Trust - Why it matters
It's been a bumpy couple of years for many CBD consumers as it is getting harder and harder to know what CBD company to trust, yet the CBD market is growing. The global cannabidiol (CBD) market will hit US$ 3 Bn by the end of 2022. The market for cannabidiol products will further expand to surpass US$ 34 Bn by 2031, expanding more than 11x, thanks to rising demand for full legalization and a ready consumer base.
It's been a bumpy couple of years for many CBD consumers as it is getting harder and harder to know what CBD company to trust, yet the market is growing. The global cannabidiol (CBD) market will hit US$ 3 Bn by the end of 2022. The market for cannabidiol products will further expand to surpass US$ 34 Bn by 2031, expanding more than 11x, thanks to rising demand for full legalization and a ready consumer base.
Rising awareness of CBD and stories of experienced benefits being widely shared is propelling the CBD industry's growth. This growth is prompting buyers to purchase cannabidiol products without first understanding how these products are made and distributed. For most of the products consumers are using, there is an intrinsic trust given to the manufacturer that the product is safe, especially in the case of products intended to be ingested, inhaled, or applied to the skin. This intrinsic trust mainly stems from regulatory oversight, which many consumers may not realize is very much lacking in this industry. Therefore, many consumers may be taking an unknown leap of faith when taking CBD as they rely heavily on the manufacturer to do their due diligence to regulate themselves.
The top players in the industry follow, in most cases, ethical and quality standards. Ultimately, the majority of the 3000-plus CBD companies are primarily marketing companies. These companies purchase raw or finished products from brokers, which leads to a broken chain of custody and very little control over the sources of their finished goods. Furthermore, many companies lack strict quality control and assurance oversight necessary to ensure that hazards present from manufacturing and extraction methods are caught and remediated before being released for human consumption.
Despite strong demand, the overall market is still struggling. Rocked by a global pandemic and its resulting economic havoc, thousands of CBD companies in the United States have closed their doors. Yet, for each company shutting down, another is taking its place. With thousands of new and inexperienced brands jostling for market share while trying to keep costs down, many corners may be cut
The main concern from advocates in the space is that CBD can be a fantastic plant-based relief solution for many people and a genuine market disruptor in healthcare as more and more people know about it. Yet, the unregulated, saturated, untrustworthy players could negatively affect consumers' confidence resulting in reversing years of progress made by companies and individuals who really care.
Based on recent research, 33% of American adults have used CBD at least once. (SingleCare, 2020), and 64% of Americans are familiar with CBD and/or CBD products. (Gallup, 2019), An estimated 64 million Americans have tried CBD in the last 24 months. (Consumer Reports, 2019), Of those who use CBD, 22% said it helped them supplement or replace prescription or over-the-counter drugs. (Consumer Reports, 2019). The momentum is there, and now is the time for the industry to take things to the next level. This is the end of the beginning of CBD, not the beginning of the end.
A staggering amount of human and financial capital has been allocated to CBD businesses. The sector's struggles highlight CBD companies' failure to deliver on a core promise: trust. The CBD Magna Carta, which inspired hemp advocates to introduce CBD, used the words we know better, "trust us” and summed up this plant-based solution as "a new way to heal people's ailments by bypassing healthcare's complexity.
Why would most CBD companies want to cut corners for short-term profits, thus eliminating trust? As Scott Galloway - a famous NYU professor, would say, "Trust is at the heart of all human endeavors. Our species' superpower is cooperation, which requires that we trust one another. Trust that we will divide the spoils of the hunt, keep our livestock from one another's fields, or honor a warranty on a defective product. Modern life exists on a web of Trust — from the dairy aisle to the interstate highway, we rely on millions of other people to do their jobs and demonstrate a high regard for people they'll likely never meet. But maintaining all that Trust is expensive and cumbersome. I trust drivers to obey speed limits because I've paid tax dollars to support highway patrol officers. I trust milk because the FDA inspects dairy plants, and the brand name tells me who to sue if the milk makes me ill.
The financial system, in particular, is scaffolded by an elaborate set of safeguards — incentives, regulations, relationships, the rule of law, fiat currencies — ensuring Trust that we can move our capital without fearing it will disappear en route. For example, in 1867, the cost to transfer assets, via stagecoach, from San Francisco to Omaha was roughly $10,000, adjusted for inflation. Today, Wells Fargo transfers money much faster and at a near-zero cost. The value driver is not SWIFT, CHIPS, or the Fedwire system, but our Trust that a transfer will actually happen.
Beware of CBD bros preaching salvation. Companies can just use colors, images, and nice fonts promising to eliminate any problem you may have, only to present new problems. CBD's dirty little secret is that it no more eliminates the need for Trust than it has replaced the existing relief solutions. Its core rhetoric is in the anti-system creed … "Don't trust the system." Don't trust anyone, they told us. But this is bullshit. When CBD went mainstream in 2017, it appended a new line: "trust us." via clever old-school marketing techniques.
Many CBD companies — now in the grip of an old-economy bank run — operate on the same model as the snake oil salesmen. You give them your "money," they engage in complex marketing and research jargon with it, and you trust that they can/will offer you the solution you have been seeking to live your best life.
Why has CBD abandoned trustworthiness and quality? Well … trustworthiness and quality don't come cheap.
A good-standing CBD product must undergo a full panel of costly tests from farm to table. Most typical marketing avenues are blocked at best; thus, the cost of bringing quality products to market is prohibitive. Also, the lack of a unified regulatory order does not help other partners support the effort.
Yet, the market demand is there for CBD, but the public is unaware of the complexities a quality product faces, and for many companies, cutting corners is becoming a standard practice. We as consumers depend on companies to provide more than just Trust: security, convenience, customer assistance, etc. Companies need to make customer interfaces intuitive and navigable, help you understand what you need, and deliver products. These services provide value, and that comes at a price. Competition and innovation can reduce the cost of Trust (stagecoach vs. SWIFT), but they do not eliminate the bad players that can ignore the rules and neglect good practices.
The CBD mania for a plant-based solution led us to believe we could innovate away from Trust's tiresome and expensive infrastructure. As we wake from that misguided trip, it's worth asking a long repeated central question: Who to trust? And what is the actual cost of quality?
Most transactions present ample data for a rational answer. If we were rational actors, we would weigh that data and proceed accordingly. But desire clouds the equation. If we want something enough, our tolerance for lousy quality goes up fast. When it's midnight at the airport, you've been on the road for a week, and the line for licensed taxis home is 40 minutes long, the driver hanging around baggage claim looks increasingly trustworthy. Desire and desperation offer rationalizations instead of rationality: You don't know anyone who's been robbed by an unlicensed driver, you've heard taxi medallions are controlled by organized crime, you've got a good eye for people … you'll be fine. Desire is essential to human experience, but it does lead to bad choices in Trust.
Who Do You Trust?
Trust is expensive, which is another way to say it's valuable. Some aspects are free — among the most valuable assets you can have are being truthful and demonstrating competence. We're in an era of overpromising, and it often feels like there are few consequences for exaggerating or just outright lying. The richest man in the world has been overpromising what his (very good) cars can do for years. The truth is like air trapped underwater. Eventually, everything will come to the surface.
Ultimately, we all go forward together abiding by ethical/quality standards, or we set things back decades.
People work for, invest in, and meet with us because they believe they can (mostly) trust us. Millions depend on us; we get it right. Finally, after almost 100 years of demonizing and marginalizing hemp, history is on our side. We owe it to those that have come, are here, and will come to help people live their best life.