Franchise Evaluator™: Native Ceuticals

What population does the brand serve? Is the market broad, niche, or somewhere in-between?

The global CBD oil and CBD consumer health market is projected to reach a value of $123.2 billion by 2027, with a compound annual growth rate (CAGR) of 25.6% throughout the forecast period. This growth is primarily attributed to the rising adoption of cannabidiol (CBD) and CBD-infused products for various medical and wellness purposes. Favorable government regulations, coupled with increasing consumer awareness and demand for CBD due to its perceived health benefits, further propel market expansion. Additionally, CBD products are gaining traction without causing psychoactive effects.

We categorize the market size as a large market.

Is the overall industry growing, that is creating new customers who have never used these services before, or mature where most population segments are already using these types of products and services?

The acceptance and legalization of CBD oil and infused products are driving market growth, fueled by increased consumer awareness of CBD’s health benefits. Consumer demand for CBD-infused items like oils, drinks, beauty products, capsules, and pet treats is on the rise, with CBD being consumed through various methods, including ingestion, inhalation, and topical application. The pharmaceutical industry recognizes the therapeutic potential of CBD and is incorporating it into medications, contributing further to market expansion. Efforts to enhance consumer awareness through informative packaging and marketing activities are expected to fuel growth opportunities for the global CBD market. To continue to adapt to industry trends, Native Ceuticals introduced custom tinctures through an innovative, patent-pending process, which allows for personalized blends of distillates, isolates, and terpenes. This ensures that individual needs are addressed effectively.

We categorize the Industry Trend as a high growth trend.

What drives the purchase of the product or service? Is it a “need-to-buy” or a “want-to-buy”? How are customers drawn to your business?

In a market crowded with over 200,000 hemp and CBD suppliers in the U.S., Native Ceuticals stands out through its Seed to Shelf business model, quality product lines, and commitment to customer experience. The company offers a unique retail approach centered around a holistic wellness concept that incorporates various cannabinoids beyond just CBD. Native Ceuticals’ licensing program aims to rekindle entrepreneurial spirit by providing partners with autonomy and innovative retail strategies, including online sales integration and tailored product offerings. Ultimately, the Native Ceuticals CBD investment opportunity appeals to those seeking to make a difference in people’s lives by offering alternative wellness solutions while also providing a viable business venture in a rapidly expanding market.

We categorize the product and service drivers as high drivers.

Are competitors a major factor in operating your business? If so, is competition sparse or saturated? Will it matter to your business?

Competition in the CBD oil market is fierce as demand surges, driven by growing awareness of its efficacy and purity. This upward trend is expected to attract new entrants in the future, spurred by increasing awareness of CBDs health benefits. CBD consumer health products, offering health benefits without intoxication, are rapidly gaining popularity. Companies are intensifying competition by expanding into new markets, broadening product ranges, and attracting new consumers. Key players in the CBD oil and CBD consumer health market include:

• CVSciences, Inc.
• Medical Marijuana, Inc.
• CHARLOTTE’S WEB
• ENDOCA
• Isodiol
• Elixinol
• NuLeaf Naturals, LLC

Native Ceuticals remains a top competitor by consistently expanding its product range to meet evolving consumer preferences. The brand’s offerings span from skincare essentials to pet care solutions, catering to a broad demographic. By remaining informed about industry advancements and employing cutting-edge techniques, Native Ceuticals positions itself as a reputable provider committed to delivering quality, tailored solutions to its clientele.

We categorize the competitive climate as mid-high competitive pressure.

Are the business’s products or services regulated, or do they require licensing? Will you or your employees require special licensing? If so, is the regulatory climate strict or lax? Will this affect recruiting employees?

The regulatory landscape for the CBD industry in the U.S. is complex and continually evolving. The legal status of CBD products is primarily governed by federal law, particularly the Agriculture Improvement Act of 2018, commonly known as the Farm Bill. This legislation legalized the cultivation of industrial hemp (cannabis with less than 0.3% THC content) and removed it from the list of controlled substances. However, despite the federal legalization of hemp-derived CBD, the U.S. Food and Drug Administration (FDA) retains authority over the regulation of CBD products, including dietary supplements, food, beverages, cosmetics, and drugs. As of early 2022, the FDA has only approved one CBD-based drug, Epidiolex, for the treatment of rare forms of epilepsy. Additionally, individual states have implemented their own regulations regarding the sale, marketing, and labeling of CBD products, which can vary widely. Some states have adopted more permissive regulations, while others have imposed stricter requirements or outright bans on certain types of CBD products. Overall, the regulatory climate for the CBD industry in the U.S. is characterized by ongoing uncertainty and a patchwork of federal and state regulations. Industry stakeholders continue to advocate for more explicit guidance and rules from federal authorities to ensure consumer safety and facilitate market growth.

We categorize the regulatory climate as high regulation.

How experienced is the franchisor at being a franchisor?

Native Ceuticals was established in 2019 by co-founders Walter Tribolet and Steve Brown. Since then, the duo has expanded the brand to 80 locations across the country run by passionate licensees.

We categorize the Franchising Experience as Extensive.

What is the tenure, background, and commitment of the franchise’s leadership?

Co-founder and CEO Walter Tribolet has driven growth through his financial acumen, cost-effective operations, and new business opportunities across consumer products and service organizations. While at Native Ceuticals, he has created everything from e-commerce to retail locations and has overseen marketing, manufacturing, and supply chain, as well as the nationwide rollout of locations. Co-founder and Chief Product Officer & Head Formulator Steve Brown is a strategist with a history of working in the health and wellness field, specializing in phytocannabinoid product research, development, formulation, and manufacturing. He is also skilled in sales, product-market fit, marketing strategy, sourcing, and logistics management.

We categorize the Franchising Leaders as Highly Experienced.

How often and how well does the franchisor engage franchisees? What assistance is provided in starting and operating your business.

Native Ceuticals seeks individuals embodying an entrepreneurial spirit, demonstrating a desire to reap the rewards of their own efforts. Emphasis is placed on understanding the day-to-day demands of the role rather than prior business experience. Essential to the ethos of the business owners is the acknowledgment that success stems from within. They are provided with comprehensive tools for success, including unique products, high-profit margins, and opportunities for online sales. However, autonomy is key, as there is no constant guidance provided. Ultimately, the responsibility for running the business rests with the individual. The desired attributes include an entrepreneurial spirit, pioneering mindset, business acumen, self-motivation, and resilience, with a focus on delivering exceptional customer service. Retail experience is optional but beneficial.

We categorize the Franchisee Engagement as Highly Engaged.

In what kind of financial shape is the franchisor?

Native Ceuticals is not a franchise and therefore is not required to file a Franchise Disclosure Document (FDD). The company reports licensees have great growth potential based on a number of factors that vary from licensee to licensee. According to the brand’s data, their average gross sales increased significantly year-over-year during the first three years in business. During the first year, licensees average $227,247.50, $339,660 in the second year, and $413,972.50 in the third. As with all financial claims, you should independently verify with trusted professionals. FDA Disclaimer; These products and statements are not evaluated by the Food and Drug Administration and are not intended to diagnose, treat, cure or prevent any disease. FranchiseExpert.com’s review of this opportunity does not constitute endorsement. This site and any information contained herein is for information purposes only. As with any investment, please seek advice from trusted financial and legal professionals.

We categorize the Financial Health as Sound.