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CBD beauty brands grapple with brick-and-mortar closures

CBD beauty companies are reeling from the sudden closure of brick-and-mortar retailers after heavily leaning on them in the past year.

Everything about 2020 pointed to better conditions for the CBD category: The Farm Bill passed at the end of 2018, allowing platforms like Shopify and retailers like Ulta and Sephora to grow comfortable with CBD. But with physical stores closed, CBD brands have to re-navigate digital advertising constraints and direct customers to e-commerce sites, both for the solvency of their own business and for partners. CVS, one of the few CBD retailers remaining open, has limited physical CBD distribution.

For a brand like Cannuka, the pivot has had to come quickly. Nearly 97% of its 2019 revenue was from brick-and-mortar, said Michael Bumgarner, Cannuka founder, who has been candid about the need for retail due to constraints with online advertising. The brand is in over 2,000 doors through partners like Ulta, Nordstrom and Neiman Marcus. Cannuka projected between 600% and 1,000% sales growth in 2020; as of this week, the company has not determined what new projections will be.

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