The CBD landscape has attracted what people see as a gold rush. While it is still not mainstream and many people are misinformed about it, a growing number of people are turning to CBD benefits to assist with ailments like pain, insomnia, depression, anxiety, Alzheimer’s, and more.
How do you get a slice of this pie?
Growing hemp and manufacturing CBD products that comply with the law are one thing, but turning your efforts into a profitable business is another. This industry is also largely unregulated, so you need to compete with the scammers and companies that are ignorant of or neglect the rules.
Thankfully, consumers are becoming increasingly knowledgeable about what to look for in trustworthy brands, so the higher you set the bar with transparency and integrity, the better off you’ll be. Here are a few things you’ll need if you want to run a successful CBD business:
1) Construct a business plan
Like with any business, one of the first things you need to do when setting up a company is to compose a detailed yet flexible business plan.
How are you going to approach your business, what are your goals, and what steps will you take to achieve them? You’ll need land if you are going to grow hemp yourself, or find a reliable supplier if you are not.
Take time to think about concrete goals that you can work toward: vague statements like “I want to sell lots of CBD and make millions” is not sufficient, but “I want to sell X bottles of CBD for pain relief by Y period of time” will help steer your decisions and operations.
2) Take care of the legalities
There are many legalities to tend to when running a business in the cannabis world. To begin, you’ll need to be a legal entity, so establish yourself as an LLC, register for taxes, and open a business bank account (and keep your business expenses separate from your own).
As a cannabis business, you’ll also need to obtain necessary licenses and permits, or else your business could be shut down or hit with significant fines. It’s also critical to look into acquiring a Certificate of Occupancy if you are going to lease a space. You can learn more about the necessary legal steps you’ll need to take at How to Start an LLC.
3) Get the right payment processor
This hurdle is one that some newbie cannabis entrepreneurs do not realize they need at the beginning: a reputable payment processor. Because your business will most likely take advantage of ecommerce landscape, you may have assumed that you can use standard ones like Square. However, many popular processors do not allow CBD sales.
Instead, you need to find a high-risk processor that enables CBD, and it needs to be based in the United States (or else you risk losing a high percentage of your sales).
4) Find the right partner
You don’t have to dive into this industry without aid, though. According to Leafly:
“For new entries to the market, knowing how to field those questions and educate customers is one key to establishing a trusted brand. While retailers looking to add CBD products to their offerings can’t become experts overnight, they can get a crash course by partnering with a seasoned private label manufacturer like NF Skin. By leveraging the experience of a seasoned partner, emerging brands can ensure they’re well-placed to earn the trust of the growing CBD market.”
If you want to be the trustworthy company consumers need you to be, you’ll need to be honest about your production practices and knows as much about the science behind CBD for pain relief and other ailments as possible. Well-established partners can give you advice and boost your credibility.
5) Establish your presence online
The marketing part of operating on the CBD landscape can be tricky. Platforms like Google, Facebook, and Instagram do not allow CBD advertisements, so you’ll have to get creative for spreading the word about your brand.
Start with identifying a niche audience: what corner of the cannabis market can you appeal to best?
Establish your web presence with compelling and informational content. Would people purchase products from a business sells them without also providing information about them? Probably not—they are far more likely to buy from brands that double as resources regarding the industry as a whole. So, produce insightful, informational, and exciting content through channels like blogs and social media.
Starting a business in the CBD field can be more complicated than in another, but if you hold yourself to a high standard and keep your audience in mind, you can become a profitable company. What other elements do successful CBD brands include?