Data Shows Growth-Oriented CBD Brands Should Focus on These U.S. Cities First

Thanks to the 2018 Farm Bill and the legalization of industrial hemp, CBD products are becoming more popular than ever. With more people learning about the potential therapeutic benefits of cannabidiol, the demand for CBD products is on the rise and competition among brands is getting fierce. One of the biggest questions CBD brands are asking is where to focus their efforts to capture a sizeable chunk of the marketplace while the industry is still in its infancy.

In the U.S., interest in CBD products has been on the rise for years, and based on the number of searches conducted on Google, the interest in CBD nearly doubled in the past 12 months. In addition, recent forecasts by BDS Analytics and Arcview Market Research show the U.S. CBD market is expected to reach $20 billion in sales by 2024. That’s up from $1.9 billion in 2018 and represents a compound annual growth rate of 49%.

In simplest terms, the opportunity is waiting for companies to seize it.

Who is Buying CBD Products?

BDS Analytics and Arcview Market Research developed a demographic profile CBD consumers based on their research. According to the data, CBD consumers are about 50% male and 50% female, an average age of 40 years old, have higher educations than non-consumers of CBD, and are more likely than non-consumers to be employed full time.

In other words, it’s not surprising that so many CBD brands are launching and the fight is on for market share. This is a market with huge potential.

Where Should CBD Brands Focus Their Growth Investments?

For growth-oriented CBD brands, a recent report from the CBD Awareness Project, offers guidance on where to focus marketing and sales efforts.

Researchers from CBD Awareness Project conducted a study to identify cities in the U.S. with residents who would benefit the most from using CBD. Each city included in the study had a minimum population of 200,000 and represents a significant market opportunity for CBD brands.

The researchers based their rankings on the prevalence of seven health conditions where science has shown CBD can help to relieve common symptoms. The seven conditions are:

• Arthritis
• Cancer
• Diabetes
• High blood pressure
• Poor mental health (including anxiety and depression)
• Poor sleeping habits
• Smoking

The researchers discovered that most of the cities where residents would benefit from CBD are in the Southeast and Midwest where medical and adult-use cannabis laws tend to be the least progressive. Only one city on the West Coast appears in the top 25, and it ranked in the 25th position.

Based on the data, there is a significant opportunity for CBD brands to provide an alternative therapeutic solution to consumers who suffer from these seven conditions, particularly in the Southeast and Midwest.

Looking at the data by state, Ohio appears to be the biggest opportunity with three cities ranking in the top 25. Alabama, Kentucky, Louisiana, Missouri, New York, Pennsylvania, and Tennessee each have two cities ranked in the top 25, while California, Maryland, Michigan, North Carolina, New Jersey, Virginia, and Wisconsin each have one city ranked in the top 25.

The top 25 cities where consumers would benefit the most from CBD based on this study are:

1. Detroit, MI
2. Buffalo, NY
3. Toledo, OH
4. Cleveland, OH
5. Rochester, NY
6. Cincinnati, OH
7. Birmingham, AL
8. Memphis, TN
9. Louis, MO
10. Louisville, KY
11. Montgomery, AL
12. Baltimore, MD
13. Milwaukee, WI
14. Newark, NJ
15. Philadelphia, PA
16. Columbus, OH
17. Nashville, TN
18. Baton Rouge, LA
19. Kansas City, MO
20. New Orleans, LA
21. Fayetteville, NC
22. Lexington, KY
23. Pittsburgh, PA
24. Richmond, VA
25. San Bernardino, CA

Analyzing the data based on the percentage of residents who have each of the seven conditions included in the study, the top three cities for each condition are as follows:

Arthritis

1. Detroit, MI: 33.3%
2. Toledo, OH: 31.1%
3. Louis, MO: 30.5%

Cancer

1. Louisville, KY: 6.5%
2. Lexington, KY: 6.3%
3. Columbus, OH: 6.2%

Diabetes

1. Detroit, MI: 17.3%
2. Birmingham, AL: 16.7%
3. Cleveland, OH: 15.8%

High Blood Pressure

1. Detroit, MI: 46.3%
2. Birmingham, AL: 44.1%
3. Cleveland, OH: 40.3%

Poor Mental Health (Including Anxiety and Depression)

1. Detroit, MI: 17.9%
2. Cleveland, OH: 16.4%
3. Rochester, NY: 15.9%

Poor Sleeping Habits

1. Detroit, MI: 50.1%
2. Newark, NJ: 48.9%
3. Toledo, OH: 43.3%

Smoking

1. Cleveland, OH: 29.5%
2. Detroit, MI: 28.6%
3. Toledo, OH: 26.7%

In addition to the opportunities for CBD brands mentioned earlier in this article, a couple of things stand out when reviewing the study results as they relate to medical conditions.

First, Detroit, Michigan represents a significant opportunity for brands offering products related to six of the seven conditions tracked. The city ranks number one for arthritis, diabetes, high blood pressure, poor mental health and poor sleeping habits, and it ranks number two for smoking.

Second, at least one city in Ohio ranks in the top three for all seven conditions. In other words, both Detroit, Michigan and the state of Ohio represent significant opportunities to gain market share for CBD brands.

Key Takeaways for CBD Brands

For CBD brands that want to acquire early market share and position themselves for rapid scaling as laws related to selling CBD products develop, the data from the CBD Awareness Project’s study could provide interesting insights for strategic planning.

Whether a CBD brand wants to focus on geographic areas or medical conditions based on the products it sells, the data shows there are a lot of people who could benefit from those products, which means there is a lot of market share to claim with targeted marketing and sales programs.