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Abstract
Cannabidiol (CBD) oil is becoming popular after implementing the 2014 and 2018 Farm Bills in the United States, although not entirely regulated by the Food and Drug Administration (FDA) because of its safety concerns. This paper, via a choice experiment, examines consumer preference and willingness to pay (WTP) for various certification labels (FDA, third party, and no-label) of CBD oil with four different concentrations: high, medium, low, and none using random parameter logit model (RPLM). We find that FDA certification has a significant role in purchasing CBD oil by non-users in all but low concentrations. In contrast, non-users have negative utility for third-party certified oil in all quantities. Users prefer FDA-certified oil in none and high concentrations. Overall, we find a significant impact of FDA labels in all except low concentration. We also examine how other attributes like price, location of purchase, production method, and origin impact the WTP of CBD oil.