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Cannabidiol—more popularly known as CBD—is becoming even more mainstream.
Consumers are turning to CBD to cope with anxiety and other medical issues, with Statista estimating that 2020 sales will reach $1.15 billion. But with any burgeoning industry, there are snake oil salesmen; figuring out who they are can be tough.
The popularity of CBD—and the amount of misinformation out there—has created an opportunity for Eaze, a cannabis delivery company in California, to flood the market with the one-two punch of CBD products and educational material. Its website teaches consumers about everything from proper usage to figuring out the amount of CBD in each product. To that end, the company, through its new digital marketplace, Eaze Wellness, will now sell and ship CBD products to 41 states and Washington D.C. It will not sell in California due to an ongoing debate over the regulation around what types of CBD can be sold and by whom.
“We saw a consumer need for basically a one-stop shop for safe, hemp-qualified CBD products,” said Shri Ganeshram, vp of growth at Eaze. “What we’ve done is created a curated CBD marketplace of what we believe are the best [products].”
Eaze raised $27 million in September 2017 in a Series B round of funding and has more than 350,000 customers, with more than 2.5 million deliveries in four years. The company declined to share growth and revenue numbers.
CBD is a cannabis compound that does not have the same effects as THC. Because of that, CBD is used to treat pain and anxiety, in the forms of oils or creams in lotions. However, it’s increasingly found in new types of products from sparkling water to pet products.
Eaze expanded nationally with CBD instead of cannabis because of the “massive opportunity” the company saw to explain the product better and how someone could actually use it. While CBD has grown in popularity, it’s hard for consumers to distinguish how much CBD is in a product; if it’s safe; and myriad other questions that Eaze Wellness wants to solve. There isn’t yet an industry standard Nutrition Facts-type labeling system.
Ganeshram said Eaze is only selling 20 different brands to start with (which it bought at wholesale price), with about 100 products to purchase, ranging in price from $10 to $100. Consumers can buy the products on the Eaze Wellness website and it’ll ship for free with a purchase of over $50 in four to six days.
To choose the brands, Ganeshram said Eaze “surveyed the entire market” and is working only with companies that it has vetted through an internal process, which includes meeting the brand, third party lab testing on products from each brand, as well as an internal focus group to try out the products themselves.
“Ultimately we wanted to take the guesswork out of buying CBD for consumers,” Ganeshram said. “[The marketplace is] rather curated. CBD is hard enough to navigate and we didn’t want to overwhelm people who aren’t as familiar and might be just entering the market.”
Benjamin Witte, founder of Recess, a CBD-infused sparkling water drink, said he supports what Eaze is trying to do by removing some of the mystery of how to consume the drug.
“I support proper regulation in the market and I would support consumers having the best information available,” Witte said.
Witte believes CBD products are going to “be bigger than marijuana in the future,” and thinks that’s why Eaze is getting into the market. The Eaze Wellness marketplace also lends itself to brands cracking through the space and becoming the go-to product in a category, which Witte said is the angle Recess is going for.
“We’re taking a brand-first approach to the ingredient and category,” Witte said. “I fundamentally believe consumers hire a brand to do a job.”
Eaze’s timing with the release of Eaze Wellness comes just as Attorney General Jeff Sessions announced his resignation, bringing some optimism to the cannabis industry—or at least the stock market responded positively.
“We’re basically optimistic about the progress being made on cannabis policy in the states,” Ganeshram said. “We’re hopeful that things will evolve for the better. Basically just cautiously optimistic at this point. That’s the sentiment industry round.”