The words ‘cannabis’ and ‘marijuana’ are most heavily associated with the psychoactive ‘high’ which is caused by one of the chemicals in the plant, THC. The truth, however, is that the subject is much more complex. There are many types of cannabis plant and over a hundred different chemicals which can be extracted, many of which do not have any psychoactive effects. CBD (cannabidiol), for example, not only has no psychoactive traits, but is increasingly being extracted and used for its benefits in beauty and health products. While marijuana is federally illegal and not legalized in many states, the growing of hemp (which has very little THC) has been legal since the 2018 Farm Bill.
The legal and regulated hemp market in America is projected to grow to $1.8 billion by 2020 as CBD products derived from hemp are becoming more popular. If you’d like to carve yourself a piece of that market, here’s what you need to know about starting your own CBD company.
Make Sure You Understand and Comply with the Law
When you start any business you need to ensure you have the correct licenses, obtain incorporation and are registered for tax, but you also need to understand both the federal law and the laws in your state regarding hemp and CBD.
The most important aspect is that CBD products produced from hemp cannot contain more than 0.3% THC. It’s also essential to understand that only one CBD product has been approved by the Food and Drug Administration (FDA) which is Epidiolex for epilepsy. Unless you manage to get your products approved by the FDA which involves passing a substantial amount of testing and research, you cannot claim that a CBD product can treat, prevent, cure or diagnose a disease. This means you need to be very careful about how you market the benefits of your products and need to make sure you are not making false claims. Consult a lawyer who is familiar with the industry to ensure you aren’t breaking any laws and make sure you have clear policies and dosing instructions.
Write a Business Plan
A comprehensive business plan is essential to give your business the best chances of success. You will need to outline your goals, strategies, funding and more to any investors you have and should also have a clear strategy in place for growth. The plan should cover the products and services you will offer, which market you are targeting (health, beauty, etc.), who is your target customer, how you will fund the business, how you will market the business to drive sales and how much money you expect to make in the first few years. Here are some examples of hemp CBD business plans.
Find High-quality Suppliers
Before you commit to buying either another CBD manufacturer’s products for distribution or CBD hemp seeds in order to create your own, you need to research everything you can about hemp, CBD and marijuana, including the laws in your state. In states where marijuana is not legalized, CBD products have to be derived from hemp. A high-quality manufacturer should be able to provide evidence of Current Good Manufacturing Practice (cGMP) and a Certificate of Analysis (COA) which confirms the plant species and levels of CBD and THC as well as the purity.
Start Marketing Your Brand
Most modern businesses must have a presence in the online world and this means that you need an easy-to-use and professional website through which you can advertise and sell your products. There are lots of website building platforms and services which can help you to create an attractive and functional website, but you also need to implement a strong SEO (Search Engine Optimization) strategy. This can be a complex topic which you can learn more about here, but in general your website should include useful, unique and publish informative content (articles or blog posts) in addition to the ecommerce function.
When your website is up and running you can start sharing your products with the world. While you cannot make false claims, you can use customer reviews and testimonials to promote the benefits of your product so consider giving customers free trials to source some anecdotal material.