EDITION:

Search
Search
Close this search box.

15% Of European Consumers Have Tried CBD, But Industry Held Back By ‘High Turnover Rate’ Of Users

THE European CBD market is set to see a ‘massive influx’ of previous and new consumers to the market over the coming year, new data suggests. 

According to a new survey of over 5,000 people across Europe conducted by Prohibition Partners for its newly released The European CBD Report: Health & Wellness, every metric investigated indicates that the ‘number of consumers and the amount of consumption in Europe is still gradually increasing’. 

Despite this, the data also suggests a ‘high turnover rate’ of CBD consumers and ‘troubling’ financial performances of public companies trading across the continent, as many markets and companies continue to operate under ‘legally grey circumstances’. 

This handicap is expected to change over the next ‘two to five years’, by which time it is predicted that ‘fully legal CBD food products’ will be sold in major retailers in every country in Europe, while CBD flower will be taxed and sold ‘across the whole continent’. 

Consumer survey

Prohibition Partners’ survey suggests that around 15% of consumers across Europe have tried CBD, including 11% who have used some form of CBD product over the past 12 months. 

Normalisation of CBD products and better knowledge of their safety have also driven awareness, with over half of respondents stating they were aware of CBD. 

Of the 11% who had used CBD products in the last 12 months, 35% said their use was ‘infrequent or occasional’, suggesting they used products less than once a month, while 39% said they used CBD once per week or more. 

The survey also found that younger consumers were more likely to use CBD, with respondents aged between 18 and 24 around twice as likely to report use over the last 12 months as those aged between 50 and 60. 

While these results were generally consistent across European countries, Poland had the highest prevalence of past-year CBD usage (15%), while Italy had the least (8%). 

“These results confirm that CBD is now a commonly purchased CPG product across most European countries, despite the lack of regulation and any enforcement of laws.”

Of the 995 CBD users surveyed, 56% said that they used oils and tinctures, seeing this remain the most popular product format. 

This was followed by hemp flowers, which surpassed food and drink products as the second most common form of CBD consumption across Europe. 

“As CBD flowers become a more accepted product format for consumers, and regulators are more easily able to distinguish between legal and illicit products, more shops will begin offering them,” the report explained. 

“The novel and inhalable product formats of flowers and vapes are also expected to be regulated properly in the upcoming updates to tobacco regulations in Europe.”

CBD Financials

The report also details how the majority of revenue being generated within the industry is ‘not supporting large public companies but rather smaller private enterprises’, though it notes that as CBD continues to operate in a grey area only a small section of revenues are publicly reported. 

Revenue growth across European public CBD companies was found to be strong, with the average company reporting a 44% year-on-year increase in income. 

Despite this, the ‘imbalance between revenue and cost of sales’ stretches across Europe, meaning that ‘virtually no company’ other than Jazz Pharmaceuticals is turning a profit. 

Furthermore, as both the operators and market continue to grow in size ‘the losses are mounting’ with tens of millions of euros being lost each year. 

Six of the leading European public CBD operators increased their operating losses by 400% between 2019 and 2021, while divestment from large North American players and insolvencies have increased. 

Aurora and The Green Organic Dutchman have both divested their European CBD operations and subsidiaries since 2020, both making losses on their initial investments and attributing the moves to a restructure to focus on core assets. 

Halo Collective scrapped its plans to acquire Swiss CBD producer Phytocann last year, while market frontrunner Always Pure Organics fell into insolvency the same year. 

However, other companies are doubling down on the European market. Last year, Tilray launched a new CBD brand Pollen in the UK, which now sells on Amazon UK, while US giant Charlotte’s Web has also made significant investments in the UK market via Savage Cabbage. 

“This is attributable mostly to the early nature of the market, and the fact that most companies are still fighting for market share before regulations which properly support the industry are in place.

“While it is tempting to think that early arrivals to the market who catch a large part of the share will be the ones to survive consolidation after regulations and enforcement catch up with the industry, the lessons from the Canadian cannabis sector should be borne in mind. 

“Overinvestment across multiple segments of a supply chain has seen the loss of billions of euros from large Canadian companies. While the scale is much smaller for European CBD companies, the lesson remains the same; if profitability is not emphasised early on, it is likely that the company will not reach profitability as the market matures.”

 

You can downloaded The European CBD Report: Health & Wellness here.

Related Posts

Related Posts

CONNECT

Related Posts

Related Posts

Recent Posts

Related Posts

Subscribe to our mailing list to receives daily updates!

We won’t spam you

Categories

Browse by Tags

CATEGORIES

EDITION

BUSINESS OF CANNABIS

© 2023 Prohibition Holdings Ltd. All Rights Reserved.

EDITION

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?