Rocked by a global pandemic and its resulting economic havoc, thousands of CBD companies in the United States will likely shutter in 2020 – but the CBD market will remain flooded with some 1,500 brands jostling for market share, according to cannabis research firm Brightfield Group.

The top 20 over-the-counter CBD companies accounted for just 17% of the overall CBD market in early 2020, with some 3,000 other competitors crowding 77% of the market, the firm estimated in a report released last week.

The largest CBD producer, London’s GW Pharmaceuticals, makes prescription CBD medicines and accounted for the final 6% of U.S. CBD sales, according to Brightfield’s count.

The flooded market is a result of entrepreneurial enthusiasm for a booming trend with few established brands. Throughout 2019, the CBD market saw so many new CBD market participants that those earning less than $1 million in annual revenues occupy over 97% of the market, Brightfield concluded.

Too many players

But the crowd of CBD companies is going to thin substantially in 2020, with COVID-19 driving a likely “extinction event” for half or more of those companies, said Bethany Gomez, managing director of the Florida-based research firm.

Bethany Gomez

“A lot of companies that were kind of dabbling in the category have found it to be unsustainable for them,” Gomez said. “A lot of brands that had tried this out, it’s not something that they’ve been able to turn a profit on.”

As one would expect, the most established brands are best positioned to survive market contraction.

Gomez told Hemp Industry Daily that coronavirus disruptions to conventional retailers means that established players will likely grab share – even as overall consumer spending on CBD remains surprisingly consistent.

“With retail outlets closing their doors around the country, it has made it persistently difficult for a lot of brands to be able to scale and to reach their ambitions there. And it really favors the larger brands in the market,” she said.

Survival strategies

Jennifer Culpepper

Not all new CBD startups are discouraged by the flood of competitors.

For Jennifer Culpepper, who helped launch CBD skincare line i+i Botanicals in mid-2019, the market was already crowded.

“Our biggest challenge is to find our positioning and where we differentiate ourselves from other brands,” said Culpepper, who is based in Maryland.

Her firm settled on highlighting the brand’s mission to deliver CBD products that work for women of all races. She argued out that staking out a brand identity in CBD skincare is easier than for some other CBD products.

“How do you differentiate your CBD in a tincture?” she said. “We think of ourselves as a skin-care or self-care company that uses CBD as ingredient. That’s what sets us apart.”

The strategy is proven by Brightfield’s research, which notes that traditional CBD products – tinctures and gummies – are slipping in terms of market share.

“The market is no longer entirely dominated by sufferers of extreme pain or epilepsy who must go to great lengths to attain product, nor primarily by cannabis consumers,” Brightfield reported.

“Today, CBD products emerging are similar to multi-vitamins, La Croix Sparkling Water, or Bengay, and are beginning to overtake what has historically dominated the CBD market,” the report concluded.

The good news

Brightfield’s analysis did show some positive signs for CBD makers – notably that sales overall haven’t substantially slipped during the pandemic.

The sector’s resilience is especially encouraging given national uncertainty about the economy and the level of unemployment enhancements the federal government stopped paying last week, Gomez said.

“As we look at consumer behavior … people do not want to be without these products, right? They really rely on these products more than ever.”

In fact, she said, many people during the coronavirus pandemic are turning toward THC and CBD products rather than alcohol to treat their anxiety, depression and chronic pain.

“None of those issues are going away. And they’re a lot more heightened in the middle of a global pandemic.”

Marijuana Business Daily reporter Jeff Smith contributed to this story.

Kristen Nichols can be reached at