Automatic_Merchandiser_February-March_2020 - 16

ing for natural ways,
homeopathic care," said
Josh Rosenberg, CEO
of PLNTSOP, a lifestyle
brands company that
supports company-owned
assets and partnered
brands as a fractional
sales and marketing
148818469 | Igor Zakharevich |
agency. PLNTSOP, or
Dreamstime.com
"Plants Optimizing
People," manages a portfolio of finished
goods including organic coffees and
teas, unattended retail equipment,
clean meals on-the-go, and consumerand pet-focused supplements through
ecommerce, B2B and traditional retail.
"They're having success with it,
and because it's working, consumers
- through word of mouth, personal
use, personal success - are making the
choice to opt in by saying, 'I want to use
it.' So demand is going to create growth,
which continues to drive availability well
ahead of the government's position on
what role it should play within our body
and our ecosystem," Rosenberg added.
OPPORTUNITIES AVAILABLE

Operators who want to sell CBD products to respond to consumer demand
need to follow applicable laws. Ben
Hoskins, corporate category manager
at Vistar, noted the opportunity of CBD
retail requires thought leadership.
"There's quite a bit of learning we
all need to do as an industry toward
defining exactly how big this can be
in automatic retail," he said. "FDA
regulations concerning the sale of CBD
products is a critical step. Congress
legalized CBD almost two years ago. I
don't have insight into how long FDA
regulations will take, but very clearly,
the consumer has stood up and showed
CBD products are a commercially
viable option for businesses."
Vistar has made CBD products
available for sale to all the operators it
works with, Hoskins said. It has about
125 SKUs that are activated and ready

to sell, and about 15 that are part of its
"core set." Offerings include consumables in snack and beverage form
and topical products like lotions and
nutraceuticals.
"Operators have to be very aware of
the state and federal regulators while
having a proper understanding of what
is law versus what is recommended by
the FDA," Rosenberg said. "It's really
simple: Do not make a claim, and
make sure what the product says it is
in the bottle is what it really is. Those
are the two areas where the 'wild wild
west' of CBD entry with organizations [that] are bending or breaking
the rules. And that's why you have
so much controversy about CBD in
general, because people are being, in
a sense, hoaxed by CBD brands that
say, 'I can reduce your stress, take my
CBD.' And that's against the law."
If operators follow the law, selling
CBD can become an incremental
source of revenue.
"As long as operators understand
the rules of engagement, they can be
in a very strong position to capture
this revenue stream," he said. "There's
controversy in opinion, but no risk if
operators follow the regulatory agencies and their positions at the state and
federal level. No one wants to break
the law, so get informed before taking
action. There are plenty of high-margin, high-use CBD products that operators can bring into their retail footprint
without having any risk."
Rosenberg said convenience
retailers have had success selling CBD
gummies, topicals, hemp cigarettes and
beverages. While ingestibles are not
supported at the federal level, many
retailers are starting to follow state laws
over the federal regulations.
"Convenience retail, on average,
sells seven packs of [CBD] gummies a
week, at an average retail selling price
of $20 per pack," he said.
Consumable beverages containing
CBD are also doing well, with an aver-

Automatic Merchandiser * February/March 2020

age of four to five turns each day per
brand, Rosenberg said.
Ryan Mack, director of food service
at CBD products manufacturer Weller,
said that Weller's sparkling water
infused with CBD is a big hit.
"Sparkling water is popular and
CBD is popular, so that's a marriage
made in heaven," Mack said.
He added that it's also a convenient
package. "Employees already have a
sparkling water at their desks, so if they
can have CBD in it, the more the merrier," he said.
Miguel Martin, president and
CEO of Reliva CBD, said that based
on market research company IRI's
fourth quarter 2019 CBD data report,
gummies and tinctures are the leading
forms of CBD products, accounting for
roughly 50% of sales among all retail
channels. He encouraged operators to
offer an assortment of products that are
attractive to consumers.
PRECAUTIONS TO TAKE

Nevertheless, sobering complications remain, which operators need to
address in order to sell CBD products.
Rosenberg advises operators to do
their research to understand what laws
apply to them, decide what's best based
on their understanding of the laws
and work with a credible, educated
company that has their best interests
in mind.
"There are a lot of supply chain
providers out there that are representing
finished products without proper certificates of authenticity, labeling or liability
insurance," he said. "Hold your supply
chain accountable to these norms."
Martin advises that operators
work with a trusted wholesaler of
CBD products as there is a significant
amount of variance in the quality and
compliance protocols between CBD
manufacturers. Wholesalers have their
own testing, insurance, indemnification and regulatory review processes to
protect retailers. Given the complexity

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