Demand for cannabidiol, commonly known as CBD, is skyrocketing. A new study suggests the CBD market, which includes pharmaceuticals, food and beverages, and beauty products, could reach $20 billion by 2024. It’s clear the demand for CBD is there and customers say it helps them with everything from stress to chronic pain. While studies on CBD’s effectiveness for various conditions is still ongoing, there is encouraging research, especially surrounding the cannabinoid’s potential for treating anxiety disorders. If you were thinking about getting into the CBD business, there’s no better time than now. Let’s go over five steps to take your CBD business from idea to reality.
1. Educate yourself about CBD and the Law.
Before you go any further, it’s important that you understand what CBD is. Unlike THC, which is also a cannabinoid found in the cannabis plant, CBD doesn’t produce the intoxicating “high” effect when used. The legality of the two products is also different. Federal guidelines state that any product containing more than .3% THC would be considered illegal, but industrial hemp produces leaves that have less than .3% THC, so hemp CBD products are much simpler to sell than cannabis products. Federal regulation of CBD is still in the early stages so the industry is currently operating in a bit of a grey area. This means marketing CBD products isn’t permitted by some websites and social media platforms, so do your research.
2. Develop a Business Plan.
Once you’ve learned more about the industry and have an idea for what your niche in it will be, you need to start devising a business plan. You need to explain your proposed product line, your target customer, and your financial strategy for potential investors and stakeholders. Seek expert advice if you’re struggling. A comprehensive business plan that covers financing, marketing, planning, execution, and sales forecasting will provide the foundation for your new company.
3. Identify Suppliers and Products.
Most businesses won’t handle their own CBD manufacturing, so you’ll need to source your products from a manufacturer that you can trust. If your supplier cultivates their own hemp, ask about their farming practices and look into the COA (certificate of analysis) for their products. You want to know what you’re getting in terms of purity, concentration, and percentage of the relevant cannabinoids. Many CBD companies use a third-party test to confirm the information being provided by a potential supplier. The best supplier will be able to offer you a range of options at a competitive price.
4. Create your Store.
Whether you’ll be selling online or in a brick and mortar store, every businessperson needs somewhere to sell their products. An online store is much simpler, requires little-to-no financial investment, and will get your business up and running immediately, so even if you do eventually envision having a physical space, it might be wise to start online. When writing up product descriptions and deciding on a marketing strategy, remember that there are legal restrictions on the kinds of health-related claims you can make and on what platforms you can use to advertise. Staying on top of the evolving regulations and legalities is an essential part of maintaining a CBD business.
5. Build your Brand.
Once you have the building blocks of your business (a plan, products, a store), you’ll want to focus on building your brand. What makes your CBD business stand out? There’s a lot that goes into branding, but it’s important that you invest in creating a visual identity for your company that’s appealing to customers. In that regard, the CBD business isn’t that much different from other industries. For example, women’s white dresses are a basic, popular product that are always in-demand for one occasion or another. White House Black Market offers personalized service via their style team, high-quality craftsmanship, and versatility that makes their products work in your everyday life. Wear you new White Black Market dress on launch day, during important investor meetings, and beyond. You’re an extension of your brand, so it’s important that it shows.
There’s no denying that there are still hurdles to entering the CBD business, but the market is exploding and there is a lot of potential for profit in the industry for aspiring business owners. Research and preparedness in combination with creativity is the recipe for success in the CBD world. Operating in a shifting legal landscape with restrictions on marketing is a significant challenge, but there are still plenty of ways to build your brand and grow your audience. If you educate yourself and market yourself creatively, your CBD business will be on the road to success.
