These companies offer a wide range of products. We see traditional tinctures that first dominated the CBD market, as well as beauty products with added functional ingredients like collagen. The successes of these companies should be noted by mainstream direct selling beauty companies – like Mary Kay and Avon. Once the US Food and Drug Administration makes its final ruling on hemp, these larger direct sellers could jump in CBD as a functional ingredient.
One example of a successful CBD MLM is Medical Marijuana Inc. The company is one of today’s largest hemp CBD manufacturers. It receives most of its revenues through its MLM arm, Kannaway . The company has also spread to Latin America. In this region, direct sales is a very strong channel and shows strong potential in the longer term.
The ongoing COVID-19 pandemic has caused extra stress for consumers, and despite the expense, many did not give up their CBD use! However, with retail outlets closing and new deals online to attract consumers, the CBD industry experienced shifts in purchasing channels.
Growth Drivers for CBD Direct Sales
The CBD phenomenon started almost exclusively due to word-of-mouth marketing, making this channel an excellent fit for direct selling. In 2020, 38% of CBD consumers report they first learned about CBD through friends or family. By contracting an army of “brand ambassadors” to promote and distribute, this is one of the most effective advertising methods available to this regulated industry.
Direct selling CBD companies effectively harness the power of word-of-mouth marketing. It can be a powerful tool in an industry limited in its formal and social media advertising. Brands contract “affiliates” or “brand ambassadors” to distribute or advertise products and earn their own commissions.
One purchasing channel that continues to see sales while flying under the radar is direct selling. In 2020, 13% of CBD consumers reported purchasing from direct sellers. This channel is also referred to as “multi-level-marketing,” MLMs, or network marketing.
Other companies, such as Hempworx , Koi CBD , and Prime My Body have experienced vast growth using the MLM model as well.
Under the leadership of new CEO Blake Schroeder, Kannaway™ is looking to pursue an expanded presence of their business model both domestically and internationally. Medical Marijuana, Inc. has made it our mission for hemp-based cannabinoids to become a staple in modern diets. With so much potential within this growing industry, we are proud to give people in the U.S. and around the globe an opportunity to grow their own health-focused canna-businesses under the Kannaway™ model.
Kannaway’s CBD hemp oil products were also the first cannabis based products introduced to Puerto Rico when the company launched on the island. Through a series of education and press events, Kannaway™ was able to excite a dialog across the island on the benefits of CBD hemp oil and cannabis. Just 233 days after Kannaway™’s launch, the governor of Puerto Rico announced his intentions to legalize medical marijuana in the territory. The effort put into Puerto Rico, the U.S., and nations around the world earned Kannaway™ a nod as Start-up of the year in 2014 from the Academy of Multi-level Marketing.
The Hemp Network provided the first marketing vehicle for global distribution of hemp products, helping Medical Marijuana, Inc. expand its market share for CBD hemp oil. Then in 2014, Kannaway™ was launched as a network marketing company to educate thousands about the benefits of cannabinoids. The company has successfully distributed cannabis product lines including CBD vaporizers from HempVAP®, a skincare line from Cannabis Beauty Defined®, and Rev!ve® products, through an experienced team of network representatives.
Shop Kannaway™’s brands in our store, or visit the Kannaway™ website to learn how to become a brand ambassador.
“With an ingredient that is as easily misunderstood as CBD, the direct selling channel may prove to be the perfect fit for companies seeking channels of distribution,” says Eliason. “Direct sellers and network marketers are known for their one-on-one training and education methods that can meet the consumer on a personal level even if it’s the first time they’ve heard of CBD oil. That personal connection and ability to address specific misconceptions has the potential to create a loyal customer base.”
PLANO, Texas–( BUSINESS WIRE )–Direct selling companies will sell $300 million worth of cannabidiol-related products in 2018, making direct selling the largest channel of distribution for the rapidly growing CBD product sector.
About Direct Selling News
“Interest in cannabidiol, or CBD, is rapidly transforming the consumer product landscape,” says Todd Eliason, publisher and editor in chief of Direct Selling News (DSN), which conducted the research. “The trends also indicate that global direct selling sales of CBD products could exceed $1 billion by 2020. Established companies as well as a growing number of startups have begun announcing their entry into the market.”
In its most recent study, Direct Selling News has identified at least 25 direct selling companies that already have entered the CBD space. These companies, sometimes referred to as network marketing companies, all opt to use a network of independent salespeople to sell their products, often on a person-to-person basis, rather than a more traditional retail channel of distribution. They include, but are not limited to: Kannaway, the direct selling arm of California-based Medical Marijuana Inc. (OTC: MJNA); and California-based Youngevity International (NASDAQ: YGYI), which is currently ranked at No. 89 on the DSN Global 100 list of the world’s largest direct selling companies.
Direct Selling News will be exploring the many factors related to direct selling companies’ leading role in the CBD market in an upcoming edition of the magazine as well as at a Nov. 6 CBD Symposium it is co-hosting with parent company SUCCESS Partners at its Plano, Texas headquarters.
CBD is one of the hundreds of cannabinoids found in the Cannabis sativa plant. The ingredient is being credited with a growing list of health benefits and, as a result, companies from virtually every consumable category, including beverages, dietary supplements, skin care and pet products, are actively exploring business in the market.