Introduction
Cannabinoids are still a mixed bag when it comes to the health and wellness industry. While many studies demonstrate an array of benefits from cannabinoids, few have emerged with a clear use case that can be used as a marketing claim on packaging.
This has led to inconsistency in consumer purchasing decisions, as the jury is still out on which cannabinoids help with a particular ailment. Yet one rare cannabinoid has bucked the trend, with sales data proving that it is revitalizing the cannabinoid health and wellness sector: Cannabinol (CBN). Once an obscure compound, CBN has rapidly emerged as a significant player in the market due to its effectiveness as an alternative sleep aid. This article explores the remarkable journey of CBN from obscurity to prominence and underscores why CPG decision-makers should pay close attention to this burgeoning trend.
CBN Timeline
2019 - First Sight
- 2019: CBN products were confined primarily to California's recreational cannabis market. Sunderstorm’s Kanha was the first to market with their product.
- Sales Figures: Total sales amounted to $1,705,850. Difficulty in procurement and high costs hindered adoption, and the general market didn’t know CBN existed.
2020 - FloraWorks Emerges
- 2020: FloraWorks brought the first commercial-scale CBN isolate manufacturing facility in Portland, Oregon. This milestone made CBN more accessible and affordable, paving the way for broader market adoption.
- Sales Growth: Retail sales of CBN climbed to $30,025,644, catching the attention of major brands, particularly because Kiva’s Camino Midnight 5:1 became the number one selling SKU in California.
- Notable Brands: Brands such as Wyld, Grön, and Plus launched THC ratio gummy products with a clear marketing strategy focused on sleep.
2021 - The Breakout Year
- 2021: By the end of the year, the market featured over 200 CBN products, generating nearly $130 million in retail revenue. CBN products became top sellers for many leading edible companies, including Wyld, Kiva, Sunderstorm, Incredibles, and Grön.
- Growth Metrics: Year-over-year growth was 328%. CBN captured 6.74% of the edible market.
2022 - Doubling Up
- 2022: The popularity of CBN products as an alternative sleep aid became undeniable, even though evidence of CBN efficacy as a sleep aid is largely anecdotal.
- Top Selling SKU: Wyld’s Elderberry 2:1 became the nation's best-selling edible SKU, with most major edible brands launching at least one CBN-infused product.
- Growth Metrics: Year-over-year growth was 57%. CBN captured 10% of the edible market.
2023 - The Science of Sleep
- 2023: FloraWorks completed the first double-blinded, placebo-controlled sleep study of CBN with Radicle Science, proving that CBN is efficacious for improving sleep. This breakthrough brings credibility to the existing marketing.
- Sales Growth: Sales continued to soar with an explosion of new SKUs as more recreational cannabis markets came online.
- Growth Metrics: Year-over-year growth was 34%. CBN captured 14.6% of the edible market. By the end of 2023, total retail sales in just 11 of the 23 markets hit $271 million.
Spotlight on Leading Brands and Their CBN Products
At the end of 2023, here is how the following brands ranked according to total sales revenue and their best-selling product:
The CBN Advantage: Why CPG Innovators Should Care
Market Impact
CBN market growth in recreational cannabis markets is one of the largest and fastest-growing segments in the entire industry. The inclusion of CBN products has significantly boosted the revenue and market presence of leading brands as well as leading hemp companies and emerging start-ups.
Unique Selling Proposition
- Alternative Sleep Aid: Consumers are seeking new botanical sleep aid options, and CBN has emerged as the go-to ingredient for hemp and cannabis consumers. CBN offers a unique effect that cannot be achieved with any other sleep aid on the market. Unlike melatonin, CBN does not disrupt your circadian rhythm and, unlike pharmaceutical sleep aids, CBN does not impair your cognitive functions.
- Consumer Demand: The sales data speaks for itself! In addition to the growing consumer preference for natural, plant-based wellness solutions, cannabinoids have long been utilized as a sleep aid. Over 35% of cannabis consumers cite sleep as a primary reason for purchasing cannabis products.
Market Opportunity
- Revenue Potential: The significant sales growth and market share expansion highlights the lucrative opportunities within the CBN segment. On the flip side, a lack of a CBN product in your portfolio could mean that you are losing customers to competitors who do offer a top-selling CBN product.
- Competitive Edge: Early adoption and innovation in CBN product development have provided a competitive advantage for leading edible companies. While that opportunity may no longer exist, a whole new opportunity has surfaced with the addition of TruCBN™ to the FloraWorks ingredient offering.
Strategic Considerations
- Product Development: Incorporating TruCBN™ into product lines will diversify offerings, meet the rising consumer demand for sleep aids, and give your brand the advantage of utilizing validated marketing claims on all of your TruCBN™ product marketing and packaging.
- Education and Awareness: Increasing consumer awareness about the benefits of CBN will be crucial for market penetration and growth. FloraWorks is leading the charge with our 1000-person double-blinded placebo-controlled study, toxicology studies, and even a pre-clinical study on effectiveness for brain health.
- Regulatory Compliance: FloraWorks is the leading manufacturer of CBN in the world, holding the highest tier of quality compliance standards, including: NSF, GMP, ISO9001:2015 certification. FloraWorks also has hemp licenses in CA, CO, MI, and OR to help you source compliant minor cannabinoids in whichever market you operate in.
Conclusion
The trajectory of CBN from an obscure cannabinoid to a mainstream wellness solution underscores its potential and importance in the market. For CEOs, COOs, Directors of Innovation, and other decision-makers within CPG companies, understanding and leveraging this trend is crucial. By incorporating CBN into their product lines, companies can tap into a growing market segment, cater to consumer demand for natural sleep aids, and achieve significant revenue growth.
Key Takeaways
- Exponential Growth: CBN sales increased from $1.7 million in 2019 to projected revenues in 2024 of over $350 million.
- Market Share: CBN-infused edibles are expected to capture 15% of the edible market share.
- Top Brands: Leading edible companies are seeing CBN products become their top sellers.
- Consumer Demand: The shift towards natural wellness solutions highlights CBN's potential as an alternative sleep aid.
- Strategic Opportunity: CPG companies have a unique opportunity to innovate and lead in the burgeoning CBN market.
By staying ahead of the curve and capitalizing on the CBN trend, CPG innovators can drive growth, satisfy consumer needs, and secure a competitive edge in the dynamic wellness landscape.
