Why is CBD Oil So Expensive? 5 Reasons

One of the first questions we normally get when people are asking us about CBD is “Why is it CBD Oil so Expensive?” We totally get this, without any knowledge about the product the cost of CBD seems excessive to say the least.

There are a handful of things that cause this high price, from the cannabis strain that CBD is made from, the manufacturing methods used to make a product you can use, and several other outside factors.

We’ve done our best to break down the cost of CBD, as well as some of the reasons for the disparity in pricing between certain companies so pay attention for a few minutes and we’ll tell you what we know!

1. Growing Hemp is Challenging

The first reason for the cost of CBD Oil is the plant that is CBD comes from. Hemp.

Especially in the Untied States there is still a fairly small number of states that allow sizable crops of hemp to be grown. Even in these states, it is a new grow crop and optimal growing practices have not been established

Most of these states also require a license to purchased so they can control the number of growers in the state. If you’re lucky enough to get a license, then you a subject to a tax on the plant as well. 

You can also buy your hemp or cannabis, but either way… the cost of acquiring the product itself is not cheap.

2. Manufacturing CBD Oil is an Intensive Process

After you’ve got your crop, you need to extract the CBD Oil. Most manufacturers use either an ethanol based or CO2 based extraction method. Both processes require multiple steps and machinery, which of course costs more money.

The ethanol based extraction is a bit cheaper, and is easier to scale. Most of the best companies opt for CO2 extraction, as you are able to get more substance out of your hemp, leading to higher quality products.

Once you finish this extraction process, you have a full spectrum CBD product. If you want to extract the THC, or make a CBD isolate, another few steps need to be taken.

All of this adds to the already high cost of the Hemp plant in the first place

Watch Out for Fake CBD Products

Currently CBD sellers are operating and investing in an unregulated market with not enough customer information. This means that many companies can and do cut the high quality hemp and expensive manufacturing processes.

Right now there are no state or FDA laws regulating CBD Oil. In fact, a 2015 study by the FDA in California tested 26 East Coast CBD products and found many contained little to no CBD….

Another study by a Penn Medicine researcher published in JAMA found that nearly 70% of all CBD products are mislabeled.

With that in mind, a team that wants to spend a bunch of money on marketing, packaging, and a sales team can turn a $2 bottle of Oil with very little CBD into a $300 miracle Pure CBD High Quality heal all cure!

Make sure to shop from trusted brands that have a history of high quality CBD and the 3rd party lab tests to back up the contents of their product!

3. Difficulties in Marketing and Distribution

Until the 2018 Farm Bill was passed CBD, THC, and all other components of the cannabis plant were a Schedule 1 Drug. In this bill the restrictions on hemp where significantly reduced.

Even after that law passed, many major retailers, including gas stations, food chains, and drug stores refused to stock CBD. The stigma around cannabis is still too strong and is seen as potentially harmful for business.

On the same note, most search engines and news networks ban any sort of CBD advertisement.

Not only is it hard to find a place to sell your CBD once it’s manufactured, it can be difficult to get the word out about it. Both of these factors drive the price of CBD up.

4. Banks Won’t Support CBD Businesses

Financial service providers tend to take a risk-adverse stance on anything new, trendy, or unknown, and the CBD business definitely falls in that category.

We know several CBD companies that do all of their banking outside of the US because local banks will not give them basic business accounts. Those that are given basic accounts often have to fight for lines of credit or payment processing options.

All these extra steps to accept payments, manage business finances, and get loans lead them to using more expensive options like off-shore banking or private lending. Another factor in the high costs of CBD.

5. Greed

This factor brings us to our last factor as well. Greed.

Unfortunately, we are in the “Wild West” days of medical CBD and Cannabis products. An unregulated market and a generally uniformed consumer base leads to some people believing they can take advantage of the situation.

In the last few years we’ve seen the market has start to regulate itself and organizations like the Hemp Roundtable come together to lead the way to industry wide regulation and fair play.

Final thoughts on Why CBD Oil is so Expensive

When you learn the reasons behind the cost of CBD, it makes a lot more sense as to why the best products don’t come cheap. So, when shopping for CBD Oil take your time, do your research, and learn as much as you can!

Check out our best CBD brands page for our recommendations for products and brands you can trust!