Insights

Amazon & CBD: A Prediction for 2020

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Followers of the CBD category have seen Amazon on the outside looking in on a growing opportunity estimated to reach to $20B in five years.

Amazon prohibits the sale of CBD products in its selling policies, but that doesn’t mean CBD isn’t being sold on Amazon. Several investigations have revealed that some sellers use workarounds — like leaving out any mention of CBD in the product label and Amazon content. Obviously, these workarounds are prohibited by Amazon and don’t follow retail best practices, but big changes may be on the horizon that would ease the way for CBD on the marketplace.

There seems to be momentum building in government regulation that could foreshadow changes in Amazon policies. Last month, a bipartisan bill was introduced in the U.S. House of Representatives that would allow hemp-derived cannabidiol (CBD) to be regulated as a dietary supplement, which would allow CBD to be marketed in food, beverages, and nutritional supplements. And in September, Amazon’s Whole Foods announced a rollout of topical CBD products at more than 300 stores.

Amazon would have an advantage in releasing its own private-label CBD brand. Looking at it from a perspective of meeting an underserved market, there’s no better niche for Amazon to fill than one that has tons of public visibility and no brands on the marketplace.

 

Our Prediction

Amazon will kickstart the CBD category with its own pace-setting private label CBD product. Changes in government regulation of CBD will provide Amazon with the flexibility it needs to legally sell CBD.
 

Predictions from our Colleagues

 

I don’t believe Amazon will launch a CBD brand this year because so far its focus has been on categories like electronics and clothing, and I don’t foresee that changing.

Juozas Kaziukėnas, Marketplace Pulse

 

Amazon’s interested in creating private label products in whatever categories consumers want, particularly when there are assortment gaps in its marketplace. With the growing popularity of CBD, I’d expect Amazon to pursue outside sellers in addition to creating a private label offering so long as they can get comfortable with the murkiness of federal, state and local regulations.

Russ Dieringer, Cleveland Research Company

 

What are your predictions for CBD on Amazon in 2020? Share on LinkedIn and let us know.