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9 Reasons Why CBD Is So Expensive

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9 Reasons Why CBD Is So Expensive

If you’ve sought relief from health issues ranging from anxiety to pain to insomnia, it’s likely you’ve heard of CBD in some form (whether it’s CBD oil, CBD cream, CBD topicals, or CBD gummies) as a potential therapy.

This versatile cannabinoid has been making waves in the past few years for its healing properties and ability to produce a calm sense of well-being.

Although you’d expect a product that is so versatile not to come cheap, sometimes the price for a little bottle of CBD oil can raise an eyebrow if not trigger outright sticker shock.

Before you dismiss CBD oil as too expensive, let’s look at some of the reasons why CBD oil is so expensive and put the price in perspective.

Once you know a little more about how CBD is made, from growing to processing to bottling, you may have a different view of its value, both in terms of dollars and in terms of its impact on your health and well-being.

So, let’s get into it. Why is CBD oil so expensive?

1. CBD is a new industry

Looking back just five or ten years, cannabis was still considered a shady substance and was only grown in surreptitious ways outside the bounds of law.

The big shift finally came with the passing of the 2018 Farm Bill, which recategorized industrial hemp (the plant from which CBD is extracted) from a Schedule 1 drug to a legitimate agricultural product, like corn or soybeans.

Given this recent change, farmers have only had a few years to develop and hone their hemp farming skills. And the early stages of any endeavor are the ones that typically require the most investment. New equipment has to be bought. New processes have to be established. Laborers have to be trained in how to collect the harvest. All of this costs money, and those expenses are reflected in the final product.

2. Growing hemp is labor intensive

To dive a bit deeper into the issue of hemp growing, many farmers who have shifted their focus from fruit and vegetable crops to hemp are finding that growing hemp is a highly finicky process.

Although the cannabis plant (and some of its products) go by the name of “weed,” the plant certainly doesn’t grow as freely and easily as one. Hemp requires a high level of care and inspection, has to be grown under very strict conditions, and is subject to a lot of trial and error.

For example, there is a legal limit that defines how much THC a hemp plant can contain. If the plant ends up exceeding that limit, the crop is unusable and unsellable. In order to avoid the significant financial hit that losing an entire crop would pose, farmers have to devote resources to carefully monitoring the growth of their hemp crops to ensure that they will be viable.

The challenges don’t stop there. Harvesting is also a labor intensive process. Even though hemp can be harvested with a piece of farm equipment known as a combine, these machines are so expensive that most farmers don’t own their own combine (with the exception of grain farmers, for whom the cost is justified). As a result, hemp plants often end up being harvested manually, which is time-consuming. 

After harvesting comes drying, which also requires specific conditions—namely, large spaces with appropriate cover from the elements.  

When you consider all of the time, effort, and skill that goes into growing hemp, the price of CBD oil starts to make a bit more sense.

3. CBD has to be extracted and refined

What you get in a bottle of CBD oil is a highly refined product. Remember, CBD is one of many compounds found in hemp, and extracting it into a CBD concentrate is another delicate process that requires specialized skill and equipment.

CBD extraction is typically performed in one of two ways: using ethanol or supercritical carbon dioxide (CO2). Ethanol is the more affordable approach and is highly scalable. CO2 extraction is more expensive but produces a high quality CBD oil, which is why many small-batch CBD vendors, whose emphasis is on quality, purity, and potency rather than volume, opt for this method. They then have to price their products accordingly, and this helps explain why some bottles of CBD sell for $35 and others sell for $350.

Now, this is a good time to draw a distinction between full-spectrum hemp extracts and CBD isolates.

Both the ethanol and CO2 extraction methods described above produce full-spectrum hemp extract and those extracts contain several compounds above and beyond CBD: THC, essential oils, terpenes, and minor cannabinoids.  

However, some consumers want the CBD only, without any of that other stuff, specifically THC, which produces a psychoactive “high” effect. Creating a THC-free product requires additional processing to remove the other compounds, resulting in a “pure CBD” or CBD isolate. Each additional step in the production process incurs additional expenses, driving up the price of the final product.

4. Demand currently outstrips supply

One of the main selling points of CBD oil is how versatile it is, offering an impressive variety of benefits for a wide range of health issues, such as:

  • Chronic pain
  • Anxiety and depression
  • PTSD
  • Insomnia and other sleep issues
  • Nausea
  • Irritable bowel syndrome
  • Fatigue

Plus, the risks associated with CBD oil are virtually nonexistent. It has never been linked to overdose or death.

Because it offers so much to so many people and without the risks and side effects that other treatments can sometimes carry, demand for CBD oil is extremely high. And given how difficult it is to grow, and how new the industry is, supply simply can’t keep up at the moment. In economic terms, this always tips the scale in favor of higher prices until supply can catch up to demand.

5. Stigma is still attached to the industry

It’s an interesting paradox that despite the widespread consumer interest in CBD oil, there is still a lot of hesitation on the part of financial institutions and distributors to support this growing industry.

Financial institutions and services by their very nature take a cautious approach to investments, particularly ones considered risky. Because of this, new CBD brands have been surprised to find that they have difficulty securing credit and payment processing options from banks and financial services providers who are wary of entering the cannabis arena. When they do decide to work with CBD brands, they often charge a higher rate for their services to off-set the perceived risk. In turn, CBD producers have to charge more for their products.

Another factor at play is that because of the stigma still surrounding CBD and cannabis (it’s not so long ago that it was widely viewed as a dangerous “street drug”), many big-name stores and retail outlets do not wish to carry these products, out of a fear of backlash from their customer base. This limits distribution and profit-making potential for CBD oil manufacturers, preventing them from benefiting from the reduced shipping and distribution costs that come with selling through a large retailer with significant buying power.

6. Quality products are expensive to develop

Dedicated CBD manufacturers are often driven by an ethical mission that is just as important to them as their business mission. They believe in the power and value of quality CBD, and so their focus isn’t on producing large quantities of products as cheaply as possible. They invest in research and development, take care to adhere to all regulatory guidelines, and apply the strictest quality control to their CBD products. All of this has an impact on CBD oil price.

What’s more, the people who perform the research, run the tests, check the product, and prepare it for distribution are all highly skilled workers who have years of experience and training under their belts. The equipment they rely on is also sophisticated and therefore expensive.

7. The price on the bottle needs to be put into perspective

It’s important to remember that when you’re buying a quality CBD product, whether it’s CBD oil, CBD gummies, or a CBD tincture, you’re buying a quantity of doses of CBD. So you have to think in terms of milligrams and how much each dose of CBD works out to. Doing this simple calculation often brings the price of CBD into sharper (and more palatable) perspective.  

For example, a 300 mg bottle of CBD oil that costs about $30 ends up working out to about ten cents per 1 mg dose of CBD. When you compare that to many pharmaceutical drugs, it’s far cheaper than a lot of medicines on the market.

Then there’s the matter of concentration. When you buy a higher concentrate CBD oil, you tend to use it in lower doses, so the bottle lasts longer and each mg works out to be a lower price. Having this information on dosage can make all the difference in understanding what you’re really paying for and really getting when you buy a bottle of CBD oil that seems expensive.

8. Disreputable CBD sellers skew expectations

Like every industry, the CBD market has its bad actors. They don’t put the time, effort, and money into developing quality products and they price their offerings in a way that makes reputable CBD brands seem as if they’re overcharging for their product.

Online marketplaces are a prime way to see this dynamic at work. If you search for CBD gummies, you’ll probably be able to find many results that offer gigantic quantities at insanely low prices. What you don’t see, however, is that those products aren’t lab-tested and likely don’t contain the purported amounts of hemp extract, if they contain any at all.  

On the other hand, you also have bad actors who create subpar products and then go right ahead and sell them at premium prices. The users of these products don’t experience any beneficial health outcomes (since they haven’t actually ingested any quality CBD) and dismiss the entire CBD market as a hoax or a scam.  

These disreputable vendors skew expectations and create confusion about what the real price and value of CBD products are.

9. Reliable CBD products are lab-tested

One surefire way to avoid getting duped by an unreliable vendor is to look for products that are lab-tested by a third party. Trustworthy CBD brands go to the trouble (and expense) of getting their products certified, so that customers can be assured they’re receiving a safe, effective, and high quality CBD product.

Testing not only ensures that the CBD product has the potency it claims to have, it also ensures that it is free of contaminants, such as heavy metals, bacteria, fungus, herbicides, pesticides, and other unwelcome additions.

The peace of mind that comes from knowing you’re buying a product that has been tested and approved by a third-party lab is well worth the additional cost.

The bottom line on why CBD is so expensive

When it comes to CDB oil prices, the old adage is true: you get what you pay for. Right now, CBD is a high value product with a price tag to match. That price tag reflects the effort and investment of untold individuals and institutions to grow, harvest, collect, refine, quality check, package, and distribute a product that delivers incredible amounts of value to its users in terms of enhanced health and well-being.


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