Page 14 - HME Business, January/February 2020

CBD: SUCCEEDING BY LEADING
And make no mistake, the CBD opportunity
is massive. According to market researchers the Brightfield Group, the global CBD market could expand to $22 billion by 2022. Another study from Cowen and Company projects the U.S. CBD market to hit roughly $16 billion by 2025. Low or high — take your pick — those estimates speak to considerable existing market demand that will only grow over the near term.
The opportunity is definitely there for HME providers, according to Jonathan Fedele, CEO of CBD product maker PurWell, who adds that HME providers that do enter the CBD marketplace see steady sales volume. As a CBD product maker, Fedele comes at the HME industry from a knowl- edgeable standpoint: He owned a multi-location HME provider business in Florida. From there, he opened a home health agency and then started sleep and respirator testing company VirtuOx Inc.
“It’s a great product for an HME retailer in that it’s a cash sale and they’re creating a recurrent revenue or a repeat customer,” What we find is that about 60 percent of our [provider] customers who try the product come back and reorder it either every month or every 60 days.”
And the CBD-related traffic that providers attract has a modifier effect on the store’s retail traffic, because HME patients aren’t only looking for CBD, and CBD customers will likely have other,
HME-related needs. Essentially, it’s the kind of feedback loop you want to have.
“The more foot traffic they have, the more repeat customers they have,” Fedele explains. “Not only are they going to gain sales from
the CBD, but if those, maybe the next time the customer comes in, they also needed a walker or they need a knee brace or whatever. So it’s an opportunity to increase foot traffic and build a revenue stream, not only through the CBD sales, but also through other product sales, given the benefit of having the increased foot traffic.”
However, many patients are a little mystified by CBD. Who can blame them? CBD is in everything from lotions, to cosmetics, to dog food. They’ve heard that CBD might be able to help them,
but they aren’t sure how, they don’t know what products are right for their needs, and, because they’re seeing it for sale in every place from the local beauty salon to the check-out counter at the local mini-mart, they might be a little skeptical of what’s being offered. Mix in the fact that CBD is associated with a plant that has been a bogeyman of America’s War on Drugs since the release of “Reefer Madness” and consumer hesitation is understandable.
These customers need an expert to guide them, and no local business is better positioned to do that than an HME provider, especially given that HME providers already work with so many patients and customer groups that could benefit from CBD. So how should providers get started?
UNDERSTANDING THE PRODUCT
One of the key ways that providers establish their expertise is by understanding the product solutions available to help their customers and referral partners. So let’s learn a little bit more about CBD products. For starters, what do those three letters stand for?
CBD is one of the compounds called cannabi- noids that are produced by the cannabis plant. The first cannabinoid most everyone has heard of is THC, the psychoactive component in recreational marijuana. CBD, also known as cannabidiol, is the cannabinoid often used in managing pain issues, as well as insomnia and sometimes anxiety.
CBD products are sold in varying dosages that might or might not contain very small percent- ages of THC, as well. The products range from oil tinctures taken under the tongue, capsules, gummies and lotions. Consumers can buy
them online and, depending on what state a person lives in, he or she can buy it at retail establishments.
In addition to the dosage amount and delivery, there are two “schools” of CBD products. There are products that are based on CBD isolate,
Want to get established in the CBD market? Position your business to be an expert resource with the knowledge and ideas
to lead your customers through the array of product options.
BF
point, many HME clients aren’t sure where to
begin. That fact puts your HME provider business in an ideal position to capitalize on the massive CBD market opportunity.
y David Kopf
or most providers — and their customers — the CBD can seem like strange territory. Because CBD originates from the oft- maligned cannabis plant, and because it’s more akin to a nutritional supplement than a drug from a regulatory stand-
14 HMEBusiness | January/February 2020 | hme-business.com Management Solutions | Technology | Products