse funds in a perfectly legal market. Therefore, project managers must turn to foreign banks to finance their project.

#3 Intensity of Competition

The number of stores specializing in CBD products has increased from 400 in 2020 to over 2,500 in 2022, an increase of over 600%. Admittedly, the market is far from saturated, but competition is intensifying, especially with the emergence of big names in mass distribution such as Carrefour and Monoprix.