Table of Contents
- What’s CBD?
- How to Start a CBD Business
- Don’t Let the Lucrative CBD Business Pass You
BDS Analytics predicts CBD sales in the U.S. market to hit $20 billion by 2024. This couldn’t be any further from reality as 2020 is already seeing tremendous growth with online CBD sales standing at 60% of the sales channels.
But what’s fueling this incredible sales increase?
Many people across the globe are growing open-minded about CBD with a growing interest in natural health products. People now see CBD as a natural remedy for pain, sleep disorders, and stress.
This is a market you want to leverage, but only if you understand how to start a CBD business. But before that, let’s first understand what CBD is.
CBD is a compound found in hemp plants and cannabis with one or more than 100 cannabinoids. Unlike popular belief, CBD doesn’t intoxicate but offers therapeutic and health benefits. CBD oil can be sold on its own or in other additional products.
How to Start a CBD Business
While the CBD market has a lot of potential, starting the business needs proper preparation. You must learn how to start selling CBD, what are your target customers, the legal requirements, among other factors. If all these sound like rocket science, then these cannabis business tips will be of great help.
1. Understand the Laws and Regulations
Due to the federal government’s stance on marijuana, CBD is not just a business you can start of the blue. The laws regarding marijuana and hemp use are still not clear, making this business a risky one.
So, should I sell CBD? The answer to this question depends on the type you’re planning to sell.
Up to 50 states in the U.S. have legalized the use of Hemp-extracted CBD. This means for you to sell CBD, it must come from hemp with THC (tetrahydrocannabinol) levels remaining at 0.3%. CBD from marijuana contains higher THC levels making it illegal in several states in the U.S.
2. Understand Your Target Customers
While CBD is increasingly becoming popular, not everyone uses it. You need to understand your target market to help you figure out how to package your marketing campaigns.
Understand how your customers think, how they shop, and how you can connect with them. You also need to know their needs. Find a connection that will see you find unique solutions.
3. Figure out Your Location
Where are you going to set up your CBD store? This is an important question considering that many states still consider CBD illegal despite being legalized at the federal level.
But even if you’re in places where CBD is legal, you still need to be wise about setting up your retail location. Consider areas with high footfalls. If you target the older generation, consider setting up the shop in retirement areas.
4. Payment Processors
Due to the risky nature of this business, finding banks and payment processors to work with can be a challenge. Banks are hesitant to give you loans for financing your CBD business, and merchants are hesitant to transact with you.
You must understand that you have very few options when it comes to the financial aspects of your business. You might end up opting for a high-risk merchant account for such a business.
5. Consider the Marketing Needs
Before your business can get to your target customers, you’ll need to do some marketing. You’re going to invest time, money, and effort to learn how to sell CBD oil.
How are you going to get your customers to buy from you? What methods are you going to pitch your business to them? Where are you going to get them?
Whether you’re going to market online or offline, you need to package your marketing message in a way that your target customers won’t ignore it. If you’re targeting millennials who are mostly online shoppers, you’ll need to up your online campaigns.
6. Take Your Business Online
With the digital error, any business that is not online will not compete effectively. You must also take your CBD business online. Besides, you’re going to sell faster and make more profit if you sell online.
It’s easy to sell online these days thanks to the World Wide Web. You just need to have a high-quality website to attract your customers. The website should be appealing and easy to load on both PC and mobile.
Don’t forget to load your site with content that educates your customers and direct them to your store.
7. Advertise Your CBD Business
Now that your business is up and running and you already have a few customers, you still need to know how to sell CBD. Selling to one customer doesn’t mean you already have their loyalty. You must learn how to bond with your customers and create a long-lasting relationship.
Work with experts to help advertise your CBD products. Don’t forget to record the success rate of the avenue you’re using. If you choose to work with an advertising agency, make sure you find one that is familiar with everything regarding CBD.
8. Gain a Competitive Advantage
With the hype around CBD products, it’s natural that other business people are also venturing in. You’re not going to be alone in the market and competition is unavoidable. But you must differentiate yourself from the rest of the market.
You can decide to use third-party testing to prove that your products are of high quality. Also, consider getting certifications such as Good Manufacturing and FDA facility registrations. All these can help you gain the confidence of your customers.
9. Understand the Challenges Facing CBD Business
Like any other business, CBD also comes with its share of challenges that you must understand before you start a CBD business. Unlike other businesses, CBD comes with unique challenges. Some of them are concerning regulations.
You should be prepared to face all the challenges starting with banking, insurance, payment processing, and access to capital. You should be well-informed and adapt to all the changes in the industry.
Don’t Let the Lucrative CBD Business Pass You
The CBD business is one of the fastest-growing industries thanks to the health benefits and the good perception it’s continuing to command. Many people want a share of the profits and are learning how to start a CBD business. You don’t want to be left out, but you must carry out due diligence to survive.
Once your CBD business is up and running, don’t forget to come back to this site. We have more informative content about growing your business, improving your life, and leading a healthy life.