Dive Brief:

• Yesway, the Fort Worth, Texas-based convenience store retailer, will soon include a cannabidiol (CBD)-focused store-within-a-store concept managed and run by GPO Plus, according to paperwork filed with the Securities and Exchange Commission on Thursday.
• The products included in this agreement include CBD-based drinks, snack foods and vaping products, all sold on a consignment basis in what will be branded as Feel Good Shop Plus. 
• GPO Plus, a holding company containing healthcare and hemp/CBD general purchasing organizations, will be responsible for nearly all aspects of the Feel Good Shop Plus locations. This includes stocking the items, merchandising and marketing, though Yesway can set the retail prices for the products.

Dive Insight:

The agreement offers a low-risk way for Yesway and Allsup’s to get more heavily into the CBD trend — a market that’s currently worth over $9 billion and is expected to grow by over 18% per year over the next several years, according to research from Market Research Future. The company does not have to buy the product to stock on shelves; it simply provides space for them and earns a portion of the profits.

The companies have identified a majority of Yesway and Allsup stores as potential locations, though that list is subject to change as the deal progresses, according to the document.  

While some aspects of the marijuana market remain uncertain thanks to continuing regulation at the federal level, CBD products have a much easier time in retail stores. The U.S. Congress passed the Agriculture Improvement Act in 2018, which legalized CBD products derived from hemp federally, so retailers only need to worry about their state or local laws.

That doesn’t mean there are no potential issues. The Food and Drug Administration does still keep a close eye on the marketing of such products even where it’s legal. But most mainstream products should encounter no difficulties, according to experts, and if there are problems either company can end this year-long, auto-renewing agreement by alerting the other party at least 60 days before the deal renews.

CBD products are becoming a staple at many c-store chains. Yesway has offered CBD-based drinks from brands like Kill Cliff, DEFY, Weller and CBD Living Sparkling Water. Circle K offers a number of items at its stores, and even sold a limited-time CBD vape product in 2021.

Yesway operates 435 stores in Texas, New Mexico, South Dakota, Iowa, Kansas, Missouri, Wyoming, Oklahoma and Nebraska. It focuses on rural and suburban markets in the Midwest and Southwest.