Seemingly overnight, cannabidiol (CBD) products have exploded onto the retail scene. This may be as a result of the Hemp Farming Act that was passed in December of 2018, making it legal to sell CBD in all 50 states. With CBD extracted from the hemp plant, it does not have the tetrahydrocannabinol (THC) compounds that the marijuana plant has, which produce the “high” feeling. CBD is now considered to be a viable pain relief solution for conditions such as anxiety, chronic pain, depression, sleep disorders and inflammation. The CBD industry is expected to have sales exceed $23B over the next few years. Look for Your CBD Store, Dwell CBD, CBD Emporium, Franny’s Farmacy and CBD American Shaman to expand their retail footprint.
As the national public becomes increasingly exasperated with the fluctuating health ordinances, which seem to coincide with an increased interest in holistic health solutions, it is inevitable that Americans are gravitating toward CBD relief options. Even mainstream brands such as ULTA Beauty, Urban Outfitters, CVS Pharmacy, Walgreens, Dollar General, Rite Aid and Whole Foods Market now carry CBD products. To differentiate themselves, CBD-themed stores are selling homegrown, top-of-the-line upscale products. Preferred co-tenants in this category include grocery chains, especially organic-minded supermarkets and health-focused brands, such as fitness centers, medical providers and smoothie/juice shops. Retail tenants in this category do not have to worry about competition from Amazon, as the online site currently does not sell CBD products.
The Your CBD store franchise has lofty goals of opening approximately 150 to 200 new units per year over the next two to three years in all U.S. markets, with eyes on both suburban and metropolitan sites alike. Look for a major push into Western markets, including Northern California, Oregon and Washington, as well as in the Midwest, such as Missouri, Kansas, Minnesota and Michigan. Northeast markets such as Maryland, Delaware and Rhode Island will also see growth. The brand’s units can range from 750 to 2,000 s.f.
The retailer seeks space in grocery-anchored regional shopping centers and strip malls with preferred co-tenants being high-traffic staples, such as The UPS Store, and fast-casual restaurants, such as Chipotle. The Your CBD Store brand aims to have multiple neighborhood-style locations that can cater to the all-natural holistic pain relief needs of its customers. The stores, with spa-like interiors, carry their own organically-grown hemp products under the “SunFlora” and “SunMed” brands, including topical creams, vape items, bath bombs, gummy candies and merchandise for pets.
Dwell CBD is projected to open approximately 100 new units per year over the next three years and is immediately eyeing all major cities, including Austin, Dallas and Houston, Texas, Orlando, Miami and Tampa, Fla., and Knoxville, Tenn. Look for the Ohio River Valley area to especially be targeted, incorporating Kentucky, Tennessee and Indiana, as well as the Carolinas, Connecticut, Oklahoma and Utah. The franchise seeks inline space in the 1,000- to 1,200-s.f. range in high-traffic strip centers with large grocery co-anchors, such as Kroger or Whole Foods Market. With its demographic skewing toward higher end shoppers for its premium products, the brand is also scoping out upscale lifestyle center spaces. Dwell CBD, a vertically integrated brand, sells its own brands of products, including ingestibles, gummy candies, pet items and skincare merchandise under its own “SKIN” trademarked line.
CBD Emporium, that began franchising last October, is also anticipating opening up to 300 new units over the next three years. The Arizona-based brand is looking to increase its footprint in the suburban areas of Las Vegas, as well as throughout the South and Midwest, followed by growth in the Mid-Atlantic and Southeast.
Look for Texas and Oklahoma to be targeted for immediate growth prospects. CBD Emporium seeks space between 1,400 and 3,200 s.f. in strip malls with large parking lots and easy access in high-end commercial districts within suburban markets. Its demographic base skews toward homeowners aged 45 and older, with some college education.
Preferred co-tenants include organic grocery brands, such as Sprouts Farmers Market; pet clinics, such as PetVet Care Centers and health providers, including American Family Care (AFC). As the brand adds more and more franchises, it is considering larger square footage spaces to improve its merchandising. CBD Emporium, known for its diverse collection of premier, high-quality CBD products, including its own brand of items, recently partnered with Certified Natural Food Chef, Dr. Robert Streisfeld, to formulate new products for its stores to sell.
The Franny’s Farmacy brand of franchised CBD stores is anticipating opening 10 units in 2021 and hopes to open between 15 and 25 units per year from 2022 onwards. Markets immediately targeted include metro areas in the Southeast, including Florida, in addition to some Southwest markets, Connecticut and even the Midwest, beginning with Iowa. Franny’s Farmacy seeks space between 1,200 and 1,500 s.f. but will consider smaller spaces in the 400- to 500-s.f. range, especially in high-density areas.
With its demographic base consisting of customers between the ages of 25 and 55, with an annual income in the $50K to $75K range, the brand looks for inline space in high-end shopping plazas, whether lifestyle centers, regional shopping centers or mixed-use developments, with anchors such as grocery stores, including Trader Joe’s, as well as upscale lifestyle brands such as Lululemon and Williams-Sonoma. Though fairly new to the franchise world, Franny’s Farmacy distinguishes itself as its hemp is from locally grown farm sources, and its merchandise includes smokable hemp flowers, lotions, bath products, vaping devices, CBD-infused coffee and tea, as well as items for pets.
The franchise CBD American Shaman, which grew from one store in 2017 to 410 stores today, plans to continue growing its brand with store-in store units. CBD American Shaman first began its store-in-a-store concept when it entered the Price Chopper Supermarkets in Kansas City, Mo., in August of 2020, and the brand expects to open up to four more of its units in future Kansas City-based Ball’s Foods Stores. If the concept proves successful, American Shaman is prepared to extend the concept to more grocery stores in all cities, especially in regions where there is not already an American Shaman presence. Areas of expected growth include Northern California, Washington, Georgia and North Carolina. CBD American Shaman is known for its high-quality CBD oil relief products, available as a tincture, lotion, in gummy form, as a topical serum or as a water soluble dissolvable, in up to 25 different oil flavors including piña colada, lemon, sweet watermelon and grape.
