CBD oil is sneaking its way into snacks, drinks, beauty products, even dog food. And understandably so—who wouldn't want to sleep soundly, reduce chronic pain, and feel more relaxed? However, there's one key complaint we hear time and again regarding CBD products: the price. Why does CBD oil cost so much? It's because CBD is an incredibly expensive supplement to produce. Here's why.
Why Is CBD So Expensive? Plus, How to Be Sure You’re Buying From a Safe Supplier
And if you’re wondering whether the price of CBD oil will drop, you’re in luck.
With more than a decade of experience writing and editing food and nutritional content, Betty Gold is the former senior digital food editor at Real Simple and acting senior food editor at Well+Good. Betty has also spent time working in product analysis at Good Housekeeping and in food production on The Martha Stewart Show. Highlights: * Bachelor of Science in Food Studies & Nutrition from New York University * Industry professional for 11 years * Served on mastheads at Food Network, Bon Appetit, and Good Housekeeping Magazines * Worked in publications department at James Beard Foundation
CBD oil is the most popular ingredient on the block this year. If this is news to you, let’s quickly clear up what it is: CBD is one of the many naturally occurring chemical compounds present in the flowers and leaves of cannabis plants, found in both marijuana and industrial hemp. Unlike THC (the psychoactive element of cannabis), CBD cannot get you high, no matter how much you take.
What’s drawing both consumers and product manufacturers to CBD oil are its highly promising purported health benefits, from reduced anxiety to help with nausea, inflammation, and insomnia. And though we still need more comprehensive research on the effectiveness of CBD oil, the World Health Organization has reported that “CBD exhibits no effects indicative of any abuse or dependence potential…there is no evidence of public health related problems associated with the use of pure CBD.”
Thanks to all of the above, CBD is sneaking its way into snacks, drinks, beauty products, even dog food. And understandably so—who wouldn’t want to sleep soundly, reduce chronic pain, and feel more relaxed? However, there’s one key complaint we hear time and again regarding CBD products: the price.
You’ll see a range of price points in the CBD market, of course, but many of them cost upwards of $50 to $100 for a small-sized vial (typically one fluid ounce) of CBD oil or a box of CBD gummy bears. In an effort to understand why—and to find out if and when this crazy cost might lower—we checked in with Brian J. Baum, the President & CEO of CBD giant CANNOVIA.
So, why is CBD so expensive?
According to Baum, there are several factors driving the price of CBD. The most significant is the limited supply vs. the overwhelming demand.
“On the supply side, the imbalance is due to the fact that hemp farming was generally illegal prior to the passage of the Farm Bill of 2018 (Agricultural Improvement Act of 2018), signed into law on December 20, 2018,” he says. Prior to that, hemp farming was only permitted in several states and mainly for research purposes. The Farm bill authorized the farming of “industrial hemp,” that is, hemp with less than 0.3 percent THC (the psychoactive element of cannabis).
Given the reality that hemp is a “crop,” we are just now in the first full growing season for new crops. “This first season is limited due to the lack of defined hemp farming guidelines issued by the USDA. Each state must then either implement the federal guidelines or develop their own plan for regulating hemp farming,” Baum explains.
On the demand side, consumers are increasingly looking for natural treatments for supporting health and wellness. A product that the National Library of Medicine reports was first used for therapeutic benefit in 400 AD, that has never been associated with overdose or death, certainly appeals to this consumer interest.
Will the price of CBD come down over time?
Good news: “The cost of CBD will absolutely drop over time,” says Baum. One of the main drivers for legalizing hemp farming was the potential for farmers to have a new cash crop to replace tobacco. As a result of hemp legalization, the transition to hemp is occurring in states across the country. “We will see the first full yield of a hemp crop in 2020 in states that have implemented farming regulations,” he says.
Another factor driving the cost of CBD is the extraction process. Currently, the extraction of CBD crude from hemp biomass is a bottleneck in the production cycle. There are a limited number of processors equipped to extract hemp biomass. The shortage of processors and the actual cost of extraction is keeping the cost of extraction high. The laws of supply and demand are quickly rebalancing this function as well. Many new extraction providers are coming in to the market, and innovations in the extraction process are already on the horizon which will drive down extraction costs.
“Within the next two to three years we should begin to see the CBD market supply and demand come into balance and result in lower priced CBD products,” Baum says.
How can we tell if we’re overpaying or underpaying for CBD?
There are many great CBD products on the market today. But according to Baum, there are also many products that are substandard for a variety of reasons:
1. Some products imply CBD content. Certain online retailers are notorious for misrepresenting products in the CBD market. Amazon, for instance, does not allow the sale of CBD products, but a search for CBD at Amazon will present numerous “hemp seed oil” products which have no CBD. When it comes to CBD, everyone should be cautious and do their research before buying online.
2. Some products contain quality CBD but their concentrations are so low that they offer no therapeutic benefit. “For example, a 30 milliliter (1 ounce) full-spectrum CBD tincture listed with 50 milligrams of CBD. An average dose of 0.75 milliliters would contain about 1.1 milligrams of CBD. At that level, consumers would not see any CBD benefits.”
3. Inferior CBD is an issue. Given the shortage of domestically produced CBD, much of the CBD in the US has been sourced from overseas markets, such as China. Hemp is a bio accumulator, meaning it absorbs everything in the soil in which it is planted. If the soil is not properly tested, soil contamination from prior crops is quite likely. This could include herbicides, pesticides and metals.
How can we assess the value of CBD products?
One of the best methods of evaluating the quality of a CBD product is the “Certificate of Analysis” (COA). Any reputable CBD source should readily supply the consumer with a certificate of analysis. The COA will provide test results of the actual of the CBD used in a given product. These lab results will provide the concentrations of CBD in the product.
Why Is CBD Oil So Expensive?
If you’re a regular user of CBD oil, you’re well aware of the fact that CBD isn’t exactly the most affordable supplement on the market. A box of supplements from the local health food store has never been cheap, but with some bottles of concentrated CBD oil costing upwards of $100 or more, CBD is truly in a class by itself.
There are plenty of ways to save money on CBD. The first way is by buying it right here at VapeJuice.com, because we’re committed to introducing the vaping community to this great herbal supplement by offering it for the lowest prices possible. The second way is by buying the strongest CBD oil you can afford. The more total milligrams of CBD that there are in the bottle, the less you’ll pay per milligram.
Those pieces of advice, however, don’t address the primary question that brought you here. Why is CBD oil so expensive? As it turns out, there are a great many steps involved in making a high-quality CBD oil product. CBD is very cost intensive, both in terms of labor and in terms of the equipment and raw materials required to make the product. Although consumers have been very fortunate in that CBD has become less expensive in recent years, there’s a limit to how far the price cuts can go before CBD is no longer profitable to produce.
To understand why that’s the case, you need to know more about how CBD oil is made. So, why does CBD cost so much? Let’s find out.
CBD Hemp Is One of the Most Expensive Cash Crops
Before a processing company can extract CBD from hemp, it needs to buy the hemp – and hemp flowers with high CBD content are extremely expensive. As of 2020, a report from the University of Connecticut suggests that hemp processors spend an average of $24,375 per acre when buying hemp flower – so before a hemp processor can obtain enough CBD for a substantial production run, it’s necessary to spend tens of thousands of dollars – perhaps hundreds of thousands – on the raw plant materials.
There’s little room for the price of CBD hemp flower to decrease because it’s also an extremely expensive crop to cultivate. According to the report cited above, CBD hemp costs an average of $19,289 per acre to grow. That leaves the farmer with an average profit of just $5,086 per acre. Although it’s certainly possible for farmers to cut their prices a little, they won’t want to sacrifice their profits after investing many thousands of dollars. For any company that wants to enter the CBD industry, the raw plant material represents one of the biggest investments. It’s very expensive, and there’s no way to produce CBD oil without it.
CBD Oil Extraction Requires Costly Equipment
Once a hemp processor has secured the hemp biomass necessary for producing CBD oil, the work has only just begun. The next step is to extract the essential oil from the plant material – and that requires yet another enormous investment. To produce hemp distillate, the processor needs to grind the hemp flowers and combine them with a solvent that breaks up the hemp’s cell walls and causes it to release its oils.
It’s possible to extract the cannabinoids and terpenes from hemp using an inexpensive solvent like ethanol or butane. The challenge of hemp extraction, though, is that people don’t want to use CBD oil containing residual solvents. They want their CBD oil to be as pure and untainted as the original plant. Solvent-based extraction simply won’t work because it’s nearly impossible to completely remove all residual solvents from the final product.
Consumers want solvent-free CBD oil – and as it turns out, there’s a way to make that happen. Unfortunately, though, it’s also very expensive. The answer is supercritical extraction, which uses carbon dioxide as a solvent. Since carbon dioxide isn’t a chemical solvent, it’s a harmless way to obtain hemp distillate. It also evaporates completely after the extraction process, leaving no trace in the final product.
As you’ve probably guessed, though, supercritical CBD extraction does have a catch: The equipment required to perform the extraction is extremely expensive. A single CO2 extraction machine costs somewhere in the neighborhood of $100,000, and the amount of hemp that you can process with just one machine is quite limited. Major hemp processors have multiple CO2 extraction machines running simultaneously, so they’re trying recoup investments of hundreds of thousands of dollars – and that’s before factoring in the cost of the hemp itself.
Post-Processing Adds to the Production Cost of CBD Oil
Hemp distillate isn’t a finished product – it’s just a raw ingredient, and you wouldn’t want to use it directly out of the extraction machine. That’s partially because it’s far too potent and partially because raw hemp extract tastes horrible. At minimum, the hemp processor needs to blend the extract with a carrier oil such as hemp oil or MCT oil in order to make a usable product.
Although it’s possible to make a viable CBD oil product by simply blending a CBD extract with a carrier oil, most hemp processors don’t do that because hemp extract has some undesirable compounds that can negatively impact flavor quality. Those compounds include chlorophyll and plant waxes, which can make the resulting CBD oil taste bitter and affect its mouth feel. The typical way to remove those compounds is by winterizing the hemp extract, which involves mixing it with alcohol and freezing it. The undesirable compounds float to the top of the alcohol and freeze for easy removal. Winterization adds to the expense of producing CBD oil – and for many CBD oil products, the post-processing expenses don’t end there.
Some Consumers Prefer to Buy THC-Free CBD Oil
A full-spectrum hemp extract contains all of the cannabinoids and terpenes found in the original plant. Although that’ll obviously mean that the extract will contain plenty of CBD, it may also contain trace amounts of another cannabinoid that some people consider undesirable: THC. Although CBD won’t get you high, some people prefer to avoid consuming THC even in trace amounts due to the slight possibility of failing a drug test.
It is possible to selectively remove cannabinoids from hemp extract, and the method for doing that is called fractional distillation. This process involves heating the hemp extract to the temperature at which the unwanted cannabinoid turns to vapor. The vaporized cannabinoid is removed from the extract, and it can be collected separately and used for another purpose.
Every post-processing step adds to the cost of CBD oil – and for some consumers, even selective removal of the THC isn’t enough. Some people want to buy CBD oil containing only CBD and absolutely no traces of any other cannabinoid. For those people, hemp processors subject hemp distillate to the ultimate form of purification by combining the distillate with a solvent that causes the CBD to crystallize for separate collection. CBD oil made from CBD isolate contains no detectable cannabinoids except CBD.
Other Types of CBD Products Require Additional Processing and Production Lines
There are many different types of CBD products, and CBD oil is just one of them. When you look at the CBD section here at VapeJuice.com, you’ll see a wide sampling of what’s available. There are CBD capsules, CBD gummies, CBD lotions, CBD rollers – and that’s just the beginning.
In the previous subsection of this article, we explained the process of producing CBD isolate. CBD isolate is expensive to produce, but it’s not just used for CBD oil; it’s also used for many other types of CBD products because it’s extremely pure and mixes easily with any oil. Making different types of CBD products, however, greatly increases the scope and expense of running a hemp processing company. Suddenly, it’s not just a matter of having one production line for CBD oil. Producing multiple types of CBD products means having the necessary equipment and production lines for all of those products. While producing CBD oil from scratch requires an investment of potentially hundreds of thousands of dollars, producing a full range of CBD products can easily cost millions of dollars.
Consumers Demand Lab-Tested CBD Products
From reading this article, we hope you’ve gained a better understanding of why CBD oil costs as much as it does. The price of CBD oil has dropped rapidly over the past couple of years, and that’s a great thing for consumers. Given the reality of how expensive it is to produce top-quality CBD oil, though, it’s unlikely that prices can drop much further from where they already are. That’s simply the reality of producing a top-quality supplement from a plant that’s expensive to grow and even more costly to process.
By the way, when a CBD brand finishes creating its product range, the work still isn’t done. From hemp growing to extraction and processing, there are many steps – and many people – involved in the creation of a CBD product. It’s very rare for a CBD brand to have full control over all of those steps, and that means there are going to be outside partners somewhere in the supply chain.
Whether a CBD brand works with outside suppliers or not, though, it is crucially important to be absolutely certain of what’s in the finished product. That’s why every good CBD brand sends samples of each product batch to an outside laboratory for testing. Third-party labs test CBD products for their cannabinoid and terpene content, and they also verify that CBD products contain no undesirable contaminants such as solvents, pesticides, molds and heavy metals.
Laboratory testing is extremely expensive, and it’s a process that’s never truly done because it has to be repeated with each new product batch. Although that does add to the cost of CBD oil, we think the added cost is very worthwhile because nothing is more important than knowing exactly what’s in the bottle.