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With hundreds of CBD dispensaries and online stores popping up all over the nation, savvy entrepreneurs are considering the benefits and possibilities of starting their own CBD business. The supplement has taken the world by storm as misconceptions are laid to rest and the benefits of CBD are clearly laid out for all to see.
The Industry Expects Rapid Growth
Moreover, investors are jumping into this market quickly to judge by the numbers. In fact, Statista.com research suggests that CBD consumer sales will reach $1.8 billion by 2022 and $23 billion by 2025. Right now, consumer sales are around $813 million, so the growth rate is rapid and fruitful.
However, the CBD business does carry some restrictions. Many states do not allow local sale of CBD. This means you can’t open a local dispensary. However, any state that has legalized the use of marijuana allows the sale of CBD at brick-and-mortar locations.
If you’re still skeptical about selling CBD oil based on legal apprehensions or misconceptions, don’t be. For years, people thought CBD and marijuana were the same, but the truth has come to light. CBD has no psychoactive properties, meaning you won’t get high from using it. Instead, you can just enjoy its life-altering benefits. Most people use it for treating pain, anxiety, sleeplessness, epilepsy, and even heart disease.
The list of benefits of using CBD could go on and on, as do the benefits of running a successful CBD business. Here are a few tips for getting started and raking in the dough.
1. Begin Online
Online is the safest route for CBD retailers. This is because you won’t risk legal prosecution for selling CBD in a state where it’s illegal. Penguin CBD, for example, has a thriving platform online because it can sell the products virtually anywhere. In fact, they ship their organic Penguin CBD oil all over the nation.
To get your business started, design a useful and attractive website. You’ll want an attractive logo that will catch the eye and stand out from the other startups in your industry. Then, create simple and functional product pages that make checking out and shipping a breeze for your customers.
2. Market the Health Aspect
Marketing a successful CBD business is one of the greatest challenges of the industry. Most thriving CBD businesses have gotten around the struggles by targeting the health market rather than the hemp market.
For starters, focusing on health can help when choosing a name for your business. Also, you might have a difficult time getting funding for your business if you use CBD in the name. You might also struggle to rank on Google, since the search engine giant won’t advertise CBD products.
So choose something simple that’s focused on health. You could also set it up so that you can expand the name to include CBD in the future without rebranding. For example, Organic Remedies is simple, speaks to the integrity of the product, and can easily be adapted to the changing landscape of CBD.
When marketing your business online, it’s also vital that you stick with the health angle. Social media giants like Facebook don’t allow the blatant marketing of CBD products on their page. However, you can talk about health and the supplements you use to achieve it. You might not be able to use paid advertising, but you can still get the message across.
3. Get Creative with Funding for Your CBD Business
Herein lies one of the biggest obstacles for starting a successful CBD business. Many traditional lenders will not back a CBD business due to the complex regulations that surround the use and sale of CBD. Additionally, sometimes a bank will back a CBD venture only to pull out later.
What’s more, many business insurance and payment processing firms such as Visa won’t do business with CBD business owners. When you find an insurance company (usually a smaller online firm) that will cover you, the prices are steep because of the high potential of legal trouble.
In some situations, this leaves you no choice but to get somewhat creative with your funding. You might try crowdsourcing or seeking out a partner investor. Otherwise, you’ll have to back the entire venture yourself.
Thankfully, many banks are overcoming their fear of the CBD world and accepting that it’s a burgeoning part of the business landscape. Just keep trying with your loan applications and you’ll likely come across a willing lender eventually.
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4. Source Products for Your CBD Business from a Reputable Vendor
When selling CBD online, it’s only legal to do so if the THC content is below 0.03 percent. THC is the component responsible for making people feel high when they use marijuana. If you’re caught selling CBD online with an illegal THC content, you could not only lose your business but also face criminal prosecution.
Therefore, it’s vital that you choose a reputable vendor for all of your products. Choose someone with a clear trail of legal transactions and good quality customer service. If other CBD business owners are satisfied with the quality of the products, you likely will be too.
If you’re struggling to find products you like, you might consider going into the processing industry as well. You could hire your own chemists and attorneys to make sure you’re only selling the best products possible.
5. Start with a Small Inventory and Grow
Don’t start too big and then get in over your head. You don’t want to invest thousands on a huge inventory, only to gain maximum sales or even get shut down when you make a mistake. Additionally, a large inventory is difficult to handle as a small business, and you’ll likely find yourself overwhelmed with your orders.
The most successful CBD business owners started with just a few products. The most popular products are typically organic tinctures, soft gels, and gummies. Using these common products, you can easily establish yourself as an industry favorite and expand your inventory in no time at all.