EXCLUSIVE: Are Topicals An Untapped Market For CPG Brands In The Cannabis Industry?

Cannabis topicals may be a small slice of the market, but with a potential for growth, they offer a unique opportunity for CPG brands and investors.

With CBD topicals already gaining traction in the mainstream market, there may be significant economic opportunities for those willing to invest.

The Beginner's Gateway to Cannabis

Topicals are a niche market in the cannabis industry, making up only 0.6% of sales in 2022. Despite this, Rick Maturo, director of analytics at BDSA, believes there is potential for growth in the category.

Pain relief is the primary reason people use topicals, but most products do not produce the psychoactive effects people associate with cannabis. Additionally, unlike smoking or edibles, there is no taste or flavor profile to enjoy.

Maturo said that topicals could be an attractive entry point for those new to cannabis or hesitant to try other products. A person can still explore the cannabis category without getting high or potentially overdoing it.

Moreover, most people intuitively know how to use topicals, making it a familiar and easy product to use.

An Opportunity For CPG Brands

Maturo suggested topicals still have the potential to be lucrative for those exploring the market.

"A good entry into the category would also say that you know, when we're talking about topical products, it is something that most people intuitively know how to do... You rub it on the place that hurts... For people that maybe are more budget conscious... some of those topical products can be a little bit more bang for your buck in terms of the number of usage occasions that you can actually get from them," Maturo explained. 

CBD topicals, in particular, have had a moment in the CPG industry, with many products appearing on mainstream retailer shelves. This suggests that there is interest in topicals outside of the regulated cannabis industry and that they have a unique appeal and potential for growth.

As more people become interested in the cannabis industry, topicals could serve as an accessible and easy-to-use entry point.

While topicals may not produce the same effects as smoking or edibles, they offer a familiar and accessible way to explore the market, and those willing to invest in the category could reap the rewards.

With the potential for growth in the category, there may be opportunities for businesses and entrepreneurs to create more appealing and effective topicals that could attract a broader audience.

“As the cannabis industry continues to evolve, topicals may become a more significant player in the market,” Maturo said.

Photo: Dylan McLeod via Unsplash.