Now is the time to make moves in the CBD market.
The cannabis industry is becoming exponentially lucrative as federal legislation experiences a progressive shift, scientific and medical research advances cannabinoid applications, and health and wellness become a top priority in everyday life.
The legal binds left over from decades of misinterpretation surrounding CBD and the cannabis industry are beginning to loosen if not fall off altogether, and natural health supplements that work are more critical now than ever as the planet continues to seek relief from a global pandemic.
The CBD market is flourishing despite economic uncertainty and supply chain disruption resulting from a worldwide health scare.
A second wave of the Green Rush has opened an optimal window for cannabis entrepreneurs looking to take their cannabis business in a different direction – one aimed toward hemp cultivation and non-psychoactive healing.
If you’re asking yourself, “Is it too late to start a CBD business?” the answer is no. In fact, now is a perfect time.
Why Should I Start a CBD Business Now?
From Covid to cancer, skincare to stress, and pain management to Parkinson’s Disease, the cannabis field of research is booming.
Most recently, a study on the relationship between cannabis compounds and Covid-19 found that orally-ingested cannabinoids may prevent Covid-19 infection.
While the benefits of CBD continue to be revealed, only now are they being appropriately sought after and maximized.
Federal legalization of hemp-derived cannabis products in the 2018 Farm Bill somewhat subdued the stigma surrounding CBD and hemp products and influenced legislative adjustments to state-level cannabis industries.
CBD and hemp’s social dynamic has also generated a more accepting orientation toward cannabis as focusing on our health and wellness has become more critical than ever.
As federal laws and scientific advances (such as those involving Covid-19) continue to evolve, consumers can expect to see increased interest in pharmaceutical and prescription CBD products, as well as products and formulas that contain more than just CBD.
As the ever-expanding field of cannabis research explores cannabinoids and their benefits, cannabinoid blends and mixtures are becoming extremely popular.
Combinations of CBD and CBN, CBD and CBG, and CBD and CBDA, among others, are diversifying the market as Sleep Formulas and Defense Formulas aimed at immunity protection are being developed.
As these game-changing discoveries and legislative alterations are being made, the CBD market and CBD consumerism are rapidly expanding, creating the perfect time for prospective CBD business owners to enter the market.
According to Forbes Business Magazine, CBD sales in the United States reached $4.6 billion in 2020.
An exponential growth trend is expected to continue, with CBD sales projected to jump to $20 billion by 2024.
Comparing these numbers to the $1.9 billion market high of 2018, a rise to $20 billion by 2024 would render a 49 percent annual growth rate.
This rise comes as the market expands, federal law continues to change, and scientific research prompts increased interest in CBD.
Step One: Your CBD Business Vision
Decide what CBD experience and products you’d like to sell. More options than ever are available, with oils, tinctures, vape pens, edibles, and topicals lining real and virtual shelves.
Once you’ve established that you will focus on CBD skincare and cosmetics or CBD baked goods (hello, CBD donuts), you can start to build out the theme of your business.
Experience and inventory are essential because they will dictate the type of consumer you want to sell and appeal to, the marketing restraints you will face, and the legislative barriers you will have to navigate.
Make sure your vision is specified early on because it will impact every other step in your business plan.
Step Two: The Boring (But Super Important) Stuff.
The less exciting but arguably most crucial part of starting any CBD business is obtaining the necessary license, registration, and certificates your state or local governing province requires.
Standard licensing includes hemp manufacturing and registration, seed licensing, wholesale and retail licensing, hemp food establishment permits, and distribution licensing, but requirements vary between states.
If you’re not sure where to locate these documents, a quick search for CBD registration and licensing in your area should do the trick.
Searching for your state government’s agricultural, food and safety, and public health departments usually point you in the right direction, too.
Familiarize yourself with your area’s cannabis cultivation and wholesale laws and expectations as you compile the necessary paperwork.
A CBD business owner needs a comprehensive understanding of the market they will be operating in, which includes setting yourself up for success by ensuring you and your partners (whether manufacturers, wholesalers, or distribution entities) are providing the highest-quality business services and products.
Achieving quality involves finding legitimate wholesale and retail providers.
Whether you are planning on wholesaling CBD products or going the retail route, caliber and transparency must be a top priority.
First-rate CBD wholesalers will make their reputation known by readily-providing documentation of impartial, third-party lab testing and associated certificates of analysis to prove product purity, potency, and compliance with federal law.
An effort will also be made to verify CBD commodities are clean and free of pesticides, bacteria, and chemicals – criteria that are integral to quality CBD sales and desirable to many consumers.
Supplying consumers with product ingredients, including carrier oils, cannabinoid types, and concentrations or flavor additives, will also instill a sense of confidence in and build loyalty behind the CBD brand you are creating.
In addition to analysis certification, many CBD product manufacturers intent on providing wholesale goods will obtain some of the following certificates as well:
- The U.S. Food and Drug Administration (FDA) Current Good Manufacturing Practices (CGMP) certification
- The European Union, Australian, or Canadian Organic Certifications and other organic and eco-farming certifications.
- The National Science Foundation International Certification
A recent trend in the cannabis industry is using quick reply (QR) codes on product labels.
Some states, such as California, consider making this an industry-wide requirement so that manufacturers, retailers, distributors, and all cannabis suppliers would have to label their products with easy access to business licensing and third-party lab testing approval.
QR codes emphasize consumer safety and transparent marketing efforts that allow potential customers to develop a sense of security in particular products and brands.
At the same time, CBD businesses can set themselves to a higher industry standard and define themselves as trustworthy vendor.
Keeping up with federal and statutory law, manufacturing standards, and industry trends will help your business maintain customer loyalty.
Step Three: Opening Up Shop
Further market trends expect to see a rise in the amount of brick-and-mortar CBD stores popping up and an increase in CBD e-commerce online availability.
According to Business Insider, 60 percent of CBD sales are conducted online.
With more than half of transactions occurring via websites and an expectancy for traditional business locations to increase, both conventional storefronts and e-commerce platforms can enhance your business’ success.
The best e-commerce sites for building your website include platforms such as Shopify, Wix, and Squarespace.
E-commerce sites are essential because they allow you to quickly and readily sell products from your site and enable you to reach a far more comprehensive array of customers.
Online e-commerce venues provide business owners with a fast and efficient way to process orders and payments, shipping and handling, and convenient customer service.
Those looking to pursue a brick-and-mortar establishment should note that the key to CBD realty is not the time-honored mantra of location, location, location.
Instead, it’s all about legislation, legislation, legislation.
Whether online or on the ground, how and where you set up shop will depend on local and state laws. So be sure to familiarize yourself with your market rules before flipping around an open sign.
To be open for business, you need to have business. This is where marketing comes into play.
CBD marketing is tricky when you consider the conflicting restrictions at a federal versus a state level.
For example, some states like Florida permit their agricultural hemp industry to manufacture and sell hemp extract products intended for consumption.
Yet, the FDA does not consider CBD a safe food or beverage additive or supplement.
Similarly, many users buy CBD to treat medical conditions or deficiencies symptoms. Yet, the FDA prohibits the marketing and labeling of CBD products that could be conceptualized as medical remarks or advice.
Navigating these legal barriers and boundaries requires attention to congressional developments.
Should the FDA authorize CBD as a dietary supplement, the cannabis industry could experience a massive shift in market exposure, and an expanded playing field means more competition.
With a more saturated CBD market on the horizon, keeping up with industry affairs is essential to businesses getting their foot in the door now.
Legal restrictions surrounding cannabis advertisement and marketing can also be complicated and prevent most CBD businesses from marketing on major distribution sites like Amazon or partaking in paid promotion on social media.
Opting to advertise your products through alternative search strategies and customer retention might prove more secure, less stressful, and avoid a marketing ensnarement.
However, as the cannabis industry continues to develop, marketing measures will be sure to shift, so pay attention to transitions that may allow for market strategy expansion.
Your business needs to be prepared for the political, social, and medical inputs that are upping the ante, and there is no better moment to take advantage of the market and go for the gold – or should we say green – than now.