Read our detailed guide about a cbd oil business business. Typical target market, growth potential, startup costs, and more for this small business! Wondering how to start a CBD or cannabis business? Find out how to take advantage of CBD business opportunities in the booming CBD industry. Create your own CBD brand by private labeling, wholesaling, or affiliate marketing. Learn how to start a cbd business today!
How to Start a CBD Oil Business
A CBD oil business will sell and/or manufacture CBD oil for a variety of purposes. This may happen either online or in stores, though most people won’t open up a specific retail location selling CBD. Most businesses will sell the oil for general purposes (e.g., anxiety, chronic back pain, etc.), though some will concentrate purely on cosmetic uses, with others even blend CBD oil and coffee.
Learn how to start your own CBD Oil Business and whether it is the right fit for you.
Start a cbd oil business by following these 10 steps:
- Plan your CBD Oil Business
- Form your CBD Oil Business into a Legal Entity
- Register your CBD Oil Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your CBD Oil Business
- Get the Necessary Permits & Licenses for your CBD Oil Business
- Get CBD Oil Business Insurance
- Define your CBD Oil Business Brand
- Create your CBD Oil Business Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your cbd oil business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
Luckily we have done a lot of this research for you.
What are the costs involved in opening a cbd oil business?
If you grow your own hemp and turn it into CBD oil, then your costs to start will be low. You can begin selling your product online with little more than a website made for a few hundred bucks with Squarespace and commercial liability insurance in case a customer sues you after using your product. You can also consider partnering with an established farmer to grow their business and your own.
What are the ongoing expenses for a cbd oil business?
Owners need to account for the cost of farming, insurance, and staff salaries. They may also want to hire a lawyer to keep up on the rapidly changing laws.
Who is the target market?
Practically anyone can use this product. CBD oil is used to relieve anxiety, soften skin, and reduce chronic pain. Most famously, it’s given to kids who have severe seizures to reduce their frequency and severity. It can even be taken by people for general relaxation at any time. CBD oil is derived from cannabis, but it does not cause a psychoactive effect like THC will.
How does a cbd oil business make money?
CBD oil businesses will create their own profit margin for their products, based on the scope of their operation, quality of their product, and demand for CBD oil among their target demographic.
How much can you charge customers?
It’s not unusual to see CBD oil sold for $60 for just 30 mL. 100 mg in a 2 oz bottle of skin lotion can be sold for $85.
How much profit can a cbd oil business make?
CBD oil businesses can make a good deal of profit once their customer base is established. If you charge an average of $60 per product at a 50% mark-up, you’ll need to sell 200 products every month to make $6,000 in profit. This goal can be easier to meet than you may think given the exceptional demand.
How can you make your business more profitable?
CBD oil owners can branch out to different types of products to boost their profits. From skin care to make-up to tinctures to vaping to edibles, there are a lot of different options available.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our CBD Oil Business Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name, we recommend researching your business name by checking:
- Your state’s business records
- Federal and state trademark records
- Social media platforms .
It’s very important to secure your domain name before someone else does.
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STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your cbd oil business is sued.
Read our Guide to Form Your Own LLC
Have a Professional Service Form your LLC for You
Two such reliable services:
- ZenBusiness ($49 + State Fees)
- LegalZoom ($79 + State Fees)
You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It’s really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business’s name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company’s assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
Get a business credit card
- Separate personal and business expenses by putting your business’ expenses all in one place.
- Build your company’s credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
Federal Business Licensing Requirements
Although CBD oil does not produce psychoactive effects like the THC found in marijuana, the two products are associated closely enought that the production and sales of CBD are currently in a legal grey area. Before starting your CBD oil business, it is important that you make sure to read up on both state and federal laws regarding CBD products. This will help ensure your business functions smoothly and avoids legal trouble.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a CBD oil business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources .
Certificate of Occupancy
A CBD oil business is generally run out of a place where the oil is manufactured. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location :
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a CBD oil business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your CBD oil business will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers’ Compensation Coverage.
Recommended: Learn what business insurance for your CBD Oil Business will cost.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren’t feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we’ll give you helpful tips and advice for creating the best unique logo for your business.
Recommended: Get a logo using Truic’s free logo Generator no email or sign up required, or use a Premium Logo Maker.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a cbd oil business
CBD oil is popular enough that you’re going to have some stiff competition. Most people are going to be looking for CBD oil online — especially if they’re looking for the more concentrated, medicinal products. Paid online ads, organic blog content, and social media can help attract people to your product. If you’re selling general, lower-intensity sprays, then you can develop relationships with general health stores or even grocery stores to stock your products.
How to keep customers coming back
Customers are going to need to feel relief after taking your products. While research is few and far between, you can do your own analysis of which products are working for different demographics by asking for feedback. This can help you suggest the right product so that there’s less experimentation (and frustration) on the part of your customers.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites – full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.
Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it’s fair pricing.
Start a CBD Oil Business in your State
TRUiC’s Startup Podcast
Welcome to the Startup Savants podcast, where we interview real startup founders at every stage of the entrepreneurial journey, from launch to scale.
Is this Business Right For You?
This business is great for people who have a genuine interest in how cannabis can be used to bring relief to users. Owners should understand the complexities of the plant and how different strains can help treat certain ailments.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a cbd oil business?
It’s rare there will be a ‘typical’ day in the CBD oil business because this business is so new and there are few established business models. An owner may be doing anything from managing inventory to dealing with new regulations to running lab reports for their product. Owners should also be devoting time on a regular basis to keep up with changing trends in their industry (as they can change extremely quickly.)
What are some skills and experiences that will help you build a successful cbd oil business?
People should have some experience with the cannabis market. Owners should understand the basic public demands as well as the public fears and residual stigma of cannabis. There’s a lot to learn about cannabis due to the variety of the product. Understanding the different terpenes and strains can make it easier for your company to stay ahead.
What is the growth potential for a cbd oil business?
Because of its versatility and rapid rise in popularity, CBD oil is predicted to hit $1 billion by 2020 in the US alone (some say even closer to $2 billion.)
TRUiC’s YouTube Channel
For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a cbd oil business?
Understanding the industry is going to be key to getting started. CBD oil is a legal gray area — no matter how you manufacture it. You’re far less likely to run into authorities if you extract your CBD from pure hemp instead of marijuana, but cannabis can be confusing to people who have no experience with it. This can lead to being taken off the shelves or being shut down until local authorities figure it out — which could be a while.
Hemp and marijuana are both from the cannabis plant, but they’re used for very different purposes. CBD oil has enough legal implications that there hasn’t been a lot of official research on it. While this appears to be changing now that the FDA has recently approved a CBD oil drug, it’s unclear how quickly widespread acceptance will happen. In states like California and Washington, your pushback is likely to be low. But in states like Indiana and Kansas, you may have a very difficult time meeting the official regulations of the state.
You should also be extremely honest with your customers whenever possible. Because there isn’t a lot of research on CBD oil, it’s impossible to really say that CBD oil can ‘cure’ anything. While the evidence may be extremely compelling, you want to present both sides of the story whenever possible. The good news is that side effects are extremely mild and it’s impossible to overdose on CBD oil.
One good way to show people that your business is legitimate from right off the bat is to become Clean Green Certified. This certification is essentially the equivalent of the organic label in grocery stores. You’ll need to go through some rigorous testing in order to pass, but these tests help assure people that they’re getting pure CBD oil and not the synthetic, illegal products that may make them ill.
How and when to build a team
You don’t necessarily need to build a team right away if you’re growing the hemp yourself. However, if you’re partnering with other people, you should consider hiring someone to help you decipher the legal puzzles and marketing strategies of the CBD oil business.
How to Start a CBD Business: Navigating the CBD Industry
If you’re wondering how to start a CBD business, you’re not alone. The CBD industry has exploded in growth in recent years, sparking interest in entrepreneurs to get into the CBD business. Truthfully, the cannabis market is growing fast and strong. Given this, now is a great time to start a CBD business. In this article, we’ll discuss what CBD is and take you through a step-by-step approach to breaking out in the industry and making the most of CBD business opportunities. Read on to discover how to start a CBD business online.
How to Get Into the CBD Business
According to BDSA, the market for CBD is expected to grow to $20 billion in sales by 2024. That makes it one of fastest growing segments in the cannabis and hemp industry. To get into CBD business opportunities, you must first learn about cannabinoids. Understanding what they are and how they’re used in products will help you sell them better to your customers. Then, you must consider all of the business aspects that go into running a successful CBD business.
What exactly is CBD?
CBD is one of the compounds found In cannabis and hemp plants. These compounds are named cannabinoids and there are a lot of them, more than 100 cannabinoids in fact. Tetrahydrocannabinol (THC) is the best known cannabinoid due to its intoxicating effects. CBD, however, does not have this psychoactive effect and offers multitudes of potentially therapeutic and health benefits. Research into its medical applications is still ongoing. To create CBD products, there are several steps that must happen. We’ll discuss this later on.
How it differs from hemp or cannabis
As you now know, CBD is one of the compounds in hemp and cannabis plants. You can extract CBD oil from these plants to create CBD oil products. The difference is hemp has less than 0.3% THC, so it’s legal to cultivate, harvest, and process it to make products in the U.S. Cannabis has more than 0.3% THC and is illegal on a federal level.
What Projections Say About New CBD Business Opportunities
The CBD industry has been growing in popularity since 2016. The number of US CBD consumers went from 2.6% to 4.8% in 2018. Many consider this the breakout year for CBD. Whether it be due to the pandemic and people working from home or simply entrepreneurs trying to get a piece of the pie, the CBD industry is hot.
Despite the modern CBD industry being relatively young, it’s a highly profitable space. Grand View Research found that the industry as a whole was valued at $4.6 billion in 2018, and it’s only gone up from there. With loosening restrictions and new forms of consumption that CBD businesses can expand into, the industry has had a compound annual growth rate of about 22.2%. These figures just go to show how now is an ideal time to start a CBD business. But where should you start?
How to Start a CBD Business in 2021
With stats like the ones above, it’s no wonder that people are getting into the CBD and cannabis business. You can start your business in the CBD industry in just ten steps.
Step 1: Discover your target audience
It’s unfeasible to reach every demographic, so you’ll need to determine who you’re going to cater your products to. That way you can build your brand around their needs. Your target market will determine everything from your product’s packaging to the content you incorporate into your marketing campaigns.
Ask yourself some of the questions below to help determine your target market analysis:
- What do they do?
- Where do they shop?
- What do they care about?
- What products are they interested in?
Step 2: Read up on all local and federal regulations for CBD businesses
The commercial production of hemp in the U.S. became legal with the passing of the Farm Bill in 2018. This has enabled the sale of products that contain hemp-derived CBD and allow people to grow industrial hemp.
There are some restrictions, too. For example, the hemp used to produce CBD must contain 0.3% THC or less. Unfortunately, state laws are different. So be sure that you have a clear understanding of the federal and state-level regulations that may affect your CBD product sales.
Do you need a license to sell CBD?
Some states require you to have a special business license to sell CBD. If you plan to purchase your product from wholesalers, check your state laws regarding resale licenses and permits. These laws are different everywhere, so you’ll want to find out whether you need a resale license and how to get one.
Below are the most common states to sell CBD in and their regulation status:
- Selling CBD in Florida. There are currently no set limits on the amount of CBD products a business can sell in Florida. While marijuana is legal for medicinal purposes, CBD products must not exceed the 0.3% THC federal allotment.
- Selling CBD in Texas. Currently, Texas’s Department of State Health Services is forming a registration process for retailers who specifically sell consumable CBD products. However, retailers must keep their suppliers in check as it is a felony to sell CBD products with more than 0.3% THC to the general public.
- Selling CBD in California. CBD and marijuana are both legal to sell in California for recreational purposes. When selling CBD products, retailers must ensure they follow the labeling requirements imposed by the California Department of Public Health.
- Selling CBD in Oregon. Much like California, selling CBD in Oregon is legal and follows federal law about the amount of THC allowed. There are no licenses required for retailers but there are certain labeling requirements mandated by the Oregon Department of Agriculture.
Step 3: Form your business plan
A business plan is a formal document that details a business’s objectives and how it plans to achieve its goals. Think of it as a roadmap that tells you how to handle aspects like marketing, operations, and financials. Writing a business plan can help you strategize, secure funding, and set yourself up for long-term success. Having a formal plan is especially important in the cannabis business because investors are looking for legitimate organizations.
What types of CBD products will you be selling?
In your business plan, you will also define what products you will be selling. There are a variety of different CBD products. For example, you may get into the CBD oil business and focus narrowly on those products. Other CBD products include:
- Tinctures and sprays
- Pills and capsules
- CBD vapes and cartridges
- Topicals and patches
- CBD edibles
Step 4: Register your CBD business
In order to sell CBD in a store or online, you will need to legally register your business. LLCs are a popular structure for small businesses but consider the other business types. You must also request an EIN/TIN with the IRS for your new business. Once you have your business license, you can begin sourcing and selling your products.
Step 5: Secure reliable merchant services
To sell CBD online, you need to have a payment processor that allows you to accept different payment methods. It’s important to choose a merchant service provider that not only accepts CBD merchants, but also understands the industry. You’ll want to find a processor that meets your business’s unique needs.
Step 6: Find your CBD supplier
There are two routes that you can take with your CBD or cannabis business. The first is to create your own CBD products. This gives you more autonomy and you’ll have more control over creating brand loyalty.
The second option is to partner with an existing brand or dropshipper. This is an ideal path if you want to start a CBD business without having too many upfront costs. You can purchase products in bulk without having the need to have inventory on hand. If you take this route, be sure to do your diligence by searching for a reputable brand to partner with.
Step 7: Establish your pricing strategy
To create a pricing strategy, you must know how much your costs are for operating your business. A few questions that are important to consider are:
- How much can you charge for your products?
- What are your ongoing expenses?
- How much profit do you intend to make on each product?
- How can you become more profitable?
Step 8: Solidify your shipping and handling strategy
Shipping and handling are very important to an eCommerce business. You always want to ensure that you are meeting your customer’s expectations. Here are a few questions to ask yourself when strategizing your shipping policy:
- What should be the threshold for free shipping?
- Should I offer a variable fee? Destination-based or weight-based shipping fees can reduce logistics costs.
- What is a feasible delivery timeline?
- What logistics carrier should I work with?
Based on these answers, you can then select supporting shipping and fulfillment software. This enables you to set shipping rates, print labels, auto-send updates to customers, and manage logistics.
Step 9: Market your CBD business
Once you have a thorough plan for your operations, you can then focus on acquiring customers. Just because you have a website and CBD is popular doesn’t mean that shoppers will come running. You need a solid marketing plan, one that draws the right audience to your offerings.
Unfortunately, CBD products are often misunderstood. However, this allows room to build your customer base by educating interested buyers with accurate information. This can include content on different product types, potential benefits, and the hemp industry as a whole. Publishing regular, informational content will also help you with search engine results. Learn and leverage the latest in SEO to help you find potential customers for your CBD business.
Stand out from the crowd of other CBD businesses
With more and more business owners joining the industry every day, it becomes that much harder to stay competitive and top-of-mind for your audience. But by differentiating yourself from the competition, you make your products more memorable for your current and potential customers. With that in mind, do some deep diving to find what sets you apart from your competition.
- Does your manufacturing process result in a product that’s more effective?
- Are you backed by industry experts or influencers?
- Do you serve a niche audience?
- Does your branding or online marketing efforts leave a lasting impression on viewers?
Discover what you bring to the table and double down on it. It will help you determine the steps toward growing your CBD business and set a precedent for your consumers.
Diversify marketing channels to grow your CBD business
Just because you will be doubling down on traditional marketing efforts does not mean that the other avenues aren’t important. Social media marketing has become increasingly important to a younger audience as well as influencer and affiliate marketing. Industry trade shows are also great opportunities to find your next supplier, seller, or customer.
from influencer marketing is just as good, if not better than other marketing channels. , which speaks to how effective they are in generating revenue. that fill the top of the funnel for many smaller businesses.
Influencer and affiliate marketing
Influencer and affiliate marketing are especially attractive because they unlock access to a broader customer base that you didn’t have before. And after you design the initial campaigns, they involve very little work on your end, outside of periodically checking in with your influencers and affiliates. They do much of the heavy lifting, as they’re the ones responsible for creating the content ideas to promote your products.
Trade shows and conferences
Trade shows are unique in that they give you face-to-face interaction with businesses and customers in your industry that you may never see when running an eCommerce business. You can get feedback directly from them in a way you can’t do online. This leads to innovation and product improvement in the long run. But even more so than generating customers, you will have direct access to suppliers, sellers, marketers, and industry experts. Taking advantage of what they bring to the table will put you in a better place to grow your CBD business.
Step 10: Protect yourself from industry risks
The CBD industry is a risky one. The landscape of legislation and the adoption of CBD in everyday life have both been tough factors to contend with. There are just so many variables to keep track of.
Regulations and laws change almost daily, and it’s up to you, the business owner, to ensure that your company is up to date. It isn’t an easy task. Make sure you’re aware of the business legal requirements you need to start or uphold your company’s status as legitimate.
With so much riding on how the laws progress, the amount of capital you have, and the ability to secure emergency funds for your CBD business should be your priority. Also, consider securing backups for each of your vendors and create plans of action for potential future scenarios. In addition to this, certain types of products, such as CBD beverages and other ingestibles, are treated differently than lotions and creams. Purely due to how these items are used, can mean the difference between high risk and low risk.
As your company grows, you’ll want to consider adding a financial advisor and lawyer to your team. They can help you detect changes, act upon legislation, and mitigate issues before they happen.
Staying up to date with CBD legality reduces your risk
A deep knowledge of the industry will help you mitigate risks as you grow your business in CBD.
Although hemp-derived CBD is legal on the federal level, it’s ultimately up to each state to determine its legality. Staying updated on the latest news in your industry will help you to pivot quickly if needed. This puts you ahead of those who aren’t well prepared and allows you to seize opportunities when they’re available.
Subscribe to industry blogs and publications, follow experts on platforms like LinkedIn and Twitter and network with people in different parts of your industry.
If you’re the owner of a small CBD business, for instance, stay in contact with growers and legal experts — people outside of your immediate sphere of knowledge. You expose yourself to different viewpoints on an issue, and you may even discover something your less-connected peers missed, giving you an advantage in this highly competitive market.
Your payment processor can help you overcome risk hurdles
Considering all of the volatility in the market and laws, many CBD businesses have struggled to find and hold onto a CBD merchant account for their business. The reason for this stems from the fact that most banks don’t like that the industry is entrenched in legality changes. But in order for you to stay in business, this is an essential piece of the puzzle.
So how can your payment processor help?
Well, some credit card processing companies can get you set up with a traditional merchant account for CBD. These come with more stipulations and adherence guidelines than other industries, but at least you will be able to process debit and credit cards online and in-person if need be. And while this is the best option for many businesses, it can change.
In the event that banks are unable to support CBD businesses, your processor can keep you online with check processing solutions. It’s not the most convenient answer, but at least your business will be able to accept customer payments while things get sorted out.
Start Your CBD Business Today
It takes a lot of hard work and determination to grow a successful CBD small business. From finding a supplier to securing high risk merchant services, you may feel a little overwhelmed. However, don’t let that stop you from pursuing your aspirations of starting your CBD business. Every day regulations and local legislation are making it increasingly easier for businesses to offer safe and reliable CBD products to consumers. On top of that, consumer trends keep pointing to the expansion of this lucrative industry. Fortunately, by following these tips on starting and growing your business in CBD, you’ll be on the short track to success in the years to come.
Bronte is a designer and marketer based in Los Angeles, CA. She has been creating and promoting content for over 3 years, covering a range of topics in the payment processing industry. Bronte is currently the Director of Marketing at PaymentCloud, a merchant services provider that offers hard-to-place solutions for business owners across the nation.
Learn How To Start A CBD Business in 2022
If you want to create your own CBD brand, sell CBD product in your store or boutique, or even if you just want to earn a commission by promoting other people’s (or company’s) CBD products. then this is the most important blog article you’ll read. Ever!
Because in today’s cannabis world, CBD is a billion dollar industry that anyone can enter and make millions with little to no money, licenses, experience. I want to show you how.
My name is Cory Holmes and I am the founder of Holmes Organics, a wellness brand that offers CBD products. We offer products from CBD Oil, Softgels, and Gummies… to even CBD doggy treats.
This blog/course will teach you how to start a cbd business in 2022!
Every day you wait is another day the other people and companies are making money in the CBD industry while you DON’T!
In Fact, Here’s Just The Tip of The Iceberg of What You Get.
- You’ll discover exactly 3 different business models on how to earn money in today’s CBD market. Which you can literally start in 30 days or less.
- You’ll understand exactly how to structure an entity for your CBD businesses.
- You’ll skip past most of the mistakes and obstacles that stop MOST cannabis startup business owners from competing in the CBD industry.
- You’ll know exactly how to build a money making CBD e-commerce website that literally makes you money while you sleep.
- You’ll understand how to choose the right distributor of your CBD Products
- You’ll have access to insider information and personal business contacts for high risk banking and credit card processing.
- You will learn the best selling CBD Products that will make you the most money in a short amount of time.
- You’ll even learn marketing secrets to getting your business and services in front of millions of people.
- And much more.
Be sure to follow this blog/course from start to finish and implement everything you learn immediately. Before you know it, you’ll be competing in a billion dollar industry. Good luck.
Step 1: Educating Yourself On Cannabis Industry
This is extremely important. You can’t just start selling products without being knowledgable about them. CBD is no different. In fact, you need to strive to know everything and the Cannabis industry.
Currently the government is working diligently to get laws in place for the industry so you need to stay current. Below are helpful resources.
Know The Law
- Do NOT sell any CBD products that has more than 0.3% of THC
- Third Party LabTesting is Essential
- Do NOT make any medical claims
- It’s advised to have transparent labels and packaging
- Please consult a lawyer
M4MM INDIVIDUAL/START UP BUSINESS MEMBERSHIP- $100 YEARLY
- Membership Certificate
- Free admission to dice networking mixer
- Business logo on the M4MM website
- 1 hour complimentary business consultation
- Member of the week social media posting
- Monthly virtual membership meeting
CANNABIS BUSINESS NEWS & TIPS
- Get the latest news on the cannabis industry
- Business advice, jobs, and more ideas
- Excellent marketing opportunities
CANNABIS BUSINESS NEWS & TIPS
Aimed at those interested in investment, entrepreneurship and changing careers, the workbook uses guided exercises to help committed readers develop personalized plans for success.
- Top hem CBD blog site in the USA
- New updates daily
- Product reviews
- Marketing Platform
CBD WELLNESS BLOG
Visit the Holmes Organics blog today for the latest information about CBD products, news, information, resources, recipes, business,
- Tons of books on CBD and cannabis
- Reasonably priced membership
- You can’t wrong investing in yourself. Books have millions of dollars worth of information
Step 2: Top 3 CBD Businesses You Can Start NOW
Have you ever wanted the opportunity to start your own brand? What about your own brand in a billion dollar industry with no clear market leader at the moment? This is the chance of a lifetime to get in early and establish yourself as the brand of choice for CBD products.
You will be doing the same thing as people like Rihanna and Kylie Jenner ..finding a distributor and putting YOUR BRAND on the label.
You may be wondering.
- What’s the cost of owning your own brand?
- Who do I buy product from?
- Do I need a license?
Well read further for the answers.
The Free Business Model
- All you need is a URL
- Your Facebook, Instagram, YouTube, Or Your Website
- Promote reputable CBD companies for a commission
- Sometimes up to 40%!!
- Easy Sale
- It’s easy to sell products that help people
- Cookie System
- 60 and 90 day cookies
- Keep earning money from the same person over and over with little to no advertising
Reputable CBD Affiliate Programs
The Inexpensive Business Model
- Fast start for as little as $250
- Buy at 50%-60% of retail pricing.
- Sell at whatever price you want
- Sell as many brands you want
- Mix CBD with your current products and services
- Sell in your shops, restaurants, farmer’s market, trade shows
Private Label CBD
Why You Should Own Your Own CBD Brand?
- It’s relatively inexpensive to start. as little as $2500
- You can play ball with the bigger brands. and win
- You’re in control
- Gain recognition
- You’re known as the expert
- Change people’s lives
- No licenses required
Step 3: Setting Up Your CBD Business Structure
Structuring your business is not as hard as you may think. In fact, it can be done in a very short amount of time without spending a lot of money. You’ll want to follow these steps to make sure you don’t hit any annoying roadblocks down the line with things such as banking and credit card processing.
Name Your Company
Your brand’s name is everything! You need to make sure you choose a name that’s easy to remember, differentiate yourself from all of other CBD companies. Your name needs to be able to withstand the test of time.
Study your competitor’s names to get a better idea of what or what not to name your company. Avoid using words like “Hemp”, “CBD”, “Cannabis”,”Canna” or any similar words in your name. You’re going to put your company in a box and not stand out as much. You could also run into issues with getting a bank to let you open up a business account. More on banking later on in this chapter.
Once you have your name, you’ll want to trademark it. Check the U.S. Patent and Trade Office for any marks on your chosen name. If there aren’t any, it is best that you contact a Patent Attorney. If you find that your chosen name has a mark, then you’re shit out of luck. Choose another name so your can avoid any lawsuits down the road.
Take a day or two to think on it. Also ask your friends and family and get their opinions on a name.
Set Up Your Business Entity
- Visit your Secretary Of State’s website
- Legal Zoom is a great option!
- Speak with an attorney
Receive Your Employee ID Number
- Apply for your EIN online
- IT’S FREE!
Purchase Your Corporate Domain And Email Address
- Use a “.com” preferably. Do not use @gmail.com, @yahoo.com, @hotmail.com
- Use SiteGround, G-Suite, Host Gator, Blue Host, or GoDaddy
- Example: “[email protected]”
Set Up Business Bank Account
Bypass a bank all together and find a CBD friendly local credit union.
Documents needed to open your CBD business account:
- Articles of incorporation/ organization
- EIN number
- Operating agreement
- Visit Law Depot For A Free Operating Agreement
WARNING: BE CAREFUL ABOUT MENTIONING YOUR CBD BUSINESS TO YOUR BANK. THEY MIGHT TELL YOU TO TAKE ALL OF YOUR BANKING ELSEWHERE.
Business Phone Number
Use Google Voice for a FREE business phone number.
- FREE real phone number from Google
- You can send text, phone calls , and voicemail
- You can also use with your current smart phone
If you’re starting an E-Commerce business, you can purchase a virtual business address for as little as $10/month.
Clients and other professionals often search for reviews through listing services such as “Yelp”.
Below are four listing services to register your business for.
Step 4: Designing CBD Merchant & FDA Compliant Website
Let’s build a strong backend that can handle traffic, process transactions , and grow your online presence. If you don’t get this right, then there’s a possibility that your store could lose the ability to make money online. This means that your credit card processing will deactivate after the first transaction is made and you won’t be able to take orders.
Important Website Must Haves
There are a number of requirements that must be on your website before you can be granted a high risk credit card merchant account. Here’s a list of them all:
- Your website name and business name must be exactly the same or closely match.
- DO NOT list Stripe or PayPal as a payment method. At the time of this writing, neither Stripe or Paypal approves CBD transactions.
- You must specify your shipping methods and timeframes.
- You must have a registered domain.
- Your website must be SSL secure. For example your website should read “https://yourwebsite.com”. The HTTPS is important. There should also be a green lock in front of the URL.
- If you offer pet products, they must be in a separate category from your other products. They can not be listed on the same page as your non-pet products.
- All products must list:
- Pictures of labels with ingredients visible
- Terms & Conditions
- Refund Policy
Choose Your Shopping Cart Wisely
Your website’s shopping cart solution is also extremely important. You can use Shopify but DO NOT USE Shopify’s shopping cart, “Shopify Payments”. They will shut down your credit card processing. You may now be thinking, “Well, I can just use PayPal.”. Nope. Once PayPal finds out that you are taking orders for CBD products, they will shut you down.
Use Plug And Play Templates
Creating your website has never been easier than it is today. even if you’re not a technical person. Gone are the days of spending tens of thousands of dollars to hire someone to build your website, which might take over a month to complete. There are free or inexpensive platforms like Wix, Squarespace, or WordPress that allow you to utilize plug and play templates to build your website in hours.
I recommend using the WordPress platform because it gives you a ton of flexibility for cheap. You’re going to need that flexibility to navigate around the pitfalls of setting up your shopping cart and credit card processing.
WordPress also allows you to download themes. But a lot of them are not intuitive to use. My theme builder of choice is Elementor which you get for FREE.
Pictures Are Worth A Thousand Words
You should definitely have pictures of your products as well as lifestyle photos on your webpage. Use professional 3D renderings for your online store’s shop page for a more professional look.
A Nice And Simple Logo
Your logo is usually the first thing people see when they reach your website. So it should be easy to read font with a simple design that describes your name and brand. Use platforms live Fiverr, Upwork, or my favorite Tailor Brands for quick and affordable logos for under $10.
Copywriting Is Everything
Copywriting is extremely critical to your website’s ability to convert. If you want to drive your website viewers from click to close, then you MUST master this skill. To further drive home the importance of copywriting, professional copywriters can command at least $10,000 per page on your website. It’s important!
You may be thinking, “what is copywriting and where do you use it?” In simple terms, copywriting is words that sell a product or service that you offer.
Copywriting can be used on the following:
- All of the pages on your website.
- Social media posts
- Email marketing campaign
- Social Media Ads (If social media platforms ever approve CBD ads)
- Youtube Videos
- And much more
There are plenty of things to write about when creating your copy.
I want you to focus on 6:
- Grab attention with a bold headline.
- Identify the problem your CBD products will solve.
- Identify the solution to the problem.
- Provide proof on why your products will solve the problem.
- Show the benefits in using your CBD products over others.
- Provide Testimonials to show that your products have helped others.
Study the copy techniques of large companies like Bose or Apple. If you can create persuasive copy for your website, you’ll will experience constant sales transactions.
Step 5: Choosing The Right CBD Partner (Wholesale & Private Label)
Choosing the right partner is crucial your longevity in business. The CBD market is booming and there are lots of companies fighting for market share in the space. There are also lots of companies that offer low quality products and are not operating with integrity. You want to do your due diligence and vet companies and their products thoroughly before you partner with them. The quickest way to fail in your CBD business is to offer low quality products and services.
You will soon realize that the CBD industry is highly unregulated so you need to try products from various companies. You also want to pay attention to their processes and customer service.
Here are 5 main factors to consider when choosing your CBD distributor.
- Choose a high-quality product
- Choose a company with great service
- Choose a company that fits with your standards
- Choose a company with logical pricing and product selection.
- Choose a company with great marketing support.
View for more information:
Step 6: CBD Banking & High Risk Credit Card Processing
Without the ability to process credit card payments, your CBD business will be limited. But things are so bad in the industry right now that small businesses are choosing to risk it all to process credit cards in a way that could shut their business down for good.
This topic is definitely a topic you want to stay up-to-date on. daily!
You must have special merchant processing to take payments for your CBD business.
Banks & Credit Unions
Be extremely careful when opening up a bank account with your current bank. Do NOT tell them you’re in the CBD business. If they find out then they will close ALL your accounts and tell you to take your banking elsewhere.
I recommend using a credit union. Some of them are CBD friendly due to the fact that don’t have to follow FDIC rules.
NO PayPal or Stripe
Paypal and Stripe are NOT CBD friendly. If they find out you’re processing CBD product, they will close your accounts.
Top 4 Credit Card Merchant Processors
- Startup friendly
- Lowest rates in the industry
- Use of Square’s Free Swipe
- Startup friendly
- Integrates w/ Shopify
- Custom pricing for each merchant
- Startup friendly
- A+ BBB Rating
Step 7: Marketing Your CBD Business
So you’ve set up your business and now you’re ready to start making sales. The real work begins now. Marketing your CBD brand will be a huge challenge in itself. You’ll have to get really creative but there are ways to get your products in front of eyeballs without a huge financial commitment.
Let’s discuss what NOT to do first.
You Can’t Use These Popular Marketing Strategies
- Facebook is NOT cannabis friendly
- If you try to create ads, they will “red flag” your business
- You run the risk of your Ad account being shut down
- You CAN create posts, stories, videos
- Also NOT Cannabis friendly
- Your ARE allowed to sell CBD but your labels CANNOT say “CBD” anywhere
- Your labels and descriptions should read “Hemp Extract”
Top Ways To Market Your CBD Brand
Word Of Mouth
- An endorsement from a single person can bring lots of attention/ sales
- People believe follow what they see. If one person they trust gives the “OK”, then other people are willing to try
- If your product works, then word can spread
- Start an informational blog or vlog
- YouTube, Facebook Live, IG stories are great ways to market your business
- Have links to your brand and website in your content
- Choose expos that fit your target market
- Allows for face to face interaction
- Leverage other people’s large following to boost your brand for a cheap price
- Focus on “micro Influencers”
- The easiest way to may a quick $1000+ in one day
- Send out email blast to your audience about sales and information
- The most cost effective email solution we’ve found (and use) is called MailerLite. You can create landing pages, email campaigns, list segmentation, automation, etc. starting at $0.
Step 8: Drop Shipping CBD Products
Drop shipping your products can save you lots of time and money. It’s also away to provide a consistent shipping experience for your customer. Now you can focus on building a scalable business while possible working less. Automated Passive Income.
Here’s a couple of solutions for you:
- Start with as little as $5/month plus shipping costs(which your customers can pay)
- 2 Day Shipping
- Fulfill Order 7 days a week
- Integrates with major ecommerce platforms like Shopify and WooCommerce
There are four major requirements for joining the Joy Organics Partners’ Fulfillment Program: