CBD Oil Price 101: What Goes into the Cost of CBD?

If you’re new to the world of CBD, you might be wondering “what gives?” when it comes to pricing.

CBD Oil is comprised of, you guessed it, CBD (or Cannabidiol). This compound is just one of thousands of cannabinoids found in both the marijuana and hemp plant. Unlike THC, CBD has no psychedelic effect on the brain, i.e. the user does not experience a high.

Instead, CBD’s prized attribute are its myriad of health benefits, ranging from pain relief, anxiety reduction, neuroprotective properties and relief from harsh side effects for cancer patients undergoing treatment.

New studies come out regularly that suggest an even more vast range of health benefits of CBD and we are still only beginning to learn of its potential uses.

It’s ease of use is also a draw for those who may not want to smoke marijuana containing THC. It’s highly versatile in both oil tincture and capsule form that can be added to any beverage or taken straight. You can even cook with it or simply vape it.

CBD is now 50-state legal unlike it’s ‘high’-producing counterpart, so you can get it just about anywhere these days. You might have noticed by now that CBD oils from different companies and in different forms vary widely and the differences can be confusing to say the least.

Here, we look into the details of how CBD oil price is calculated and why it seems to vary so widely, so you can make informed decisions for a CBD oil treatment plan that is right you.

1. CBD oil price varies widely based on hemp source and quality.

The quality and method of growing hemp to create CBD can have a drastic effect on how potent the resulting CBD oil is. Experienced hemp growers carefully create specific strains to produce the highest quality CBD oil, and therefore, garner the highest prices per ounce.

Some Hemp farmers are concerned primarily with getting the lowest cost possible on the raw product, and therefore the quality of the CBD oil will inevitably suffer. Producers that maintain direct relationships with Hemp farmers and purchase organically grown, top quality hemp will produce a higher quality (and higher priced) end result.

Hemp grown in the United States is also going to produce higher priced and higher quality CBD oil due to the nutrient rich soil it’s grown in and the more rigid standards to which growers have to adhere to.

2. It’s all in the extraction.

Using a liquid solvent like ethanol or alcohol is the cheapest and easiest extraction method for CBD, as it is the fastest and the cost of ethanol, butane, and alcohol are low. However, this process destroys elements of the plant that are known to be beneficial for your health and is much more dangerous to the workers facilitating the process (the alcohol used is highly flammable). It also results in some toxic chemical compounds winding up in the CBD oil from the manufacturing process.

Olive oil is the second preferred method of extraction as it is safe to process and doesn’t destroy as many elemental compounds of the hemp plant. The oil that is produced is perishable, however, and has to be stored in a cool, dark place. The CBD oil produced with this extraction method is also less concentrated as a result, and the user needs to ingest more of it to get the same benefit.

CO2 extraction is the latest technology for CBD extraction, and also the most expensive. It is done on a machine called a ‘closed loop extractor’ (https://www.projectcbd.org/guidance/cannabis-oil-extraction) with three chambers that requires a high level of skill and knowledge on the part of the producer. It uses high pressure under low temperatures to extract a pure, potent CBD oil that is free of chlorophyll and extremely high quality.

3. Has the CBD oil been tested by a third party lab?

CBD oil that has been tested and approved for its contents by a third party lab is inherently going to be more expensive because the company pays for additional testing.

This is worth the added cost, because it ultimately guarantees you’re getting the right potency. It’s important to look for a Certificate of Analysis before you purchase CBD, especially if it’s online. If a company isn’t willing to produce lab test reports on its products, it’s a red flag.

4. What type of CBD is being used?

Here we get into the nitty gritty: there are dozens of different types of CBD that can be extracted and produced into CBD oil. In short, they can be categorized as full spectrum, broad spectrum, and CBD isolate.

CBD Isolate is the purest form of CBD, resulting in 99% purity. Full Spectrum CBD refers to CBD that was extracted from the hemp plant along with other compounds including THC. Lastly, broad spectrum is a mix of the two, without THC (essentially just full spectrum CBD without the THC).

Your specific needs can vary based on the legalities of the state you live in and your specific targeted health needs. Pure CBD is the most versatile as it’s legal in all 50 states and can be guaranteed pure with labelled potency. It’s also the most expensive to produce.

5. Reputation matters.

When it all boils down to it, you have to ask yourself if a higher quality CBD oil from a reputable source is worth those extra pennies. If you’re shopping for CBD and wondering why the prices vary so widely, reputation of the company always plays a part.

Aside from quality of the ingredients, extraction methods used, the type of CBD and third-party testing, reputation comes into play. You get what you pay for is true

To Sum Up

CBD oil price on the market sometimes feels like a maze of irregularities.

It’s worth your time to do some research and make sure that A. you’re getting a high quality CBD oil for the price you are paying and B. the higher cost you pay is justified and backed up through lab testing, reputation, and verifiable sourcing practices.

With increasing popularity and diverse applications, it’s crucial to understand what contributes to the cost of CBD oil. Here are the key factors:

  1. Market Trends and Legal Landscape: Since the passage of the 2018 Farm Bill in the U.S., which legalized hemp CBD for use in non-food items, there has been significant growth in the CBD market. Products range from personal care items to supplements and household products. However, in 2023, sales of hemp CBD products declined by 10% in traditional retail channels in the U.S., possibly due to inflation impacting consumer purchasing decisions.
  2. Hemp Prices and Production: The wholesale prices for various CBD products, including CBD biomass and extracts, have shown stability in early 2023, despite a pullback in production. For instance, the price for Full Spectrum CBD Distillate rose by 22% year-on-year, while the price for Smokable CBD Flower remained stable.
  3. Extraction and Manufacturing Costs: The method of extraction significantly impacts the price of CBD oil. CO2 extraction, considered the gold standard, is more expensive due to the high cost of equipment and yields potent, pure products without harsh solvents. Other methods like ethanol and olive oil extraction are cheaper but might not offer the same quality.
  4. Potency and Formula: Higher potency CBD oils are more effective and, while initially more expensive, can be more cost-effective in the long run. The formula of the oil, including carrier oils and additional ingredients, also affects the price.
  5. Third-Party Testing and Quality Assurance: Reliable CBD companies invest in third-party lab testing to confirm the potency and purity of their products. This necessary step ensures safety and quality but adds to the overall cost.
  6. Brand Reputation and Marketing: The reputation of the brand and its marketing strategies can also influence the cost. Premium brands with a strong reputation may charge more but often offer higher quality and customer service perks like reward programs and discounts.
  7. Hemp Farming Practices: The quality of hemp used in CBD oil production is a crucial factor. Organic, non-GMO, and pesticide-free hemp tends to be more expensive than mass-produced hemp. However, as the hemp market matures, the cost of high-quality hemp is expected to decrease, potentially lowering CBD prices.
  8. Market Demand and Consumer Preferences: The demand for CBD products and consumer preferences play a significant role in pricing. With increasing awareness and applications of CBD, demand fluctuates, affecting prices.
  9. Regulatory Environment: The legal and regulatory landscape surrounding CBD production and sale can influence costs. Compliance with regulations, both at the federal and state levels, can add to production costs.
  10. Global Economic Factors: Broader economic trends, including inflation, supply chain issues, and global market dynamics, can impact the cost of raw materials and production, thereby affecting CBD prices.

Check out our blog for more info on CBD and ideas on how to use it!