The CBD market has exploded in the past four years. Few industries have seen such rapid growth and future potential as the CBD industry. However, CBD brands are difficult to build and become profitable.
Oversaturation and unethical retailers have caused a difficult path for new CBD companies. But if you are successful, it could be a highly profitable business venture that could change your life.
In this post, we will explain the magnitude of the opportunity to sell CBD and provide instructions on getting your business off the ground.
CBD Market Growth Potential
Experts project the US CBD industry to hit a market cap of over 19 billion by 2025. While the growth depends on the future legal status of CBD, we expect the industry to continue growing.
If the FDA loosens restrictions on THC content, the industry’s market cap should increase even more. The rise of hemp-derived CBD products has opened up new products for the industry and will continue to give companies options other than CBD.
How to Start a CBD Business
Starting a CBD business is tough. The federal restrictions on cannabis make crucial aspects of the industry challenging, such as banking, marketing, and point of sale. While these challenges create problems for beginning cannabis entrepreneurs, they create a significant entry barrier.
We highly suggest working out the most difficult challenges before moving on to the more accessible aspects of the business.
Below is the general order of how you should start a CBD business.
· Find a Bank with a Cannabinoid Hemp Program
You don’t want to be dishonest when setting up your bank account. If you lie, the bank will eventually find out, and you will get your account shut down. Ideally, you also want to find a source of capital to cover startup costs or cash infusions down the road.
· CBD License
The first step is getting a license from your state. Each state is different, so you’ll have to research the steps required to sell CBD legally.
· Create a realistic marketing strategy
Most digital marketing platforms do not offer CBD advertising. As a result, you are forced to get creative with your marketing. Many CBD brands like cbdMD or Hemp Bombs use strategies other than paid advertising like SEO, influencer marketing, and viral marketing to push the brand forward.
· Find a credit card processor
The next step we recommend is finding a credit card processor with viable fees that will handle high-risk accounts. Unfortunately, most major CC processing companies don’t accommodate cannabis companies.
How to get Into the CBD Business?
Once you’ve overcome the significant challenges, you can start building the other aspects of your CBD business.
If you are selling online, you want to dedicate most of your time to your website. Adding content, optimizing your pages, and building a store is critical if your strategy is primarily selling online.
Choosing the brick-and-mortar route requires more work and upfront investment. You’ll also encounter challenges getting a loan and finding a property that will lease to a cannabis company.
1. Start Selling CBD
After you’ve set up your business, you need to begin selling products. Hopefully, you’ve created a marketing strategy to expose your products to new customers. Building a loyal customer base is challenging, but providing quality products at reasonable prices will win over consumers.
2. Legally Launch a CBD Business
As long as you follow the guidelines of the FDA and have an active cannabinoid hemp license, you will be selling products legally. Running a CBD store has other legal challenges that should be taken care of in the beginning stages of starting your CBD company.
3. Find Quality CBD Sources
To run a successful CBD business, you’ll need high-quality products. Make sure you do your due diligence when finding a supplier.
High-Risk High Reward
Starting a CBD company is extremely challenging but can be a life-changing opportunity. Follow these steps and be patient when starting your business and you will have an excellent chance of building a viable CBD company.
Michael Levin is a CBD enthusiast, a researcher, writer and editor in the cannabis space, experienced CBD user and educator. He believes CBD can help improve our overall health and wellbeing.