What is CBD oil, and why is it so expensive?
Following is a transcript of the video.
Narrator: Depending on who you ask, CBD oil can be a miracle cure, a snake-oil placebo, or something vague in between. This poorly regulated industry, which has boomed over the last three years, is a minefield for newcomers. Considering that manufacturers are unauthorized to make medical claims, how can one CBD oil cost $50, while another of the same volume costs $390? And are premium CBD oils justified for being so expensive?
Firstly, what is CBD?
Dani Gordon: CBD stands for cannabidiol. That’s the chemical name for one of the chemicals in the cannabis plant. The CBD oil that you’re seeing on shelves that consumers can buy without a prescription is actually from low-THC, the stuff that makes you high, varieties of the cannabis plant.
Narrator: CBD is a new and rapidly growing phenomenon, with sales tripling in the last three years. But the line between what consumers are using it for and what manufacturers can say to attract them is increasingly blurred.
Gordon: It can be used for a variety of purposes, things like inflammation, anxiety, stress, and it can also be used just to support general wellness. Now, the differentiating criteria between a medicine and a supplement is you cannot make a claim that it treats or cures a specific medically diagnosed disease. And that’s really important for companies to understand, because they can get their products pulled off the shelves, and they can also potentially sometimes unintentionally mislead consumers.
Narrator: But in the age of anxiety, it’s no surprise that CBD has become a hot ticket for manufacturers, who infuse all sorts of products with cannabidiol, shrewdly tapping into its perceived wellness benefits and bumping up the price of otherwise standard items, like gummies, sportswear, tampons, and even dog treats. But how do we assess the value of CBD oil, which is actually produced in two different ways?
Gordon: A full- or broad-spectrum product is made from the whole plant extract. They take the flower and they process it, and they come up with an extract that not only has CBD, but it has other plant chemicals, other cannabinoids, other terpenoids, other things in the plant that work together in this, what’s called this herbal synergy, this entourage effect. And what you get is greater than the sum of its parts.
Narrator: But some manufacturers process the extract even further into CBD isolate, a substance devoid of all other plant chemicals and labeled as “pure CBD.” But this isolate, which often features in expensive products, is generally considered to be less effective and cheaper to make.
Gordon: Some brands and some companies will put CBD isolate into a product and then brand it as a premium product, even though the cost of actually making it, because the cost of the isolate, is quite a lot lower than the cost of a full- or broad-spectrum CBD.
Narrator: But because of lax regulations in the industry, this fundamental difference in CBD oils is often disguised by manufacturers. The front of this premium $300 bottle, for example, does not display that it is, in fact, made from isolate.
Gordon: Sometimes you have to dig into the nitty-gritty of the ingredients. And sometimes you even have to, you might have to call the company and see what they’ve actually used. But in general, the labeling criteria are becoming a little bit stricter, so more and more consumers will be able to know what is a CBD isolate product and what comes from a full- or broad-spectrum source.
Narrator: These products can also be measured by the amount of cannabidiol in each bottle.
Gordon: What you really need to look for is the number of milligrams in the entire bottle, and then the number of milligrams of CBD per dose. And that’s really gonna tell you the bang for buck.
Narrator: But even high-dosage, full-spectrum CBD doesn’t have the approval from the Food and Drug Administration. The FDA says it “recognizes the significant public interest in cannabis and cannabis-derived compounds, particularly CBD. However, there are many unanswered questions about the science, safety, and quality of products containing CBD.”
More worryingly, lab tests conducted by the Centre for Medicinal Cannabis found that 62% of CBD products tested in the UK didn’t contain the cannabidiol content promised on the label. One product actually contained no CBD whatsoever.
CBD is shrouded in mystery and confusion for the consumer. On the one hand, a 2018 cross-sectional study of CBD users found that almost 62% “reported using CBD to treat a medical condition,” stating that CBD has “broad therapeutic value. But on the other hand, manufacturers cannot use the research data to make medical claims, leaving spokespeople in the unenviable position of having to promote their products to a certain demographic while avoiding endorsing the public’s perception of CBD.
Brett Heaps: So, what we’re not allowed to do with our products is make any medicinal claims, ’cause they’re not medical products. All our products that we sell are wellness products to improve sleeps and moods. We see CBD as a homeostasis product, which balances the levels in your body to get you into a normal state and balanced mind.
Narrator: Thankfully, despite the misconceptions, no matter what you use it for, there is a way to get a snapshot of the quality of CBD oil.
Gordon: You wanna look for a certificate of analysis. That means that that is a third-party-tested lab report. They test their product to make sure that it’s not contaminated, make sure it doesn’t have accidental THC levels above the allowed limit. Make sure it doesn’t have heavy metals in it. Make sure there’s no microbials, so, bacteria or fungus that can grow in these plants. No herbicides, pesticides, things you don’t want in it.
Narrator: So, why is it so expensive? The cost of producing CBD oil isn’t particularly high in relation to other large-scale crops. But there appears to be a premium on all cannabidiol, as revealed in this comparison of full-spec CBD, which shows that its prices grow pretty uniformly, according to the price per milligram in each bottle. With any wellness product with a global hype, high demand means high prices. Statistics show that sales of CBD will likely reach $1.8 billion in the next two years. But without regulation, medical research, and clear consumer knowledge, the human value of CBD oil will, for now, remain a matter of opinion.
CBD is a growing phenomenon, with sales tripling in the last three years. But manufacturers are forbidden to make medical claims on its effectiveness.
Why Good CBD Oil Is So Expensive
While only a handful of states have legalized recreational and medical cannabis, only three states have outlawed CBD oil: Idaho, Nebraska, and South Dakota. If you live outside of those states, you can probably find some CBD products online or in stores. But why is CBD so much more expensive than other cannabis products?
This conundrum is especially mystifying when you consider the fact that CBD doesn’t have the psychoactive benefits that most folks seek from cannabis products. Let’s take a closer look at what CBD is and how it’s extracted from cannabis plants.
What is CBD?
For starters, CBD stands for cannabidiol, which is one of the dozens of chemical compounds that are found in cannabis plants. CBD can be extracted from cannabis plants and then mixed with an oil carrier (hemp seed oil or coconut oil) to create CBD oil.
The most important thing to know about CBD is that it’s distinct from THC, which is also derived from cannabis. CBD doesn’t create the “high” that most people associate with THC and cannabis. However, there is research indicating that CBD oil can have health benefits for people without the “high” of THC.
Various studies have suggested that CBD oil is useful in relieving pain, clearing up acne, reducing anxiety and depression, and alleviating the symptoms of cancer, among other claims. To some extent, the jury is still out, although the health and wellness community is becoming more receptive to the benefits of CBD oil.
Full spectrum CBD products aren’t just popular with humans, they have been increasingly used by pet owners as well with great initial success.
Different Types of CBD Processing
The processing of CBD oil is one of the reasons for its high cost. The machinery used to harvest hemp and isolate CBD is expensive, so producing CBD oil is not a cheap endeavor for companies to undertake. There are also a few different methods of processing CBD that ultimately have an impact on both the quality of the end product and the price that consumers will pay for it.
Extracting CBD oil using carbon dioxide yields some of the highest-quality CBD available. Naturally, it’s also one of the more expensive ways that CBD oil is produced. It requires several machines (none of which run cheap) that use liquid carbon dioxide to act as a solvent for CBD.
The good news is that this method is tried and true, producing CBD oil that’s safe for consumption and incredibly potent. However, between the equipment and the lab setting required to work with liquid CO2, the overhead costs of such an operation are far higher than other extraction methods. The other downside is that carbon dioxide extraction produces a smaller amount of CBD oil than other methods, meaning the supply is more limited, which further increases prices.
Olive Oil Extraction
Extracting CBD oil using olive oil is another option. While CO2 extraction is more common with larger operations, olive oil extraction makes it possible for small cannabis businesses and at-home growers to produce CBD oil. This method involves heating the cannabis plant to activate its chemicals before mixing the hemp with olive oil and heating it for an hour or two at 212 degrees Fahrenheit.
In lieu of olive oil many people also use coconut oil for its healthy fats, or regular dairy butter for its flavor. There are a wide variety of decarboxylation devices that make this process a breeze to do at home. Big consumer brands in this space include Ardent Nova, and more recently, Levo 2, a “smart” home solution for personal extraction.
The biggest pros of this extraction method are that it’s safe and inexpensive for small-scale growers. However, the results can vary, making it difficult to guarantee the end product will be high-quality CBD oil. It’s also difficult to create enough CBD oil to sell commercially; it’s more suited for growers who want to produce oil for themselves and a few friends.
Ethanol Solvent Extraction
Ethanol solvent extraction is one of the cheapest methods of producing CBD oil. Using ethanol as the solvent is a relatively quick process that yields a higher volume of CBD oil than carbon dioxide. The machinery used in the process is also far less expensive.
But because it’s a less-sophisticated process, there are safety concerns. There will also be residual ethanol solvent in the CBD oil, which can diminish the quality of the final product.
Full-Spectrum vs. the Cheaper Alternatives
For CBD oil users, it’s important to understand the difference between the “gold standard” full-spectrum oils versus the isolate oils.
What Is Full-Spectrum CBD Oil?
A full-spectrum CBD oil won’t be pure CBD oil. Rather, it will include a variety of elements found in cannabis plants. This will include other cannabinoids, as well as terpenes, fatty acids, vitamins, and small amounts of THC. With over 100 cannabidiol compounds in cannabis plants, people are more likely to feel the positive effects of CBD oil if it’s a full-spectrum product. Users may also benefit from the vitamins, fatty acids, and protein present in full-spectrum CBD oil.
Meanwhile, the amount of THC in full-spectrum products is so minimal that users won’t feel a “high” from it.
For people using CBD oil as a health supplement, full-spectrum products are often considered to be the gold standard. They are the best way to experience the full effects and benefits of cannabis plants. Of course, in addition to the high cost of extraction and the quality of full-spectrum CBD oil, the demand for full-spectrum oils contributes to the high cost of these products.
What Are Isolates?
Many of the available CBD oils are considered isolates, which isolate CBD from the other compounds in cannabis plants. Isolates are cheaper to produce than full-spectrum CBD oils because they don’t extract a lot of the other cannabinoids, terpenes, THC, and so on.
There are also broad-spectrum CBD oils , which fall somewhere between full-spectrum and isolates. Broad-spectrum products have undergone refinement to remove any traces of THC before the CBD oil is bottled and sold. Since they’re easier to produce and not as potent, broad-spectrum CBD oils are priced on the lower side as well.
The catch is that isolates and broad-spectrum CBD products are sometimes passed off as top-shelf, full-spectrum CBD oils to justify higher prices. However, studies show that the benefits of CBD isolates are noticeably less than full-spectrum CBD oils, which means that isolates shouldn’t be priced the same, even if companies try to market them as more potent CBD full-spectrum oils. Plus, it’s false advertising at best and a full-on scam at worst.
Third-Party Testing of CBD Oil
Third-party testing has become a critical part of the CBD oil market because it can determine what products are the most potent. Many companies are choosing to pay independent labs to test their products and then display the results on the bottle or in a public forum. This helps to give consumers confidence that the “full-spectrum CBD oil” isn’t an isolate or broad-spectrum product.
Independent labs will test specimens for a variety of cannabinoids, most notably CBD and THC. These are the two most important items to test. Needless to say, the amount of CBD measured during testing needs to match the amount that’s listed on the bottle. The levels of THC detected are also critical. Users of CBD oil don’t expect to get a “high” from the oil, so levels of THC need to be kept to a minimum to avoid any psychoactive effects.
Lab testing will also look at levels of terpenes, which contribute to the smell of cannabis plants, as well as some of their therapeutic benefits. The presence of terpenes will also be a strong indicator that the CBD oil is full-spectrum, as they are removed from CBS isolates during the extraction process. Therefore, if there’s an isolate being marketed as a full-spectrum CBD oil, third-party testing will expose the potential scam because the product will lack terpenes.
Third-party testing will also help to expose products that contain heavy metals or biological contaminants. Cannabis can be vulnerable to harmful compounds like lead, mercury, arsenic, or cadmium that are in the soil where the plants are grown. These heavy metals can do serious damage if consumed, so testing helps to detect any harmful batches of CBD oil. Labs can also detect bacteria, mold, or parasites that infected the cannabis plant and could be harmful to consumers.
The purpose of third-party testing is also to hold companies accountable for the prices they charge. The problem is that third-party testing isn’t a requirement for selling cannabis products. If consumers don’t look for a certificate of analysis or confirmed results from third-party lab testing, they may not be buying the product they want – or paying too much for it.
Since cannabis is federally illegal, there’s no FDA-approved CBD product (except for a single prescription treatment for epilepsy). So the consumer needs to be extra vigilant!
Organic CBD Oil
One good reason for the high cost of CBD oil is that many companies produce organic products. Some of the top brands that charge higher prices do so because their CBD oil is derived from organic hemp, meaning it’s free of GMOs and pesticides. Perhaps most importantly, organic CBD oils are more than likely going to be full-spectrum products. Even if you pay a high price for your CBD oil, with an organic brand, you can at least be sure that you’re going to get a potent and high-quality product.
While only a handful of states have legalized recreational and medical cannabis, only three states have outlawed CBD oil: Idaho, Nebraska, and South Dakota. If