Our Vision for the CBD Industry

The Past

The legal CBD industry was created with the passage of the Farm Bill in 2014.  Until then, CBD was considered a Schedule 1 drug like marijuana, heroin, or cocaine.  It was illegal in all 50 states and federally in the USA. Hemp is a cannabis plant similar to marijuana but without the psychoactive ingredient known as THC.  CBD is one of the chemicals that is derived from the hemp plant but must contain less than .03% THC to legally be sold under current laws.

With the passage of the 2014 Farm Bill by Congress, it became legal to grow hemp for the first time in 75 years which allowed CBD products to be manufacturered and sold under certain regulations and conditions.  Many marijuana growers quickly jumped into the industry and started creating CBD products which contain less than .03% THC (the psychoactive ingredient in marijuana that gets you high). These products were produced in many forms including oils, tintures, sprays, edibles, salves, balms, shampoos, cosmetic products, vapes, pre-rolls,  hemp flowers, teas, coffees, beers, water and other products infused with CBD.

The primary benefits and consumer applications for these CBD products has been for health, wellnes and beauty.  Pain, stress, anxiety, glocoma, parkinsons, acne, and many other ailments have been treated with CBD products and consumers continue to use them month after month, paying high prices and attesting to their benifits.

The first CBD companies to enter the market saw rapid sales growth and  little to no regulations, no license fees, and the ability to sell their products over the internet.  The US industry grew from under $100 million in 2015 to $250 million in 2016, to $450 million in 2017

to over $800 million in 2018.

In late 2018, with the passage of the 2018 Farm Bill, Hemp was removed from the Schedule 1 drug list and regulation was transferred from the DEA to the FDA.  It will now be regulated as a food and beverage. Those regulations have yet to be finalized, leaving uncertainty of the legality of any food and beverage or health food supplement containing CBD.

The Present

In 2019, there are now over 200 brands of CBD products over 3,000 individual products being sold in thousands of independent pharmacies, convenience stores, tobacco shops, gas stations,  pain clinics, health and wellness centers, beauty spas and other retail brick and mortar stores. More than 50% of product sales however are sold over the Internet and shipped by mail to all 50 states to millions of customers. The cork is definitely out of the bottle, but many bottles may be broken in the next few years and the regulatory authorities try to bring law to the lawlessness that prevails in the industry.

The major mass market retailers of health, wellness and beauty products like Walmart, Target, Walgreens, CVS, GNC, and Internet giants like Amazon have not yet filled their shelves with CBD products because of the regulatory uncertainties, legalities, and supply chain issues.  Also there is a major issue of age regulated products and identity verification in order to keep vape pens and pre-roll hemp cigarettes, CBD gummies that kids mistake for candy, and flower products out of the hands of teenagers. It has been a major obstacle for the tobacco and CBD industry to overcome.

Thus, Pharma Kiosks, LLC was created to solve this problem.  Through our patented biometric vending machines, teenagers can no longer use fake IDs or spoof the finger print and facial recognition software used over the internet and in smart phones to order products which are restricted to 18 to 21 year old buyers.

In March, CVS Pharmacies was the first major chain pharmacy in the US to announce that they are now selling CBD topicals (salves, sprays, massage oils, skin care products) in 800 of their stores in ten states.

Topicals only represent about 14% of the CBD market and 800 stores is less than 10% of CVS stores nationally (9,600 stores).   This toe in the water has opened the flood gates of every other retail chain to start ordering CBD for their stores and to put pressure on Congress, the FDA and other state and local agencies to clarify the regulations for selling CBD products and to open up the banking system for depositing cannabis revenues in the Federal banking system.

The best way to describe the status of the CBD industry at this time is “the Wild, Wild, West”

There is no law enforcement, no industry brand leaders, no industry regulatory standards, and millions of new customers are entering the territory every year.  There is an overwhelming need for consumer education, truth in packaging and labeling, independent product testing. There is a real need for sensible regulations that allow for innovation and creativity but protect the health and wellness of the public from products that do not meet pharmaceutical level standards for medicinal applications.

The Future

Our vision of the future is almost as wild as the past and present.  There is a growing body of evidence as to the medicinal benefits of CBD and some potential risks for interaction with other drugs.  There are numerous clinical trials, and billions of dollars being poured into the industry. CBD products may become a disruptive technology with the potential to change the entire prescription drug industry. CBD products are already being used to combat the opiod crisis and hundreds of thousands of annual deaths from overdoses and bad drugs.

CBD products are being tested to replace or supplement virtually every drug on the market for virtually every ailment known to man.  Whether they prove to have medicinal benefit or not for many of these applications and ailments is yet to be seen. The drug industry and the drug lobbiests will fight to keep CBD products out of pharmacies to avoid losing their multi–billion dollar market for pain killers, stress, anxiety, depression, cancer, and other major diseases.

Many of the CBD companies will go out of busines because they can’t get shelf space in the brick and mortar retail stores and they can’t compete with Amazon and other CBD companies selling virtually identical products over the Internet.  With no brand recognition, the better CBD products and companies may get acquired by the bigger CBD companies.

The mass retailers and Amazon will lower the prices of all CBD products, reduce the current profit margins, and only the companies who have achieved scale of $10 million in annual revenue or greater, will be able to fill the shelves of over 100,000 retail locations.  Smaller CBD companies must achieve brand recognition for their unique products and strains or they too will have trouble competing with the bigger companies that enter the industry. Every CBD company and every CBD reseller will have to find ways to lower their overhead, increase their brand awareness, and capture market share before the market is too crowded for companies to remain profitable.

Where does this place Pharma Kiosks LLC in the future.  We believe that our biometric vending machine patents and technologies for overcoming age verification and identity theft will be the best solution for the entire industry.  Selling CBD in vending machines lowers the labor cost for inventory control, reduces shoplifting, and lowers the overhead of a pharmacy or retail store. Our company will place vending machines in stores with the best CBD products at no cost to the retailer.  We will pay them a negotiated percentage of revenue based on their traffic volume and sales. We will guarantee them a minimum monthly revenue for placement of our vending machines with no risk to the store. We manage the entire regulatory compliance and independent product testing to make sure that every CBD product sold in our vending machines is in compliance with every state, federal, local, and retailer regulations.

We know the rules and regulations will change or vary for every state and every city and every location.  It is much more cost effective for a major distributor like Pharma Kiosks hopes to become, than it is for every retailer and every store to manage the regulatory compliance and dedicate the staff training and time to selling CBD products and answering customer questions.

Millinneals love vending machines and automation that engages them with videos, mobile apps, free home delivery, and other features that our biometric vending machines provide.

Pharma Kiosks, LLC is the future of CBD product distribution.  CBD is the future of the health, wellness and beauty industries.  Our stock ownership by our employees is our future and will provide for the future of all of outside our investors.

We believe it is possible to go from zero to hundreds of millions in revenue in three years.  We plan to give 10% of our profits to a charitible foundation for first responders, military, and homeless people who need the benefits of CBD and deserve our support,  but who may not be able to afford them. We will fund a charitable foundation with 10% of our profits that will issue debit cards providing free and/or discounted products to each qualified applicant.

If you want to participate in our future, please right to us and share your ideas, opportunities, and your vision of the future.  We are an equal opportunity employer and senior consultants to the Asian Cultural Alliance and producers of the upcoming CBD show for ACTVUS.com