Retail

Abercrombie & Fitch will sell Green Growth Brands' CBD products in more than 160 stores

Key Points
  • Abercrombie & Fitch is growing in the booming CBD business.
  • It's going to sell items from Green Growth Brands in more than 160 stores.
  • It ran a small test with GGB in 10 stores in May.
The Abercrombie & Fitch store at South Park mall in Charlotte, North Carolina.
Chris Keane | Reuters

Teen apparel retailer Abercrombie & Fitch is expanding its CBD business with Green Growth Brands.

The retailer plans to sell the cannabis company's CBD-infused body-care products, including lip balms and sugar scrubs, in more than 160 of its 250-plus stores.

This follows the apparel retailer's initial run with Ohio-based GGB in May, when it was selling items from GGB's Seventh Sense line in 10 Abercrombie locations, including in Colorado and Nevada.

"Abercrombie & Fitch understands how to connect with their target-customer ... across the globe," said Green Growth Brands CEO Peter Horvath. "They have incredible brand recognition in our current target markets and beyond."

The CBD industry is thriving and has the potential to become a $22 billion business by 2022, according to cannabis-focused research firm Brightfield Group.

Congress in December legalized CBD derived from hemp. The nonintoxicating cannabis compound is being added to just about everything, including makeup, tea, pet treats and soft drinks — flouting FDA rules that prohibit it from being added to food, beverages and dietary supplements. Amid the regulatory murkiness around these products, more retailers feel comfortable stocking skin-care and beauty products.

Even though consumers' interest is surging, many mainstream retailers such as Walmart and Target have largely stayed on the sidelines. Walgreens, CVS, Rite Aid and specialty retailers GNC and Vitamin Shoppe have introduced CBD products to stores in a few states, while luxury department store chain Barney's earlier this year opened a "cannabis lifestyle shop" in its Beverly Hills store, called "The High End," selling exclusive vaporizer pens and pastilles.

Some mall owners are also getting on board.

Simon and Brookfield have signed deals with GGB to open shops in malls selling items with cannabidiol, or CBD. Brookfield says it's opening about 70 GGB locations. Simon is working on 108.

CBD doesn't get users high like THC, another cannabis compound. Still, some people — including regulators — worry about possible unintended consequences of marketing cannabis products to minors.

GGB's Seventh Sense line, including muscle balms and foot creams, is also available in nearly 100 DSW stores.

Abercrombie shares are down more than 20% this year.