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Why Is CBD Expensive?

September 29, 2022 5 min read

Why Is CBD Expensive?

Why Is CBD Expensive?

CBD is an expensive extract obtained from a cannabis plant – hemp. There are several factors leading to its higher costs, including challenges in hemp farming, challenges in extraction and refinement, the major investment required in the manufacturing process and high-quality control, limited marketing and distribution opportunity, lack of support from the financial institution, misconceptions regarding CBD prices, and subpar products.        

The high popularity of CBD spikes its demand and prices. According to Maroon et al. (2018), this active cannabinoid has several health benefits, and the cost tends to be the only disadvantage. Many folks think going for a cheaper CBD is a good idea, but that's where they go wrong. High-quality CBD is time-consuming and costly to produce. Because it's a new product, CBD prices tend to fluctuate after every short period. However, this does not mean that CBD will forever be expensive. Many industries are now producing cannabinoids, which will soon increase supply and competition and reduce market prices. There are several answers to the question of the reasons for the higher cost of CBD; here are some reasons:

Challenges in Growing Hemp

There are several challenges in growing hemp that many farmers haven't encountered before, especially for those who have recently shifted from food crops. Growing hemp needs total effort, commitment, and manual work. For example, when the crop produces more than the legalized hemp content (usually 0.3%), it must be destroyed as it's illegal. 

Harvesting is another problem. Hemp is often grown on a large scale. Therefore, you may need to combine a harvester and other relevant mechanization. These machines are expensive. The unavailability and costs of these machines pose another challenge, as hemp farmers will have no option but to harvest manually; the manual harvesting can be tedious and time-consuming.

After harvesting, your crop must undergo a drying process, which takes a large space and energy, thus increasing the cost.

Extraction and Refinement Can Be Quite Challenging

The extraction and refinement process is the next factor contributing to the high costs of CBD. The extraction would be as simple as squeezing oil from hemp seeds. Unfortunately, the process of extracting CBD is sophisticated, as the process requires expensive machines.CBD is extracted using two extraction methods:

  • Ethanol 
  • Supercritical carbon dioxide method

Both ethanol and CO2 methods deliver pure CBD when done correctly. Among the two methods, ethanol seems less expensive. The ethanol extraction method involves simpler processes than CO2

Manufacturers producing smaller batches prefer using the CO2 method as it extracts significant compounds from the cannabis plant (hemp) (Aladić et al., 2015). Additionally, the process tends to deliver a high-quality product. However, this extraction method is quite expensive and can lead to errors. 

According to Bowen al. (2021), CO2 and ethanol extraction methods deliver full-spectrum CBD, containing CBD, THC, and other natural compounds such as terpenes. Various companies use CBD form in manufacturing their products. 

Many users tend to avoid any trace of THC due to health concerns. Manufacturers will need to process the extract further to get broad-spectrum CBD. The extract is further refined to produce CBD isolate, significantly increasing the cost.

Manufacturing Practices Need Huge Investments

Major manufacturers often don't make CBD and market them right away. They usually conduct research and development, adhere to the current GMP (good manufacturing process), and create powerful hemp products by enacting strict quality control and testing; these contribute to the high costs of CBD. 

These processes need highly educated and experienced personnel, powerful equipment, and third-party testing and examination. Lack of such experienced people and equipment, manufacturers can face challenges in the manufacturing process. While manufacturing a product that needs to support wellness, there shouldn't be any shortcuts. Many manufacturers are imposing premium charges on consumers to adhere to these standards. 

Distributing and Marketing 

Small-scale distribution is another factor contributing to the high costs of CBD. Some retail outlets such as grocery, drug, and health supplement stores usually don't carry CBD products. This issue concerns regulatory problems, misconceptions regarding hemp, and villains in the hemp industry. 

In other words, many retailers consider CBD a potential liability. This issue hinders proper distribution; the purchasing power of large retail chains would lower distribution and transportation costs, which in turn, lowers prices for consumers. 

Various online platforms, such as Amazon, don't market CBD either. Most CBD products you'll find on amazon are not legit.

Additionally, marketers encounter limited opportunities. Reputable search engines, social platforms, and broadcasting networks have seriously limited CBD marketing, making it challenging for marketers to reach their audiences. As such, CBD manufacturers have no option but to rely on more labor-intensive channels to market their products, which can be another reason CBD is expensive. 

Financial Institutions Do Not Support CBD Companies

Despite the legalization of cannabis and its extracts across the US, financial institutions consider hemp risky. Many manufacturers find it challenging to get credit or payment processing. The credit processing industries that decide to work with the hemp industry may charge their services high, which is another reason CBD is expensive.  

Many People Often Misunderstand CBD Pricing

You are right to judge CBD product costs per-mg terms as higher concentrations are less costly per mg of CBD. However, many beginners tend to choose less concentration to start with CBD. This can lead to a long-term belief regarding CBD prices. 

Poor Quality and Fake Products Are Expensive by Nature

Some manufacturers promote their products deceivingly, making customers believe they're getting a significant amount of CBD at a fair price. When a 350,000 mg bottle of CBD gummy sold for $32.95 may sound enticing. However, you'll later realize you wasted your hard-earned cash on 60 gummy bears with no CBD. Some manufacturers make feeble products without considering quality control measures but still market them at high prices.  

The Bottom Line 

CBD is an active cannabinoid found in the cannabis plant. It delivers several health benefits, which raises its demand and prices. In general, CBD is expensive. Several factors lead to these high costs, including growing, harvesting, manufacturing, and promoting the product. The cannabis derivative may soon be available all over the market. Therefore, we hope prices will soon decline due to the increased competition. Similarly, as more awareness grows among consumers, misconception-related costs will significantly reduce.   

References

Bowen J K Chaparro J M McCorkle A M Palumbo E &Prenni J E (2021) The impact of extraction protocol on the chemical profile of cannabis extracts from a single cultivar. Scientific reports, 11(1), 1-10.

Aladić, K., Jarni, K., Barbir, T., Vidović, S., Vladić, J., Bilić, M., & Jokić, S. (2015).    Supercritical CO2 extraction of hemp (Cannabis sativa L.) seed oil. Industrial Crops     and Products, 76, 472-478.

Maroon J &Bost J (2018). Review of the neurological benefits of phytocannabinoids. Surgical neurology international, 9.