9 Reasons Why Is CBD So Expensive

Understanding CBD Market

The CBD market is booming due to the rising consumption of CBD. After the Hemp Farming Act of 2018, the global CBD consumer health market size reached US$18.21 billion in 2023. The rapidly rising awareness regarding the therapeutic benefits of CBD-infused products is one of the core reasons for increased demand.  

Many reputed health organizations have already stated that CBD is clinically proven and safe for short-term use. CBD products like CBD gummies, CBD Syrups, or CBD topicals (CBD balm, CBD body rub) are effective at treating many health conditions like body pain, insomnia, arthritis, and inflammation. 

The legalization of cannabis for the use of medical purposes is another prime growth factor of the CBD market. Countries like the U.S.A., Germany, Canada, Italy, and France have legalized medical cannabis. For this reason, the global CBD health market has skyrocketed and is expected to reach 62.41 billion dollars by 2032. 

Overall, this increased demand for CBD is constantly contributing to affecting the price of CBD products in the market. 

9 Reasons Why Is CBD So Expensive

There are a plethora of reasons behind the expensiveness of CBD products. Firstly, it’s a brand new market which is expanding fast. Besides, the supply vs. demand curve of CBD demonstrates a high demand and low supply.  

Here is a list of 9 reasons why is CBD so expensive: 

1.  Hemp is a challenging crop 

2.  Quality of CBD Products 

3.  Ingredients 

4.  Complex extraction method of cannabinoid 

5.  Third-party lab testing 

6.  Supply and demand curve 

7.  Small-Scale Distribution

8.  Regulatory compliance 

9.  Labor-intensive farming

#1: Hemp Is a Challenging Crop

Hemp is a challenging crop for growers and farmers due to the many agricultural challenges they experience. Cannabis farmers need to own the right machinery or hire enough skilled workers to grow hemp plants. Also, the harvesting process is difficult. It needs a large, sheltered setting that can provide optimal conditions. The total process is both costly and time-consuming. 

This is not the end. There are governmental regulations too. For instance, if the hemp plant produces more than 0.3 percent THC (the approved amount of THC), the farmers may have to destroy the plants. This rigorous process of producing hemp plants affects the price of hemp-derived CBD.

#2: Quality of CBD Products

The quality of CBD products indicates their purity and strength. If the CBD product you intend to buy is of higher quality, then naturally it will be expensive. The level of CBD concentration in the product, the THC, and other essential content can make the CBD price go up and down.

#3: Ingredients

You may have to pay a higher price for CBD due to the high-quality and non-synthetic ingredients it contains. The little regulation around CBD products can result in fake, and unsafe distribution of CBD products in the market.

That’s why, buying CBD at a high price may ensure that the CBD concentration, the type of CBD (Isolate, Full-spectrum, Broad-Spectrum), and THC content are trustworthy and reliable. The CBD seller who maintains good manufacturing practices (GMP) will provide genuine labeling of the products. 

#4: Complex Extraction Method of Cannabinoid

The complex cannabinoid extraction method also influences why is CBD so expensive. The process of cannabinoid extraction is quite sophisticated. It needs expensive and high-grade machines. It’s not as simple as extracting oil from the hemp flowers. 

The cannabinoid extraction process follows two primary methods: Ethanol extraction and supercritical carbon dioxide (CO2) extraction. Ethanol extraction is cheaper. A rotary evaporator, water chiller, and vacuum pump are required for the ethanol extraction method. 

On the other hand, super-critical CO2 extraction is wildly expensive. Manufacturers that utilize this method can extract a higher amount of cannabinoid compounds from hemp which results in high-quality CBD products. In essence, the price of CBD can also be influenced by the method of extraction chosen by manufacturers.

#5: Third-Party Lab Testing

Well-known CBD brands don’t just manufacture CBD products and sell them in the market. Every reputable brand sends its product to a third-party independent organization. That third-party lab tests their CBD products to determine what is in them. They look for things like CBD content, THC concentration, and other potentially dangerous substances.

When analyzing the products, these third-party laboratories stay objective. As this finding is, CBD customers can trust companies who provide third-party lab test results. Also, CBD companies must pay to get their products tested. This entire procedure explains why high-quality CBD products are so costly. 

#6: Supply and Demand Curve

The CBD manufacturers may experience a limited supply of high-quality hemp plants due to factors like weather conditions, regulations, and cultivation challenges. This limited supply may not meet the rising demand for beneficial cannabidiol (CBD) products. This scarcity of supplies can drive up the price of CBD products. In short, a low supply and high demand curve can put upward pressure on prices.

#7: Small Scale Distribution

CBD is still under inspection. Apart from its popularity, CBD sellers face difficulties in distributing the products. Besides, the giant online shop like Amazon forbids to sell CBD on their site. Still, you can find CBD products on Amazon. But the major concern is that most of the products on their site aren’t authentic. 

Furthermore, CBD sellers don’t get full exposure in the marketing world. They have a very limited marketing opportunity. The majority of social media sites, search engines, and TV advertising don’t allow CBD advertising. In many cases, they ban the promotional activities associated with CBD products. That is why CBD companies need to find other alternative methods of marketing. This situation further explains why CBD is so expensive in the market. 

#8: Regulatory Compliance

Among the important factors driving up the price of CBD is regulatory compliance. Everything from quality control and testing to fines for noncompliance can raise the price of CBD products. 

The following is a list of regulatory compliances that could impact the cost of CBD: 

•  Testing and Quality Assurance: To meet safety and quality standards, regulatory authorities often require CBD products to undergo rigorous testing. 

•  Labeling and Packaging Requirements: Manufacturers must invest in compliant packaging materials, design, and printing, which can increase the production cost of CBD. 

•  Compliance with THC Limits: Most of the states in the U.S.A. have strict limits on the allowable amount of Delta-9-Tetrahydrocannabinol (THC) in CBD products. To meet these specific limits, manufacturers require sophisticated equipment and processes that further increase the expenses. 

•  Registration and Licensing:  In some jurisdictions, CBD manufacturers and retailers must obtain licenses or permits that include fees and administrative costs. Read CBD Laws by state to learn more about the legal status of your state. 

•  Risk of Non-Compliance Penalties: Non-compliance with CBD regulations can lead to substantial fines, product recalls, or even legal actions. 

#9: Labor-Intensive Farming

High-labor costs, manual harvesting, and trimming, and seasonal variability can contribute to increasing the price of cannabidiol or CBD products. 

Here is a list of cultivation factors that can impact the cost of CBD production: 

•  Labor Intensive Process of Hemp Farming 

•  High Labor Cost 

•  Manual Harvesting and Trimming 

•  Quality Control 

•  Limited automation 

•  Seasonal outdoor cannabis cultivation 

All these factors can contribute to higher production costs that in the end impact the retail prices of CBD products.

Will The Price of CBD Go Down?

 In short, there is a possibility that the cost of CBD will decrease. The CBD industries will likely see more competition in the coming future. Growers will also streamline the hemp-growing process. 

For increased productivity, manufacturers might make use of more sophisticated technology, agricultural practices, and equipment. To put it briefly, innovations in cannabis cultivation and hemp farming may lower production costs and increase the affordability of CBD. 

Furthermore, changes in regulations may also result in lower costs for CBD. In the CBD sector, more advancements and research are required. If more reliable data regarding the holistic benefits of CBD is made available, regulations may become more favorable. It will cut CBD manufacturers' compliance costs, which may result in a drop in CBD prices. 

Frequently Asked Questions (FAQs)

 Here are some relevant queries related to our topic “Why is CBD so expensive”. We’ve answered these queries so that you can get valuable insight.

1. Why CBD oil is so expensive?

Answer: Hemp plants grown for commercial purposes require labor-intensive procedures. In addition, the expenses associated with quality assurance, extraction, and independent laboratory testing all contribute to the increase in CBD oil prices.

2. Why CBD edibles are costly?

Answer: CBD edibles are pricier due to the additional expenses involved in formulating, manufacturing, and testing these products to meet strict food safety standards.

3. Why is CBD pain cream so expensive?

Answer: CBD cream for pain can be expensive because of the cost of high-quality CBD extract, manufacturing processes, and marketing expenses. 

The Bottom Line: Why Is CBD So Expensive

The high cost of CBD is linked to various factors, such as the complex and labor-intensive extraction process, stringent quality control and testing requirements, limited supply of high-quality hemp, as well as the expenses associated with meeting regulatory standards and ensuring product safety. 

Despite the expense, most consumers prioritize CBD's potential benefits which makes it a valuable medicinal product. However, to get the best health benefits, make sure to purchase CBD from a reputed CBD shop or legal cannabis dispensary.

References: 

CBD Consumer Health Market Size To Hit USD 62.41 Bn By 2032. (n.d.-b). https://straitsresearch.com/report/cannabidiol-consumer-health-market#:~:text=The%20global%20cannabidiol%20(CBD)%20consumer,compound%20in%20cannabis%20(marijuana).

Leafwell. (2022, May 30). Seriously, Why Is CBD So Expensive? Leafwell; Leafwell. https://leafwell.com/blog/why-is-cbd-so-expensive

FDA Regulation of Cannabis and Cannabis-Derived Products, Including Cannabidiol (CBD) | FDA. (n.d.). U.S. Food and Drug Administration; FDA. https://www.fda.gov/news-events/public-health-focus/fda-regulation-cannabis-and-cannabis-derived-products-including-cannabidiol-cbd