3 Tests for CBD Manufacturers Who Will Win With Mainstream Retailers

August 20, 2019 08:00:22

Let’s face it, mainstream retailers hold the key to getting different CBD products to the millions of clients that CBD manufacturers would like to reach. Unfortunately, not all CBD manufacturers will win the hearts of mainstream retail giants, and those that do will have to pass the following three tests.

The Scalability Test

Many CBD companies are startups that are looking for their big break into the market. The ones that will attract the attention of big distributors and mainstream retailers are the ones that are poised to quickly scale up their production in order to meet the large orders that come with partnering with a large distributor.

Companies which cannot meet the large orders made by big retailers with a presence in many markets across the country will be dropped in favor of those whose manufacturing and quality assurance systems are robust enough to scale up in response to market demand.

The Connections Test

To be honest, luck often has very little to do with whether a company wins the hearts of mainstream product retailers or not. In most cases, the companies that manage to get shelf space from large retailers are the companies which put consumer packaged goods experts in key positions in their hierarchies.

Those consumer packaged goods (CPG) experts usually come with connections within the distribution system, and those connections are leveraged to get a foot in the door during discussions with large retail chains and distributors.

CBD companies should look around and get these experts on their payroll so that they can have a chance to stand out from the hundreds of CBD product manufacturers eyeing the same space on retail shelves.

The Integrity Test

The U.S. is a largely litigious nation, and large distributors or retail chains are particular targets of liability lawsuits. These companies therefore go to great lengths to scrutinize the companies that would like to put their products on their retail shelves.

It is therefore important for CBD companies that wish to do business with these large entities to put their house in order regarding the type of claims that they make with respect to their products. The case of the FDA warning to Curaleaf immediately comes to mind as an illustration of this.

Adhering to all existing laws, providing third-party test results for products, transparency and traceability of a product to its source and other matters of product integrity are crucial in securing retail space on the shelves of large distributors and mainstream retail giants.

The requirements above apply to nearly every product that needs space in major retailers’ premises, but they take on an added degree of importance for CBD products which are currently operating in a kind of legal grey area at the federal level. It is for this reason that experts believe major CBD industry players like The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF) and The Supreme Cannabis Company Inc. (TSX.V: FIRE) (OTCQX: SPRWF) go to great lengths to cover all bases before bringing any product to market.

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