Recreational cannabis use is illegal in the majority of US states, but the relaxation of hemp and CBD sales has created a set of companies that could more easily grab cannabis product market share if it is legalized. Companies selling CBD products are establishing their brands among consumers, and acquiring shelf space and retail relationships. If recreational cannabis is legalized, those companies can enter that market more quickly than a business starting from scratch.
From a product perspective, companies are looking to establish their CBD brands as consistent and effective, so when THC comes along, consumers will seek them out for safe products. Reliable quality is key to establishing that connection with consumers according to Rick Batenburg III, chairman of Clear Cannabis, Inc., parent company of The Clear .
Using CBD products as an onramp to a marijuana business also makes sense from a cash-flow perspective. When a state legalizes cannabis and announces a future date for its sale, companies need to hire employees, rent space, find distribution etc. There can be delays in licensing and other issues. Selling hemp-based CBD products while the company waits for the THC business to kick in, provides an income stream to draw from.