Going into the CBD business is one of the smartest moves you can make in 2022.
It’s becoming widely popular and is projected to have sales reach $1.8 billion by the end of 2022. Because it’s a growing industry, it’s a great time to get on board as a consumer, but especially as a seller.
The first step is learning how to start a CBD business so that you can become a part of this successful industry. Keep reading to learn how.
Learn About CBD Laws and Regulations
The first thing you should do is learn everything you can about the legality of CBD, both federally and in your state.
In 2018, the Farm Bill was passed, which legalized growing and selling industrial hemp and products that contain hemp-derived CBD.
So, hemp is now federally legal, whereas marijuana is still not. It is considered hemp if it contains less than 0.3% THC, anything over that is considered marijuana, and more regulations and laws are applied.
However, your state may have legalized CBD products that were derived from marijuana. It may seem complicated, but before moving forward with your CBD business, you need to become extremely familiar with all of your federal, state, and local laws.
Decide on Your Niche and Products
Once you’re done researching laws, you can begin deciding what kind of CBD products you want to sell. If you look around at other CBD shops, you’ll see that the limits to CBD products are endless.
Do you want to focus on CBD pet products? Perhaps you only want to sell CBD-infused drinks, or maybe you want to sell CBD flower.
Decide between these common specialties:
- CBD edibles
- CBD supplements or wellness products
- CBD cosmetics
- CBD smokeable products
- CBD pet products
Once you’ve decided on your specialty, you can determine the type of products you want to stock.
There are pills and capsules, which many people prefer to take because they know they are taking their accurate dosage and are using it as an alternative to over-the-counter medication.
If you want to sell products that consumers can smoke, you would stock vapes, flower, and concentrates.
Smoking CBD is one of the most effective ways to use it because it goes directly into your bloodstream, meaning you feel the effects faster. Because of this, smoking is a preferred method for many CBD users that use it for pain relief.
Tinctures are a common CBD product because they are versatile. Consumers can use them sublingually or as topicals, which allows them to target the areas they need relief from more efficiently.
You’ll find topicals, ranging from balms to lotions to cosmetics and much more. CBD makeup is becoming more popular, as are CBD bath bombs.
Lastly, you have a range of CBD edibles to choose from, such as hot chocolate, candy, iced tea, and pumpkin pies. Choosing your specialty first will help you decide what kind of CBD edibles you may want to sell.
Create Your CBD Business Plan
Now that you have a pretty good idea of what you can sell and what you want to sell, you can create your CBD business plan. This is one of the most important parts of starting a CBD business, as it will be your navigator and show you your pathway to success.
First, you want to analyze the CBD market, so you can discover the size of the industry, look at your competitors, and find your target audience.
Clearly state the specialty you’ve decided to focus on and list the products you want to sell. Create your budget and determine your financing, creating a timeline for growth and planning out how much you’ll need to sell to break even each month.
Lastly, use what you learned of the CBD market to establish a marketing strategy. Decide how you will advertise your new business in the beginning, and make sure to include that in your overall budget.
Gather Your Documents
To start selling CBD, you first need to get your documents in order and become an official business.
First, you need to get your regular business license with your state. You also need to request an EIN/TIN from the IRS for your new company.
If you plan to buy from wholesale companies, you may also need to get a reseller license, which allows you to purchase wholesale without paying taxes. This will save you tons of money, so it’s worth it to register with your state.
Find a CBD Supplier
Now you can do the fun part and start buying your CBD products. As stated before, purchasing wholesale CBD is the wise way to go, as you will get the best deals and not have to pay sales tax.
Research different companies, read reviews, and look at their product selection. You want to work with a company that offers high-quality products and has everything you’re looking for.
For example, if you were looking to sell Biomass CBG, you want to make sure your supplier frequently has it in stock. Otherwise, you’ll run into problems in the future.
Create an Online Presence
Now it’s time to market your business online so you can start receiving customers. Create your website, making sure that it is user-friendly and shoppable.
Start your Instagram, Twitter, and Facebook pages, updating them frequently. The more you use your social media, the more the algorithm will allow you to show up, so stay consistent and watch the customers flow in.
How to Start a CBD Business: The Basics Explained
Learning how to start a CBD business is an exciting process. While it will take a good amount of hard work, in just a short period of time, you could be the owner of your very own CBD business.
With the industry only projected to grow, it’s the perfect time to do so.
If you would like more business advice like this, browse through another of our blogs today!