About a third of CBD consumers say they will shift from brick-and-mortar stores to online to buy their products during the pandemic, according to Bethany Gomez, managing director of the Brightfield Group, a consumer research firm.
Forty-seven percent of CBD customers already had or planned to stock up on CBD and 37% of CBD customers planned to use CBD more frequently because of the COVID-19 pandemic, which means ongoing opportunities for more online sales, Gomez told Hemp Industry Daily webinar attendees in April.
Before the coronavirus pandemic, 85% or goods “were bought in a four-wall physical retail environment,” said Christopher Gavigan, founder and CEO of Prima, which sells CBD-infused topicals at Sephora stores.
The growth in cannabis sales appears to have brought some relief to cannabis stocks, which have been going through a rough period.
GD Entertainment & Technology, Inc. (OTC: GDET) recently provided shareholders with an update as the Company streamlines operations to focus the full scope of its operational and capital resources more narrowly to maximize long-term top and bottom line performance. The centerpiece of this focus will be online sales of CBD-based products primarily through TheGreeneryCo.com store.
Anil Idnani, CEO of GDET, commented, “After analyzing our business model, GDET has undertaken a substantial realignment in operational and strategic focus to maximize returns from our most promising segment: e-commerce primarily centered around CBD-based products through TheGreeneryCo.com store. This realignment has entailed a series of cost-saving and cash-generating actions that will help to support the growth of the online CBD business by creating and diverting resources that can now be directed toward driving sales growth and customer acquisition.”
The Company has already divested its cryptocurrency mining operations and equipment as well as all assets involved in its cryptocurrency ATM business. Proceeds from the sale of this equipment are being used to improve the Company’s balance sheet and fund future marketing activities designed to expand awareness of The Greenery brand and drive accelerating sales from CBD e-commerce operations.
In addition, the Company closed its physical CBD retail business, further reducing expected expenses to emphasize its highest-margin path to aggressive sales growth. Management notes that the online CBD model represents the long-term future of the Company going forward.
“We have already begun the process of exploring a range of options to drive expanding sales performance,” continued Idnani. “At this point, we are considering a number of strategies, including aggressive marketing investments as well as potential M&A moves designed to widen our end market footprint. We haven’t been this excited about the road ahead in a long time.”
Management notes that market conditions for CBD-based products continue to present a powerful opportunity. Brightfield Group research suggests that the overall CBD-related products market grew over 700% in 2019, pushed along by uptake and distribution from mainstream big-brand US retailers (such as Kroger’s, Walgreens, Walmart, Rite-Aid, and others) who began to carry CBD products in plain sight of browsing customers. This mainstreaming trend is expected to continue in the quarters and years ahead. According to research from MRFR, the global CBD market is estimated to register continued strong growth at a CAGR of 125% from 2019 to 2026.