Tag Archives: CVS

Growing Number of Retailers Seeking Sales Growth with CBD Products

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This is a revised version of an article originally published here on June 13.

America’s largest traditional supermarket chain has crawled onto the CBD oil bandwagon, announcing this week that it will begin selling CBD products. These are items based on cannabidiol, a non-intoxicating portion of the hemp plant – best known as the source of marijuana. Kroger, whose store count is exceeded only by Walmart, plans to offer such cannabidiol products as lotions, creams, and oils in 945 of its 2,764 stores before the end of June, according to a company news release.

Supermarket News said the CBD products will be carried at stores in Kroger’s Atlanta, Cincinnati, Columbus, Michigan, Central, Louisville, Delta, Nashville, Mid-Atlantic, Roundy’s (Mariano’s and Pick ‘n Save), Dillons, King Soopers, Fry’s, Fred Meyer, QFC and Smith’s divisions.

Last month, The New York Post said it had learned that top executives at major chains such as Walmart and Target have been quietly meeting with makers of such CBD products as drinks, gummy bears, topical creams and oils. There are a surprising variety of products available that are infused with cannabidiol, or CBD, all of which have proven popular with the target market.

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While Walmart has not announced any plans to sell any CBD products in store, it has for some time quietly been selling – for delivery, not store pickup – “hemp oil,” another non-intoxicating derivative of the hemp plant.

Motley Fool Lists Nine Retailers Adding CBD Products To Shelves

Motley Fool article dated June 3, 2019, cited nine retailers now (or about to be) selling CBD products.

They include health and wellness retailers – CVS Health, Walgreens Boot Alliance, and Rite Aid – who collectively dominate the pharmacy sector outside of supermarkets.

The Fool said CVS Health plans to carry select CBD products — topicals — in roughly 800 of its stores, spanning eight states in March. Just days later, Walgreens Boots Alliance’s declared nearly 1,500 of its US stores would also offer CBD products. Most recently, Rite Aid joined the party, announcing plans to carry CBD products in two states (Washington and Oregon).

Considering that front-end sales for CVS Health, Walgreens, and Rite Aid tend to have very low margins, the introduction of CBD products may slightly boost margins, or at the very least improve foot traffic into their stores.

Beauty retailer Ulta Beauty is a fourth brand-name retailer carrying CBD products. In mid-March, Ulta announced plans to carry five skin-care products from Cannuka that blend CBD with manuka, a type of honey that’s sourced from bees that pollinate Manuka trees. Ulta is currently able to sell these skin-care focused CBD products in all but three states (Nebraska, South Dakota, and Idaho) where CBD laws remain very strict.

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The Fool said a fifth major wellness retailer where a consumer can pick up CBD products is GNC Holdings, which recently began selling a variety of CBD-infused topical creams of varying strengths. Known for supplying everything from performance supplements to health and beauty products, GNC’s entrance into the CBD product space was a logical move designed to appeal to the full spectrum of its customer base.

In addition to brand-name health and wellness retailers, four major apparel, accessory, and general retailers are now offering CBD products for sale. Among them are Designer Brands, Urban Outfitters, and Simon Property Group. The latter doesn’t directly sell CBD products, but as the largest mall operator in America, it is directly responsible for approving or denying what stores go into its malls. Recently, Simon Property Group and Green Growth Brands came to an agreement that allows Green Growth to open 108 shops in Simon’s malls this year to sell products containing CBD.

Let The Buyer Beware

Meanwhile, Healthline.com issued a warning that a product based on a hemp derivative, and its label may give the impression their benefits are broad-based, as CBD products are said to be, but consumers need to be careful what they buy.

That website noted recently that, “it’s easy for a brand to add hempseed oil to a product, adorn it with marijuana leaves, and highlight the word cannabis to make consumers think they’re receiving a CBD product that contains no actual CBD at all.”

Continuing, the Healthline author said: “So how can you tell what you’re purchasing? It’s pretty simple actually, check the ingredient list…

“Hemp seed oil will be listed as cannabis sativa seed oil. CBD will be listed as cannabidiol, full-spectrum hemp, hemp oil, PCR (phytocannabinoid rich) or PCR hemp extracts.”

The product Walmart sells is described as “Cold-Pressed, Unrefined Hemp Oil from non-GMO, Sustainably Farmed Canadian Hemp. 24 ounces.”

The CBD Products Market Is “The Wild West,” U. Penn Professor Says

Similarly, Dennis Thompson, a HealthDay reporter at WebMB.com, noted last month that, “CBD is being produced without any regulation, resulting in products that vary widely in quality,” citing Marcel Bonn-Miller, an adjunct assistant professor of psychology in psychiatry at the University of Pennsylvania School of Medicine.

“It really is the Wild West,” Bonn-Miller said. “Joe Bob who starts up a CBD company could say whatever the hell he wants on a label and sell it to people.”

There are two factors drawing supermarkets to add high-margin CBD products to their product mix. First, because right now, they offer uncommonly high margins. Secondly, they are viewed by an increasing number of consumers as a prescription-free way of obtaining a pain reliever. Their present high margins are likely to lessen as competition heats up. And while some may find oil or capsules containing oil offer some relief from pain, that could become a painful subject for retailers if the government, via the FDA, decides to require cannabidiol to be tested and meet efficacy standards.

It remains to be seen how the market will shake out in coming years, as more states are certain to join the list of those already allowing sales of marijuana in addition to the non-intoxicating CBD product lines.

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Pharmacy Chain Accused of Saying Elders ‘Like To Steal’

Most retailers take steps to encourage people to shop their stores and seek to get those who do so to remain customers. The CVS pharmacy has been accused of turning those concepts on their heads: Several discrimination suits filed against the chain in New York City on Oct. 31 accuse the retailer of advising staff, in a ‘loss prevention’ handbook, that older people ‘like’ to shoplift and of failing to discourage employee actions intended to embarrass departing older visitors, creating the impression that they may be hiding and stealing items.

The New York Post reported that the employee handbook warns employees that senior citizens on a “fixed income” present a “special shoplifting concern.”

The paper said that attorneys from the Manhattan law firm Wigdor LLP brought the suits on behalf of former employees arguing that the policy is “tantamount to an admission of discrimination against older customers.”

Lawyers Michael Willemin and David Gottlieb noted that they have testimony from 16 whistleblower ex-staffers who claim that CVS stores across the city discriminate by profiling elderly shoppers as well as blacks and Hispanics.

One of the cases was initiated by Anson Alfonso, a former “market investigator” for CVS, where he was part of a team of undercover employees who helped track and bust shoplifters.

Alfonso, 27, worked as a store detective from January 2013 to October 2014. He told The Post that store managers, supervisors and even stock personnel would frequently swipe security tags past checkpoints to set off an alarm when an elderly person was leaving a CVS store. The intent was to intimidate them and imply, with no evidence whatsoever, that the older person was shoplifting.

“They would say, ‘I didn’t see it but I know that old person was stealing,’ ” Alfonso said.

The paper noted the shoplifting-among-the-AARP-set theory mirrors a 1998 “Seinfeld” episode titled “The Bookstore,” in which Jerry catches his Uncle Leo stealing a book from Brentano’s. When Jerry confronts him, Leo protests that the petty theft is his right as a senior citizen.

“It’s not stealing if it’s something you need,” Jerry’s dad, Morty, says, with his mom, Helen, noting, “Nobody pays for everything.”

A shocked Jerry shouts, “You’re stealing, too?!” and Morty explains, “Nothing. Batteries. Well, they wear out so quick.”

But attorney David Gottlieb says there’s nothing funny about the pharmacy chain harassing innocent seniors and other groups protected under the law.

“It is reprehensible that CVS targets customers based on race, ethnicity and even age, and we intend to hold the company accountable for these practices,” he said.

The new filings come a year after Gottlieb’s firm sued CVS in a federal class action, alleging store managers ordered security guards to focus on minorities.

A CVS spokeswoman said, “We are not aware of these new cases, so we are unable to comment specifically. However, in previous cases brought by the same law firm on similar complaints, plaintiffs’ attorneys have not been able to produce any documentary evidence to support their allegations.”