Where’s Walmart? Opening of Canadian CBD Market Prompts Speculation About Retail Giant

By William Sumner, Hemp Business Journal Contributor

Last month, rumors emerged that Walmart’s Canada division was conducting preliminary investigations into stocking its stores with CBD products, a move many consider to be inspired by Canada’s legalizing adult-use cannabis sales.

Though details are not forthcoming, the very rumor of Walmart’s making moves into the CBD market gave the company’s stock a brief but considerable 2.5% bump in its share price on the day the story broke. Despite significant interest both from news organizations and investors, Walmart has remained quiet about its plans, and continues to give the same response to inquiries:

“As we would for any new industry, Walmart Canada has done some preliminary fact-finding on this issue, but we do not have plans to carry CBD products at this time.”

Amid the speculation, Walmart joins a growing list of large-scale retail chains and companies that have begun to flirt with the idea of selling CBD. Last year, Target gained national attention after it briefly sold CBD oil in its online store, but quickly discontinued sales.

Rumors also swirled around the national convenience chain 7-Eleven after the CBD company Phoenix Tears claimed that it had signed an agreement with the company to offer its products in stores nationwide, a claim soon proven false.

Most recently, however, the biggest company to express interest in the CBD market was beverage giant Coca-Cola. In September, news broke that Coca-Cola was purportedly in “serious talks” with Aurora Cannabis to develop a line of CBD-infused beverages. The move held significance because, in addition to producing cannabis, Aurora most recently acquired Europe’s largest hemp producer; giving credence to the idea that Coke might be looking for a study supply of CBD.

If Walmart is seeming coy about whether will start selling CBD products, the decision would mean a significant breakthrough for the CBD market. The Hemp Business Journal estimates that by 2022 the CBD market will reach roughly $2 billion in sales; with about a third coming from cannabis, another third coming from hemp, and a final third coming from the pharmaceutical industry. The extent of the growth in the market will be driven by mass market retailers like Walmart, Target and Amazon entering the market.

By legalizing its nationwide adult-use market on October 17, Canada became the first G-7 nation to do so. The move also enabled Canadian hemp producers to sell hemp flower to cannabis processors for CBD extraction; they had previously been limited to marketing hemp fibers and seeds rather than the cannabinoid-intense flower.

Operating in more than 11,700 stores in 28 countries, Walmart serves approximately 270 million customers a week, bringing in roughly $500 billion annually. Should Walmart decide to start selling CBD products, it could command a significant share of the market and will push CBD sales quickly higher. Should Walmart wade into the CBD market, the next question many are left wondering is how the company will go about it. Which company or companies would they choose? There are a few possible scenarios.

Walmart could choose to partner with an established CBD brand like CW Hemp. As one of the largest hemp companies in the United States, CW Hemp already has a strong brand recognition thanks to Sanjay Gupta’s documentary “Weed”, and is already the brand of choice for retail chains like Lucky’s Market. Furthermore, when Target briefly sold CBD oil, CW Hemp was the brand of choice. That is something Walmart would notice.

Although not as well-known nationally, another possible brand is CV Sciences’ PlusCBDoil. CV Sciences is one of CW Hemp’s closest competitors and already has a strong customer base. Other hemp-derived CBD brands to watch for entry into Walmart are Functional Remedies, Elixinol and Pure Kind Botanicals, but smaller brands like these will need to prove to Walmart they can source enough products to meet consumer demand.

Walmart may also decide to go with one of the hemp brands that it already does business with. Although Walmart does not sell CBD products, it does sell a variety of hemp-derived products; such as hemp oil, hemp soap, and hemp fiber. Some hemp brands include Manitoba Harvest, Dr. Bronners, Nutiva, HEMPZ, and Navitas Organics.

At present, none of these large hemp companies sell CBD-related products, but look for some of them to start in 2019 as several leading brands look to expand their product offering into hemp-derived CBD to capitalize on mass market distribution opportunities. For now, all eyes are on the Farm Bill and FDA to give mass markets retailers, like Walmart, the green light to begin selling hemp products with CBD.

J.J. McCoy, New Frontier Data Senior Managing Editor

William Sumner

William Sumner is a writer for the hemp and cannabis industry. Hailing from Panama City, Florida, William covers various topics such as hemp legislation, investment, and business. William’s writing has appeared in publications such as Green Market Report, Civilized, and MJINews. You can follow William on Twitter: @W_Sumner.