Over 4,000 years ago, the Chinese Emperor, Shen Nung, wrote that hemp has theoretical abilities to treat gout, absentmindedness, and other ailments. In the digital era, there is a variety of CBD businesses and products. You can purchase your favorite CBD products both online and in-person.
According to a survey by Consumer Review, over a quarter of people in the United States have used CBD at least once in the last two years. If you plan on getting into the CBD business in 2021, here are a few helpful tips:
1. Establish a Purpose
Every successful business needs a clear purpose. Establish your main purpose for creating a CBD business and work around it. Having a compelling ‘why’ will be a major motivation. It will help you make the right decisions. Here are a few important questions to ask:
- Are you trying to make it your full-time job?
- Is it a hobby?
- Are you looking to turn the business into a global brand or would you rather focus on local customers?
Each one of these scenarios is unique. They all require different strategies, resources, and effort. As stated by Napoleon Hill, desire is the starting point of all achievement. Starting your CBD business with no purpose is a recipe for failure.
2. Identify a Niche
A quick look at wellness stores will let you know that the variety of CBD products in the market is outstanding. There are accessories, ointments, creams, chewies, and much more. Pick a niche that is most relevant to your needs. High consumer interest will translate to high profits for you. Capitalize on the hype to benefit your business.
Think about what you want to sell. Do you want something modern or would you prefer to settle for classics? The most popular CBD niches include:
- CBD pet products
- CBD wellness products/supplements
- CBD-infused beverages/foods
Once you have a specific product in mind, zoom in on it. Most products differ based on the method of CBD consumption. They include:
- Sprays and drops that have CBD oil as their main ingredient. They may have flavoring agents and compounds as well making them better to ingest
- Cartridges and vapes that target recreational CBD users. They are meant for those who use CBD for recreational purposes
- Capsules and pills often combined with soft gel and gelatin to become more digestible
- CBD edibles may come in the form of honey sticks, candy, chocolate, or gummies
- CBD-based tinctures are combined with alcohol or other strong solvents. The tinctures may also have other herbs.
3. Get a Supplier
Finding a supplier will be one of the most important aspects of your operation. Whether you plan on selling CBD products online or in a physical store, it is important to have a reliable private label supplier, and if you will be delivering online, ensure that your CBD is from hemp plans rather than marijuana plants. Marijuana has a high THC dosage and may be illegal in some states.
Most reputable sellers will conduct a lab test on your behalf. They can give you certificates with the details of your product content. Stay away from wholesalers who may be unwilling to give you the details of their products. Other important things to consider from a provider include;
- Pesticide tests (you don’t want to sell ‘unclean’ products)
- Residual solvent testing (it tests for stray chemicals from the extraction process)
- Microbial testing (testing for the presence of mold and bacteria in a sample)
The quality of your product will determine customer satisfaction and the reputation of your brand. Therefore, you should never compromise on your supplier.
4. Research the Regulations In Your Area
Understanding the laws and regulations in your area is an essential step of starting your CBD business. According to the Farm Bill passed in 2018, it is now legal to produce hemp commercially in the United States. You can legally grow and sell its products all through the country. However, there are a few restrictions:
- CBD from marijuana is now legal for recreation in 15 states. It is legal for medical use in 36 states
- The hemp used to make CBD shouldn’t have more than 0.3 percent of THC. If any cannabis plant has a higher THC concentration, it is considered to be a marijuana plant
The matter of CBD regulation is complex and the specific laws depend on where you live. Currently, FDA has only approved one CBD-based prescription. It prohibits the addition of CBD into food.
5. Create a Business Plan
Do not get into the CBD business without a business plan. Attempting to start your business without a proper plan is like trying to drive with no rearview mirror. You may be unable to anticipate hurdles along the way. In the CBD niche, a proper business plan will serve as a compass. It will help you stay on top of changes in regulation, emerging opportunities, and market changes. Financiers and other stakeholders will want to see your business plan. Here are a few things that should go into your business plan;
- A market analysis to give you enough information on your customers, industry size, competitors, and other important variables. It will help you make informed decisions on product pricing and positioning
- Determine the amount of money you need to start your operations
- Choose a brand name and product range. Explain how your brand stands out from the competition
- ;Write a realistic and detailed marketing plan
Have Your Documents
If you plan on selling CBD online, you need two main licenses:
A Regular Business License
You can get this license after being incorporated and registering your business with the state. Once you have requested the license, you also need to request an EIN/TIN from the IRS.
If you will be getting your CBD from wholesalers, you need a Reseller’s license. The document makes it possible to get your products in wholesale without having to pay a sales tax. With the license, you may be able to collect sales tax from your customers later.
In conclusion, starting a CBD business may be difficult but it isn’t impossible. Unlike other highly hyped products, CBD is here to stay and trading in it can attract huge profits. Important things to do before starting your business include establishing your goals, getting a good supplier, identifying your niche, and creating a detailed business plan.
The post How to Start Your CBD Business in 2021: 6 Important Steps appeared first on InsightsSuccess.