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With the hemp and CBD industry experiencing incredible popularity and economic success, it’s no wonder that so many entrepreneurs are flocking to this business opportunity. It’s predicted that the hemp and CBD oil industry will bring in a staggering $22 billion by 2022, tripling the market’s income from 2018.
CBD (cannabidoiol), an active ingredient in hemp, can be extracted and used to create oils, capsules, topicals, and more. CBD offers many benefits without creating a high, making it appealing to consumers who have health issues. It’s been used to treat epilepsy, insomnia, anxiety, and even chronic pain.
As the popularity and usage of CBD products increases, more retailers will be needed to help get these products to consumers. Starting a business in the CBD industry could be a wise investment, but you’ll need to be strategic in the steps you take as you plan your business.
Start With Research
If you’re planning to sell CBD products, you’ll need to start with some significant research. The laws and regulations surrounding hemp and marijuana are complex and constantly changing, and you’ll see variations from state to state.
In 2018, the Farm Bill ceased banning hemp production. Hemp had previously been treated as a controlled substance. This change opened the door for the creation of CBD products, which are only legal if they have 0.3% or less of tetrahydrocannabinol, or THC.
Things get complicated when you take state law into consideration, since many states haven’t yet changed their laws to reflect the allowances made in the 2018 Farm Bill. California, Georgia, and New York City have all banned sellers from adding CBD into food. If you sell CBD and promote it as having a therapeutic health benefit, then you could also be violating federal law, which views adding CBD to food as being the same as selling a prescription drug.
To be safe, you’ll need to not only research both federal and state laws, but also keep up to date on your research, since laws and regulations are frequently changing. Additionally, you’ll need to research any business licenses required by your state and even by your county or town, and will need to verify that your intended business location will be approved by your town for use as a CBD retail operation.
Create a Business Support Network
Starting a business in the CBD industry is a large undertaking, and you’ll need to create a support network of people who can help you. The first person in your network should be a trusted lawyer who can help you navigate and interpret the CBD laws and regulations. Your lawyer can help you to understand the details of what you can and can’t say in your marketing, helping to keep you out of legal trouble.
You may also want to add a financial advisor to your team. A financial advisor can help you to set up your business for success from the start, while also removing some of the workload from your plate. Financial advisors can help you identify areas where you can cut costs, and they can help you to plan for the future as your business grows.
Depending on how tech-savvy you are, you may also want to bring a website designer on board. Being able to hand over your website hosting and maintenance can save you time and energy. A professional looking website can draw in customers and is an excellent marketing tool, and your designer can help you keep your website up to date for a smooth performance, increased security, and improved user experience.
Find a Quality Supplier
When you’re ready to move forward with your business, you’ll need to find a quality, trusted supplier to provide you with products for resale. You should do some research into how CBD is produced so that you understand how to identify quality products and their average pricing, both in wholesale and retail.
A quality CBD supplier should be able to provide you with a Current Good Manufacturing Practice (cGMP) and Certificate of Analysis (COA) on their products. The cGMP identifies that you’re working with a legitimate business that follows the procedures required by the state and FDA regulations. The COA refers to the specific product you’re purchasing and analyzes the levels of CBD, THC, and other components of the products. This COA is particularly important because it will verify that the THC doesn’t exceed the 0.3% level as required by law.
Plan Your Marketing Efforts
With your business coming together, it’s time to put some thought into your marketing. A quality website is a must, but you can also market your CBD industry business through social media. Take some time to write out a social media strategy and be sure to target that strategy to platforms that your customers frequent.
Marketing and advertising are evolving, so staying current on marketing and advertising trends can help you to get the best results from your efforts. Consider creating an email marketing list so that you can offer customers coupons and promotions. Offering frequent buyer discounts, securing radio advertising, and getting involved in the community can all help to promote your business.
Starting any business can be difficult, but the CBD industry’s regulations make this business venture a bit more challenging than your typical startup. However, the CBD industry is booming and offers significant earning potential. If you take your time and do plenty of research, your efforts in starting your business could pay off with a thriving operation.