Your Cart is Currently Empty
How to start a CBD oil business
Thanks to the increasing popularity of CBD oil throughout the United States, the market for CBD products is booming. You may think it is an ideal time to embark on your own CBD business. If so, here are a few of the things you may want to know about which pitfalls to avoid, and how to be successful.
What exactly is CBD oil?
CBD is one of many compounds that can be extracted from the hemp plant. It can be turned into a variety of products, including oils and edibles. These have been used for a range of stated medical uses, although in many cases, research into their benefits is still in the early stages. Hemp products have also been used recreationally.
History of the CBD industry
It was in 2018 that the Farm Act was passed in America. This did not just provide new regulations for the growing of hemp, but it removed it from the Controlled Substances Act for the first time in decades. This opened the doors for a now-thriving industry in CBD products.
There are currently millions of people who describe themselves as CBD users, and the industry as a whole is worth billions of dollars, a figure that is projected to continue growing. It shows just how rapidly the industry has established itself in a short period of time.
Identifying your potential customers is a vital part of establishing any business. Most users of CBD products are under 30, suggesting a potential long-term customer base. Regionally speaking, CBD is more popular on the West Coast, although there are a significant number of users in the South.
Establishing your business
First, you need to do the same things you would have to do in any industry - secure funding, make sure you have insurance, organize your supply chain, establish your business address, and put together a general plan for how you intend to start, proceed and grow, including costs and potential profits.
Then, there are CBD-specific considerations. There are several stages involved in the CBD production process, and you will need to decide which parts you wish to oversee directly. For example, will you grow the hemp yourself or will you purchase it from another supplier? Once you have the hemp, will you remove the CBD yourself or hire an extraction company?
Other important decisions include whether you want to run a brick-and-mortar store (which may have more overheads but also allows you to build a more reliable and personal relationship with customers) or just sell online (lower costs, but also less personal connection).
You also have a choice about the types of products you supply, including CBD isolate, broad-spectrum and full-spectrum CBD. You may want to include pet-friendly products as well as those designed for humans. It is important to research thoroughly when putting together your business plan.
Industrial hemp is defined as having less than 0.3% THC. This is the standard for hemp, and the CBD produced from it needs to meet to comply with federal regulation. If you are within this limit, you can grow, harvest and transport your products without fear of legal repercussions. It also makes sense to check for any local regulations in your state.
The newness of the hemp industry also means that regulation is still constantly evolving in line with new scientific research and changing public and political attitudes. Removing hemp from the Controlled Substances Act moved enforcement from the Drug Enforcement Administration to the Food and Drug Administration, but that does not mean that there are not still strict rules about how it is advertised and sold. This is particularly true if you're trying to make claims about CBD oil’s medical benefits.
Other potential concerns
It is not just federal regulation that you need to be aware of when starting your business. The companies and institutions you may need for support, such as banks and insurers, have not all adjusted to the world of widely available CBD. It can also be hard to secure advertising. These are areas where you can clearly see the impact of the rapidly changing nature of the market, which is likely to change even more in the near future.
If you keep these factors in mind, there is no reason you should be unable to start a successful CBD oil business. As long as you remain aware of the law and the changing nature of the marketplace, you should be able to structure and adapt your business to avoid potential risks and provide a valued product to your customers.