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The CBD industry is continuing its rapid expansion into national chain retailers, with Kroger signing on as the most recent store to carry CBD-infused topicals.

Last week, Veritas Farms, a vertically integrated producer of CBD products including salves, lotion and lip balm, announced that its offerings will be available for purchase in 945 Kroger stores. The company’s products are also sold in select stores of other major retailers, including CVS Pharmacy, Fruth Pharmacy, Neiman’s Family Market and Bartell Drugs.

Photos courtesy of Veritas Farms

Veritas, a public company headquartered in Fort Lauderdale, Fla., operates a 140-acre farm and production facilities in Pueblo, Colo. The company’s operations include cultivation, extraction, manufacturing, bottling and shipping, and each Veritas product has a batch-unique QR code on its packaging that links to Certificates of Analysis provided by a state-registered lab.

“We really focused on e-commerce and independent retail for the first year and a half or so, but we were always preparing for chain retail, as well,” Derek Thomas, VP of business development for Veritas, tells Cannabis Business Times. “Circa Farm Bill of late 2018 is when you really started to see traditional chain retail reevaluate the opportunity and really enter the space. As we have been preparing for it, we were ready to start capitalizing.”

Veritas sells different products through each retailer and in each state, depending on each store’s policy and the state laws around CBD, Thomas says. “For example, in California, throughout any retailer, you’re really just going to find topicals that are being sold. But in a state that’s more friendly, like Washington, … you might find ingestibles like tinctures and gummies, as well.”

The process of getting product on the shelves also depends on the specific retailer, Thomas adds, but some of the protocols are beginning to align with the traditional consumer packaged goods industry, where a company will often work through broker networks.

“A lot of [our] success has come through these broker-type relationships [where] they go out and … work on getting you into different chain retailers,” Thomas says.

Getting its products into these big-box stores will not only improve Veritas’ sales and revenue, but also its brand awareness, Thomas adds. “Between the couple thousand chain retail stores that we’re in, that is a lot of visibility. That’s a lot of eyeballs that are constantly either directly engaging with the product or at least noticing it as they walk by the aisle.”

Vertias’ full spectrum hemp oil salve

The move into chain retail will also help boost Veritas’ reputability, Thomas says. “It’s really impactful for these chain retailers to enter the space, period. It gives a lot of legitimacy to the category, but it also allows the consumer a level of trust that isn’t often the same at an independent retailer. … These national chain retailers have the ability to do so much more in-depth due diligence into the brands that they’re carrying from a quality assurance perspective, from a consistency perspective. So, when a consumer can go into a CVS or a Kroger, they know that the organization has just vastly more resources to ensure that that product is quality versus an independent retailer.”

That’s not to say that independent retailers haven’t been instrumental in building the CBD industry to this point, or that they will not continue to have a place in the business models of companies like Veritas, Thomas adds.

“Independent retailers have brought this space to fruition,” he says. “All of the education, all of the availability to consumers thus far has been in independent retail. This literally couldn’t have been done without them and we will forever be working with our independent retail partners.”

Consumers are creatures of habit, Thomas says, and if they like going to their local holistic health food store for certain CBD brands and products, they will likely continue to do so. Meanwhile, consumers who may not visit these independent retailers, but who instead shop at their local grocery store chain, can now also be exposed to new brands and products.

“In some geographies, you really only have independent retailers, and then in some other geographies, some towns are built around a Walmart, so to speak,” Thomas says. “We just want as much accessibility for customers as possible, so we’re going to continue to support both.”

Veritas’ full spectrum hemp oil lip balm

Major retailers carrying CBD products will not only bring legitimacy to CBD producers and brands like Veritas, but also to other facets of big business, Thomas adds, such as merchant processing and banking. “That’s of course going to be supported by additional legislation that moves that forward in a positive direction, but as you see these chain retailers enter this space, it really encourages other big institutions to reconsider their current positions—merchant processing, banking, institutional investors and the capital markets.”

This also extends to advertising, Thomas says. “We can’t advertise on major television networks yet. We can’t advertise on Facebook. We can’t buy ads on Instagram. We really can’t even do Google AdWords yet. So, on the advertising side, chain retail entry is really going to open this up to the big advertising mediums to say, ‘Oh, wait, we’re missing out on this lost revenue. Instead it’s going to Instagram influencers or instead it’s all going to paid partnerships. We’re missing out on a slice of the pie.’”

As revenue increases for Veritas through the sale of its products in chain retailers, it will support the company’s continued research and development efforts, Thomas says. “It’s going to support us to do new innovative products, new delivery methods, new cannabinoid ratios.”

And all the while, Veritas is keeping an eye on the USDA and FDA for the agencies’ forthcoming regulation of hemp and CBD, Thomas adds. Although he is encouraged by the USDA’s recent announcement that hemp can legally be transported across state lines, as well as the TSA’s updated policy that allows CBD products on flights, Thomas anticipates that FDA regulations may take longer to develop.

“We will continue to monitor it, but they’re going to move at their pace,” he says. “We’ve seen them treat other categories with lightning speed and we’ve seen them also treat certain categories and emerging products very slowly and very cautiously. So, hopefully we get the right kind of guidance in the next 18 months or so, but ultimately, the best we can do is monitor and do the best to prepare for what we think what might come down.”