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Wondering how to start a CBD or cannabis business? Find out how to take advantage of CBD business opportunities in the booming CBD industry. Looking to start an online CBD store? Our website builder can help you start your online CBD business and start selling CBD products online Before this year began, projections of CBD sales were high. With the world facing an unexpected pandemic, interest in natural health products skyrocketed. That’s why now is a better time than ever to start a CBD business. Starting a CBD business can seem daunting, even overwhelming. You’re talking to people who’ve done

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?
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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.

Start A CBD Oil

Over the last few years, cannabidiol (CBD) oil has grown from a niche alternative treatment to a multimillion-dollar market. And as more people discover the benefits of CBD, the medical community and legislators alike are taking notice. CBD is used on a daily basis by millions of people, and because of the credibility given to it by doctors, researchers, and lawmakers who support it, more people are trying CBD for the first time every day.

Whether you use CBD yourself or you’re just interested in the industry, now is a fantastic time to enter the market and open your own online CBD store. Shift4Shop has everything you need to handle this unique industry and tap into the huge opportunities offered by the CBD market. You’ll have access to the most powerful eCommerce tools available for starting your store, reaching your customers, and getting the brand recognition that leads to a successful business.

While there is momentum growing in terms of FDA approval and lessening of restrictions on selling CBD products, it can still be a very difficult vertical for businesses to navigate. This is largely due to the lack of federal legislation on the topic in the United States. In particular, eCommerce businesses wanting to sell CBD-related products must adhere to the specific and widely varying laws in each of the 50 states. This guide will help you understand and be better equipped to thrive in this fast-growing industry.

Understanding CBD and CBD Products

There is a lot of confusion around CBD products due to its relationship with marijuana, so let’s go over the facts. CBD is short for cannabidiol, a compound found in all cannabis plants. What makes CBD oils different is that they do not contain THC (tetrahydrocannabinol) which is the compound responsible for the “high” associated with marijuana. CBD itself is completely non-psychoactive, meaning it does not affect the brain like THC does.

People take CBD for a variety of reasons including severe or painful conditions and anxiety relief. Everyone who uses CBD also has their own preferred method of taking it, which can be anything from vaping it to swallowing a pill. As a CBD seller, it’s important for you to understand the types of CBD products available and how they are used, as well as which types of customers the different products appeal to.

CBD Tinctures

A tincture is a concentrated extract made by soaking herbs in very strong alcohol for long periods of time, or in the case of CBD tinctures, by combining natural hemp oil with alcohol or another solvent. Tinctures are administered by placing a few drops of the liquid under the tongue. Only a small amount is needed for a dose because they are so highly concentrated. This method of administering CBD appeals to people who want the fastest way to take CBD and feel its effects quickly.

CBD Isolates

An isolate is a pure substance that has been extracted from its source and refined into a powder. CBD isolate has been processed to remove all the other natural plant substances such as chlorophyll and wax and leave only pure CBD behind. Isolates are colorless and flavorless and can be used in a similar way to tinctures, or can be added as an ingredient to infuse CBD into a variety of foods and beverages. Isolates are popular with customers who like to mix their own CBD products at home.

CBD Topical Formulations

A CBD topical formulation is a cream, salve, lotion, gel, or other preparation made to be rubbed into the skin. These products can be applied directly to inflamed or painful areas similar to other pain relief ointments. They also provide an alternative for customers who don’t like to take CBD orally. These treatments can also include other ingredients like menthol to provide a cooling sensation. CBD can also be used in massage oils.

CBD Vaporizers and Vape Concentrates

Inhalation is a popular method for CBD delivery because, much like with tinctures, the CBD is absorbed directly into the bloodstream and so provides immediate effects. CBD concentrates can be vaped similarly to nicotine e-liquids, so vape supply stores often expand into CBD or vice versa (learn more about selling vape online). Traditional smoking methods like water pipes are also popular, but some CBD retailers find these products troublesome due to drug paraphernalia laws (regardless of their use with legal CBD) and the difficulty of shipping complicated glass items.

Summary of CBD Products and Accessories You Can Sell:

  • CBD tinctures
  • CBD topical formulations
  • CBD isolates
  • CBD vaporizers and concentrates

This list is a summary of hundreds of individual products which can all be sold quite successfully through an online CBD store. Customers will also need to restock their CBD products, including their preferred concentrates and delivery methods which could include numerous types of vaping accessories. If you build your CBD eCommerce website with advanced software like Shift4Shop, you can make the reordering process much easier for your customers by implementing a subscription service for needed products. You can also offer product bundles, like edible variety packs, CBD vape starter sets, and more.

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Choosing a CBD Supplier

Choosing a CBD supplier is a very important decision that will affect the quality of your products, the satisfaction of your customers, and the reputation of your brand. Because of the well-known benefits of CBD, “fake” CBD oils are found in stores everywhere. These oils are considered not to be true CBD because they’re derived from hemp seeds — which contain very little CBD — rather than from the stalks and leaves of the plant where the most CBD is found. It’s crucial for your business that you choose a manufacturer that makes genuine CBD that will have the effects your customers want. This way, you can immediately differentiate your business from the brands that provide no benefit and only seek to cash in on a trend.

When evaluating a CBD supplier, find out as much as you can about their manufacturing process. Remember that if you want to sell CBD oil products, those products must be derived from industrial hemp with a THC content of less than 0.3%, processed from the plant itself and not the seeds. Here are some other considerations to keep in mind when

Medical Claims

CBD retailers are not allowed to make medical claims on their websites, and neither are suppliers. Even though research shows potential benefits, the Food and Drug Administration (FDA) hasn’t yet evaluated these statements. CBD suppliers, including both wholesalers and consumer-level retailers, are required to display the FDA’s disclaimer on their website. If you’re looking at a supplier who makes medical claims about their CBD products, be aware that these statements have no FDA backing. Don’t choose a supplier based on medical claims, and if the supplier has particularly bold claims on their website (e.g., “cures cancer”), you likely want to avoid that supplier entirely, as breaking this rule means the supplier may be breaking others as well.

Pricing

As a business owner, you should always look for ways to lower your costs, as long as you don’t compromise on the quality of your merchandise. CBD suppliers’ pricing can vary greatly and sometimes this is reflected in the quality of the product. For example, higher-priced CBD products are often more pure and potent — but this isn’t always the case. Make sure you learn as much as possible about the supplier so you can learn whether the quality of their products justifies the pricing. Likewise, stay away from suppliers who sell at abnormally cheap prices. These rock-bottom prices are almost always a sign of cutting corners and producing an inferior product.

Extra Services

Some CBD suppliers offer additional services like dropshipping and private labeling. While the quality of the product should come first, it’s also very helpful to know if a supplier can provide these services. If you’re planning on dropshipping your CBD products, this option is crucial to your business model. In addition, private labeling allows you to sell fully branded products with your own business name and logo, which helps you become established in the industry and start earning the trust of your customers.

Understanding the Legality of CBD

Whether you plan to stock inventory or sell by dropshipping, the quality of your supply chain makes all the difference. It’s also vital to choose a supplier that’s right for your business and can get your products to you in a timely fashion. Since the CBD industry is growing, it’s becoming easier to find good suppliers that will work well with you.

Federal Regulations

The Agriculture Improvement Act of 2018 (commonly known as the 2018 Farm Bill) legalized hemp on the federal level by removing hemp and its derivatives from the federal list of controlled substances. This legalized CBD so long as it derives from “hemp,” which is defined as the plant Cannabis sativa L. and any part of that plant, but only if it contains no more than a 0.3% concentration of delta-9-tetrahydrocannabinol (THC), which is the psychoactive component of cannabis.

Any plant that contains a higher than 0.3% concentration of delta-9-THC is classified as marijuana and remains a federally controlled substance and illegal on a federal level. And because it is still illegal, any CBD derived from such marijuana is also rendered illegal. The FDA has determined that CBD constitutes a drug or drug ingredient because a form of CBD is the active ingredient in an FDA-approved prescription drug (the drug EPIDIOLEX, for the treatment of certain seizures). Because of this, the FDA has taken the position that it is not lawful to add CBD to food, dietary supplements, or pet foods, even if the CBD comes from legal hemp. The same is true for other forms of delta-9-THC, since there are two drugs approved for therapeutic uses that contain a synthetic version of this substance.

Accordingly, products containing cannabinoids cannot currently be legally sold as dietary supplements nor can they be added to FDA-approved ingredients and sold legally. The FDA regularly issues warning letters to CBD sellers advising that the FDA considers this the sale of unapproved new drugs in violation of the Federal Food, Drug, and Cosmetic (FD&C) Act. In addition, the FDA considers any claims that CBD can be used to treat medical conditions or for other therapeutic uses as the sale of misbranded or mislabeled drugs also in violation of the FD&C Act. Misleading labels and unsubstantiated claims on products may also be deemed deceptive trade practices in violation of consumer protection laws.

State Regulations

On a state level, there is a vast range of laws, regulations, and treatments of both hemp-derived CBD and marijuana-derived CBD. Caution is warranted because state laws are not always equivalent and do not necessarily allow the same conduct. State laws concerning hemp-based CBD may permit or prohibit one or more of growing, selling, and/or using. States may also treat sales of CBD products differently, whether they are for medical or recreational purposes and whether or not they can be incorporated into foods, dietary supplements, and/or topical lotions.

Many states follow federal guidelines on these issues but many do not. When selling CBD products, it is important to show that the specific CBD products you are selling are lawful within the state in which it operates. Keep in mind that several states also require retail licenses and/or registrations for merchants to sell already-processed CBD products, including Louisiana and New York.

Marketing Guidelines

The FDA has advised that whether a CBD or other hemp-related product may be marketed and sold depends, among other things, on the intended use of the product and how it is labeled and marketed. In particular, ingredients that are derived from parts of the cannabis plant that do not contain THC or CBD might be able to be marketed as dietary supplements and may not require the same type of lab certification. In any case, all products marketed as dietary supplements must comply with all applicable laws and regulations governing dietary supplement products.

In no instance may CBD products be marketed using unsubstantiated claims that the product can prevent, diagnose, mitigate, treat, or cure any diseases, and should NOT contain any misleading claims or statements lacking substantial scientific support.

Any marketing of CBD across state lines (which includes most eCommerce merchants) will implicate federal regulations in addition to the laws and regulations governing each state involved in the transaction. CBD sold within a state will be governed primarily by that state’s laws, although some federal regulation may still be a factor.

Selling CBD Through
Shift4Shop

Some eCommerce providers won’t allow you to sell CBD, but with Shift4Shop this is not a problem! In fact, Shift4Shop has more built-in features to help a CBD business than any other shopping cart software.

Here are some of the reasons Shift4Shop is the best eCommerce platform for an online CBD store:

Support for High-Risk Payment Providers

While CBD is legal to sell, it’s considered a high-risk industry by payment processors and many providers won’t work for sales of these products. Shift4Shop, however, provides a seamless payment experience for Shift4Shop customers.

Easy Tax Setup

CBD is subject to taxes that vary from state to state, including sales tax and sometimes a state-specific cannabis-related tax. Shift4Shop makes it simple to automatically charge the correct tax rates — no matter where your customers are located.

Full Suite of Powerful SEO Tools

Many of the most familiar online advertising methods aren’t available for CBD sellers — for example, Google and Facebook will not run CBD ads. Therefore, a strong search engine optimization (SEO) strategy is crucial. Shift4Shop has the best built-in SEO features in the industry, all geared toward helping your website get listed fast and start gaining rank immediately.

Built-In Blog and Content Pages

Since SEO is so important for CBD sellers, you need a way to fill your website with high-quality content that will rank well in searches. With Shift4Shop, you can instantly add a blog to your site for posting the latest CBD news, studies, homemade edible recipes, product updates, and anything else you see fit. You can also create unlimited extra pages to provide vital information like your store policies, product purity guarantees, general CBD educational information and FAQs, and much more.

General Compliance

Here is a quick checklist for you to help make sure you are approved to sell through Shift4Shop:

Post all ingredients, product descriptions, and labels in your shop in order for Underwriting to review and ensure that the products are FDA compliant.

Activate Shift4Shop age verification tool

Complete the CBD Compliance Statement Form and agree to the terms posted on shift4shop.com.

Provide a copy of your hemp handler license or special hemp processor license based on the state’s requirements for the sale of hemp-derived CBD products and/or state, tribal, or federal licensing information during the submission of your store (listed under the compliance statement).

Certify your products with a third-party laboratory for all of the listed products for sale in your store and post the results from the laboratory for consumer review and underwriting purposes.

Several states require retail licenses and/or registrations for merchants to sell already-processed CBD products, including New York and Louisiana.

CBD Labeling

Merchants must label CBD products in conformance with applicable regulations and in a manner that mitigates risk of regulatory agency enforcement actions. As each state may have its own laws that govern labeling (and sometimes these laws can conflict with one another), there is no one-size-fits-all approach. If a particular state is a relevant jurisdiction, its laws should be more thoroughly examined. Below is a summary of general guidelines that pertain to federal labeling requirements. Generally, labels should include:

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10 Steps to Starting a CBD Business in 2022

Before this year began, projections of CBD sales were high. With the world facing an unexpected pandemic, interest in natural health products skyrocketed. That’s why now is a better time than ever to start a CBD business. Starting a CBD business can seem daunting, even overwhelming. You’re talking to people who’ve done it themselves! That’s why Todd Smith, co-founder of Joy Organics, is sharing these 10 steps to make the process less daunting and help you start a CBD business.

1. What’s Your Why?

Every successful company needs to have a purpose. There’s a reason you’ve decided to start a CBD business. Knowing “ what’s your why ” will help you make many vital decisions about business operations.

  • Is this a hobby business to run with your family?
  • Are you looking to make a full-time career change?
  • Will this brand become a multi-million dollar business you intend to sell?

Each of these scenarios requires different resources, business strategies and human hours.

Knowing why you want to start a CBD business also helps you pinpoint your motivation. As Napoleon Hill said, “The starting point of all achievement is desire.”

Desire isn’t a hope or a wish. It’s what gets you out of bed and propels you to make tough and sometimes uncomfortable decisions. Without desire, we wouldn’t do the little things that make for big successes.

2. Who’s Your Target Market?

As much as you’d like to reach every demographic, it’s not feasible. You need to figure out who you’re selling to, so you can design your brand around their preferences. Your target market dictates everything from packaging to blog content to marketing campaigns.

  • What do they do?
  • Where do they shop?
  • What do they care about?
  • What is your connection with them?
  • Does selling to them excite you?

You can’t just be a one-size-fits-all company.

Creating a connection is pivotal to reaching your demographic. You need to know how they think and what their needs are, so that your brand can provide unique solutions.

We’re lucky that our co-founder, Joy Smith, is our target demographic. She’s a woman between the ages of 35 and 65, who cares about the environment and shops at Whole Foods. Joy knows what her peers find appealing and we cater to those needs.

Since Joy experiences the benefits of CBD, sharing them with others is a desire. Therefore, it excites all of us to be a part of the CBD industry. Does your target demographic spark that same passion? If not, reconsider your target market.

3. How Will You Market Your Business?

To start a CBD business successfully, you must invest a lot of time, money, and energy into marketing. Marketing is where identifying your target market comes into play. You have this clear vision of your ideal customer…now how will you pitch it to them?

First, ask yourself where you’re going to market:

Creating a marketing plan is where you peel back the layers of your customer. Are they eco-friendly people who shop at farmers markets? Then get a booth at local fairs in your area.

Maybe they’re retired people who need joint support? Your resources are better suited on flyers on retirement home bulletin boards and local circular advertisements.

Perhaps they’re millennials who are strictly online shoppers. Then you’ll need to download funny GIFs and up your social media campaigns.

4. Select Your Domain Name

Before you name your brand, see if the domain name is available. If so, buy it before you start design production. You don’t want to run into legal troubles or lose out on the domain after you’ve already invested money in packaging.

Even if you plan to start a CBD business offline, your brand will still need an online presence. You will rely on Google location services for customers to find you.

Here are a few tips for choosing a good domain name. Your domain name should be:

  • Appealing to your target market
  • Easy to spell
  • Easy to remember
  • Two words
  • Ending in a .com extension

Pick a memorable name which people will associate with that particular item. For example, Burger King sells flame-broiled burgers to 16-35-year-old males. Forever 21 makes clothes for 17-24-year-old females. These brand names conjure immediate images of the brand and its customers.

Joy Organics’ target demographic seeks products that support a healthy and happy lifestyle. Hence, “Joy.” They’re also environmentally conscious. So, “Organics” resonates with them.

Lastly, make sure you can procure the .com extension. There is far more internet credibility with .com than .co or .xyz, for instance.

Research if the domain is available on GoDaddy.com . Click their free “WhoIs?” database and see who owns the name.

We did this when we started Joy Organics. After finding the owner, we paid for the domain name, and were ready to start a CBD business!

5. Create Your Brand

Creating your brand revolves around meeting your target market’s needs, desires, and expectations.

Consider things like

  • What are their favorite colors?
  • What photography do they find attractive?
  • Which design elements do they like?

Scroll through websites where your target market shops. See what design aesthetics resonate with your brand.

Don’t reinvent the wheel!

When you start a CBD business, you’re not going to compete with the big guns right out of the gates. Learn from them instead.

Once you have your brand identity in mind, it’s time to bring your vision to life. Decide whether you’re going to take photos and create designs on your own, or hire a professional. If you hire a professional, don’t be afraid to get hands on, ask questions and collaborate to see your vision through.

6. Design Your Logo

Logos are almost more synonymous with a brand than their name. Everyone knows Nike from the swoosh. Therefore, designing your logo is one of the most important steps for starting a CBD business.

Through the Joy Organics White Label Program, we’ve learned a lot about what looks good on tincture bottles, and what doesn’t.

Here are some tips for design a good logo:

  • Keep it simple
  • Avoid shadows
  • Make it large enough to stand out

You can try to find your own professional designer online. If you want a few options to choose from, you can sign up for the gig auction site, 99Designs.com . For a more collaborative effort, you can also work with Joy Organics. We have state-of-the-art design programming that makes unique and eye-catching logos.

7. Build Your Website

Your online presence depends on a high-functioning website. Thankfully, building a website yourself is easier than ever. Choose a template you’d like to download from ThemeForest and integrate it with WordPress, Shopify, GoDaddy, or another host.

It’s important your website is responsive, meaning it’s optimized for viewing on:

Of course, you can always hire a professional. This is where your “why” comes into play. If you want to start a CBD business as a hobby, then don’t use your resources to hire a professional. Build the site yourself.

Make sure you have high-quality product shots on your website with easy navigation. People shouldn’t have to search for what you’re selling.

Also, keep up with content. Content is an opportunity to inform, and ultimately, convert your customers. It allows people to connect with your brand.

Plus, Google considers the amount of time people spend on your site. If you create engaging content that holds people’s attention, Google is more apt to recommend your page to others.

If your goal is to create a multi-million dollar company, hire a professional. They will optimize your site for functionality, searchability, and aesthetics.

8. Apply for Your CBD Merchant Account

You can’t just go to your bank and get a merchant account that does CBD. Apply for a CBD merchant account in advance. It takes around four to six weeks.

In the United States, there are currently around seven banks that do CBD processing. If you apply for one that doesn’t do CBD processing, they’ll cut you off without advance notice. Email [email protected] , and we’ll be happy to tell you which banks accept CBD merchant accounts.

9. Select Your CBD Partner

There are two main questions you must ask yourself when you start a CBD business:

  • Do I want to partner with an existing brand?
  • Do I want to create my own brand?

Partnering with a reputable brand like Joy Organics is an excellent way to start a CBD business without incurring too many costs upfront. You can order products in bulk and don’t need inventory on-hand. Plus, our tinctures and Jarred salves are now USDA certified organic, so you get an even better product when you partner with us.

However, creating your own CBD brand offers you more autonomy. You have more control over creating brand loyalty. While the risk is greater, you might reap even greater rewards.

10. Advertise Your Business

Even if you hire a professional, be sure to educate yourself on how to advertise your business . You’re creating the brand that’s fostering a connection with your target market. Research how to forge that bond, so you can make educated decisions about spending your resources on advertising.

Make sure you’re specific and strategic. Hire marketers who specialize in your needs. Hire writers who are well-versed in search engine optimization (SEO). If you’re looking at pay-per-click (PPC) campaigns, hire somebody with a record of success in that avenue. Your business’ success lies in their hands.

CBD is a different animal than other products. Don’t hire an advertising agency that’s not familiar with the legalities and nuances associated with the CBD industry. If you need references that our partners love, just ask. We’d love to help!

Connect with Joy Organics

If you are serious about starting your own business, reach out to one of our wholesale and private label specialists. Everyone on the team has helped hundreds of people start their own CBD businesses and would be happy to give you advice and guide you through the process. Fill out our contact form and someone will be in touch shortly.

Thanks for reading! To show how much we appreciate you, we’re going to give you 16% off your next order. Just use code READER16 at checkout!

Todd Smith is Joy Organics Chief Partnerships Officer and Co-founder. Before Joy Organics, he worked in the wellness and nutritional industry for over three decades and helped generate over 1 billion dollars in supplement sales. He has applied that knowledge and experience to empower over 1000 businesses through Joy Organics’ partnership programs. Todd is also the author of a book, podcast, and blog titled Little Things Matter.

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