Large Pricing Variation Continues to Fuel Consumer Confusion - CBD Validator

Large Pricing Variation Continues to Fuel Consumer Confusion

In February 2020, CBD Validator issued its first industry retail pricing report which analyzed retail pricing in over 1,500 CBD oils. The underlying conclusion was a huge price variation among similar products creating consumer mistrust and confusion. This latest report analyzed retail pricing in over 2,000 CBD oils. Unfortunately little was changed with regard to large price disparities among similar products.

Key Data Points

• The average cost per milligram of CBD across all products in the CBD Validator database is $0.18, a 2% decline from the average reported seven months prior, which most likely reflects a drop in the price of hemp due to oversupply.

• The seven most popular strengths of CBD oils and tinctures are 250 mg, 300 mg, 500 mg, 600 mg, 750 mg, 1000 mg and 1500 mg.

• The 500 and 1000 mg strengths of CBD sold in a one-ounce bottle account for almost 30% of all products reported in the CBD Validator database.

• An example of the pricing disparity is illustrated in analyzing the 1000 mg strength (Figure 1). The average MSRP for the 1000 mg strength sold is $93.20 but the range is quite significant, $30 for the least expensive and $214.99 for the most expensive, or a seven-fold difference. In fact ,across all strengths there, is on average, a 6-fold difference between the most and least expensive product.

Key Insights

Pricing disparities create consumer confusion and will continue to serve as an obstacle to growth and mainstream use of CBD. It must also be noted that there appears to be no relationship between premium pricing and quality manufacturing. Only 19% of the 1000 mg strength CBD oils in the CBD Validator database provide consumers with a certificate of analysis for CBD, pesticides and heavy metals from an independent testing laboratory.

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