According to research conducted by the Brightfield Group, the CBD market is expected to reach $22 billion by 2022. With the expansion of the CBD industry and the increased demand for products containing cannabidiol, consumers are often left struggling with the high costs associated with CBD products

To be able to fully understand why CBD is so expensive, we need to take a closer look at the numerous costs that go into the process of making CBD products. 

Hemp farming costs

Industrial hemp is an agricultural plant and, as such, needs to be properly planted and cultivated. That means that producers have to purchase seeds of a quality, CBD-rich cannabis strain, invest in the necessary cultivation equipment, as well as hire laborers to help farm the hemp. 

Moreover, each state, county, and the city has a unique set of cannabis growing requirements, licenses, testing costs and certification programs that producers are required to have in order to be considered as legal cannabis growers. 

In addition, the actual process of farming and cultivating quality hemp is quite expensive due to specific temperatures and moisture levels required for quality yields. It is sometimes impossible to meet such requirements without investing in indoor farming equipment, such as artificial lights and ventilation systems that come with a hefty price tag. 

CBD extraction and manufacturing costs

Once the hemp is harvested, the components of a hemp plant stem are first separated in the process called decortication. The next step is CBD extraction, and this can be done through an ethanol extraction or supercritical CO2 extraction. 

The ethanol extraction process is a fairly simple procedure that uses alcohol to isolate cannabinoids from the plant. This is done by creating a mixture of ethanol and hemp, which is then distilled until ethanol evaporates. Although the procedure itself is not so expensive and allows for the production of large batches, CBD oils extracted with ethanol are usually less potent.

On the other hand, the CO2 extraction process is quite expensive, since it requires a controlled environment and expensive equipment, as well as skilled workers that know how to operate such elaborate machinery. The procedure uses pressurized CO2 for cannabidiol extraction, which results in small batches of a powerful CBD oil of the highest quality. 

When the process of CBD extraction is complete, the concentrate needs to be further purified in order to create a clean and potent CBD tincture. Firstly, the concentrate goes through decarboxylation – the process which helps remove the unwanted acids from the oil. After that, certain plant properties, such as lipids, chlorophyll, terpenes, and waxes are removed from the tincture in a process called winterization. Then, the concentrate is left in a quality coconut or hemp oil, that serve to add taste and texture to the CBD product. It is worth mentioning that these oils are not cheap and that both decarboxylation and winterization require investing in high-priced specialized equipment.

Lab testing costs

Once the CBD product is finished, it needs to go through extensive lab testing procedures and governmental food and drug checks that serve to assess the quality, safety, and purity of the product, as well as the CBD concentration levels present in the tincture. 

Depending on the country, rules and regulations regarding CBD testing procedures may differ, but what they have in common is the high cost of acquiring all the necessary accreditations. 

Legal expenses, taxes and banking costs

Even though extracting and manufacturing of CBD incur the highest costs, expenses that arise from taxes, administration, and legal services are certainly not negligible. 

To begin with, due to being regarded as high-risk businesses, CBD companies have limited banking and insurance options, loans, and credit card processing solutions. What is more, the ones available are usually less favorable and more expensive, which just adds to the already vast expenses.

Moreover, CBD companies usually have an in-house compliance officer and a lawyer, who make sure that the company follows specific laws and regulations of a particular country, state or city. The compliance officer also ensures that CBD levels are in accordance with the label of the product, while the lawyer keeps track of the possible legal changes. 

Conclusion

Why is CBD oil so expensive? is the question that bothers many cannabinoid consumers and that can be answered only by taking into consideration all the expenses related to growing, cultivating, extracting, manufacturing, and distributing CBD products. 

Making a potent CBD product of the highest-quality is not considered cheap by any means, so the final price should not come as a surprise. After all, the price only reflects the high costs of CBD production and distribution that manufacturers, distributors, and retailers are faced with.

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