Intro
If you’ve decided to establish your own online CBD business, you’re probably wondering how to get started and what the process is like. Rather than starting from scratch, you can follow this guide to get an idea of what steps are needed.
In this guide, we have gathered all the information you need to start your own CBD brand. You’ll find out what kind of licenses and certifications are required, where to get your own CBD products, how to market your business effectively, etc.
With the right information and preparation, you’ll be well on your way to starting your CBD business.
CBD: The basics
Before diving into the topic of CBD businesses, let’s talk about what CBD actually is and what it does.
What is CBD?
Cannabidiol (CBD) is a non-psychoactive cannabinoid found in high concentrations in hemp plants. CBD may be extracted from either industrial hemp or cannabis, which are both variants of Cannabis Sativa L. CBD has seen a surge in popularity lately due to its many benefits.
Scientific studies have shown that CBD has several potential benefits, including reducing pain and inflammation, decreasing anxiety, helping to reduce epileptic seizures, improving skin health, among others.
In addition to this list of potential benefits is important to know that CBD does not cause addiction, does not produce side effects, is legal in all 50 states, and can be shipped anywhere.
What is the difference between Hemp and Cannabis?
Hemp and cannabis are the same plant species. The only difference between them is that hemp has less than 0.3% THC (tetrahydrocannabinol), the chemical compound of cannabis that causes psychoactive effects.
CBD is found in both plants, but it is more abundant in hemp than cannabis.
CBD can be cultivated by both of the plants; however, hemp-derived CBD contains less THC and thus has little to no psychoactive effect. The end result is that people who purchase CBD oil made from hemp report feeling relaxed without experiencing any marijuana’s psychoactive effects.
Hemp drived CBD vs Marijuana-derived CBD
Hemp-derived products come from extract biomass (flowers, leaves, and seeds) of industrial hemp plants with low THC concentrations (less than 0.03% THC)
Marijuana-derived CBD is extracted from the Cannabis plant, which contains more THC than hemp plants.
There are also certain sales limits. Cannabis-derived CBD is only accessible through licensed dispensaries in states that have legalized medical or recreational marijuana, while Hemp-rich cannabinoids products can be sold anywhere since hemp has less than 0.03% THC concentration levels.
The Hemp CBD Market
Since the 2018 Farm Bill legalized industrial hemp for research purposes, the industry has been expanding. This legislation also authorized states to create their own Industrial Hemp laws and regulations. And today, there are over 20 states with laws permitting the cultivation of Industrial Hemp.
Hemp-derived cannabinoids, particularly cannabidiol (CBD) items, are an important channel in the hemp industry.
According to Brightfield Group, the CBD industry is expected to hit $ 16 billion in 2025, with a value of around $ 4.1 billion in 2020.
according to market research, approximately 40 percent of Americans are interested in trying CBD products. hemp-derived CBD items can now be found at well-known retailers such as Whole Foods Market, Costco, and CVS Pharmacy.
There is a large demand for CBD oil and related items, which means there’s definitely room for new CBD businesses to make their mark on the industry!
Does CBD get you high?
CBD will not make you high. Unlike its cannabinoid cousin, tetrahydrocannabinol (THC), CBD is non-psychoactive. This means that it does not produce the famous “high” effect.
Due to this, CBD has gained popularity as a dietary supplement and is currently available in many different forms (e.g., oils, tinctures).
is CBD legal?
CBD is legal in all 50 states of the United States. CBD can legally be shipped to anywhere within the country since it’s not psychoactive and contains less than 0.3% THC concentration levels, which legally makes it an industrial hemp product (not a drug).
Is it legal to sell CBD?
Yes, CBD can legally be sold in 50 states of the United States. All you need to do is ensure that your products are made out of industrial hemp and contain less than 0.3% THC concentration levels. To comply with these laws, it’s wise to seek legal advice about how best to present the information on your website or at your CBD store.
Is selling CBD profitable?
Starting a CBD company can be very profitable. The CBD market has grown massively in recent years, it offers excellent opportunities to start your own business or expand an existing one.
It is possible to make a very good income by sell CBD products. But as with any business, it will require an investment of time and money to be successful.
There is no specific way to determine the profitability of a CBD business. Each company will have its own margin for profit, based on the scope and quality of the product. But in general, the higher the quality and demand for CBD in your region or target demographic (eg: elderly, athletes), the more profitable your business will be.
How to Get Your CBD Business Started?
Now let’s get down to business and talk about how you can start your own CBD brand.
Do Your Market Research
Before starting your own CBD company, you need to do some research. This includes learning about the market and knowing exactly what you want your brand to be like.
In addition to CBD, you should also research other hemp-derived cannabinoids that might be of interest. There are many different types of cannabinoid compounds found in the cannabis plant and each one provides a unique set of benefits for customers.
We recommend reading articles about CBD online or watching hours of YouTube videos for your market research. It’s critical to understand everything there is to know about the CBD industry if you want to start a successful CBD business. There are several resources on the internet that can help you with this; just make sure it’s from people who know what they’re talking about.
Create Your Brand Identity
What makes successful brands? It’s all in their branding. The first thing people see when they visit your website is your logo, so you want it to be perfect.
A good CBD company has a sophisticated look and feel that matches the quality of its products. Your brand identity should reflect this element in order to attract customers who are looking for high-quality CBD goods.
your brand identity plans should include:
- Brand Name
- Company Logo
- Color Scheme (what colors do you want to use?)
- Font Choices (which fonts will be used in your logo?)
- Tagline (what do you want to say about yourself?)
- Business cards and letterheads
Create a Business Plan
Once you’ve done your create your brand identity, it’s time to make a business plan. A well-made CBD Business Plan will guide you through the whole process of starting up your own company and help keep it on track.
Your business plan should include:
- Mission Statement
- Company Overview (who are we?)
- Target Audience (for whom are we creating our products and services?)
- Market Analysis (what is the market like?)
- Company Goals (where do we want to go in five years’ time?).
- SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats)
- Financing plan (Planning and execution, Sales forecasting )
- Marketing Plan (how will we market our products and services?)
- Sales Strategy (what techniques do we plan to use?)
- Competition Analysis (What are our competitors doing? How can we beat them?)
Form a legal entity
Now that you have your brand identity and business plan, it’s time to form a legal entity for your CBD business.
You can do this by creating an LLC or S-Corp depending on your location and the amount of money you’re investing in your company.
With the help of an attorney who is experienced in this area, they will be able to set up a company in your state according to local laws.
You can also form your company online, which is what many small businesses do. This is a fast and inexpensive option.
Fill out the necessary tax paperwork
Before you can legally open for business, you should register your CBD company with the IRS. You will need to apply for an EIN (Employer Identification Number).
This is a free service offered by the federal government that allows businesses and their employees to report wages accurately.
Registering your business may take some time; it’s best to get this done as soon as possible so that you can start selling your products and making revenue.
Once you receive an EIN, all the necessary tax forms will be sent directly to the business address on file with the IRS.
Obtain Required Licenses and Certifications
Before you begin distributing CBD, you’ll need to obtain the necessary licenses and certifications. Local laws may require you to have a certain number of permits in order for your CBD business to be considered legal.
If you’re not sure what sort of permissions are necessary for your company, speak with a lawyer or someone else who is experienced in the field. Check with your city or state’s regulations on CBD enterprises.
Find a merchant processor and bank
Despite the fact that CBD oil sales are legal in all 50 states, banks and payment processors see CBD businesses as high-risk, which means gaining an account would be difficult. We expect this problem to last until the banking and money industries can adapt and catch up with the new regulations. Square is one example of payment processors that are trying to get ahead of the game.
Don’t give up on finding an account, though – it may take some time and effort, there are options available for CBD companies who want to accept credit cards.
Choose a CBD Supply Partner
Your supply partner should be able to provide you with high-quality CBD products that match your company’s standards. This will ensure that customers have a good experience with your CBD products and keep coming back for more.
To make sure your supplier meets strict criteria, we recommend verifying the following points:
- Source: The sourcing of CBD oil may reveal a lot about its quality. Many reputable wholesalers obtain their CBD oil from the United States or Europe, where hemp farmers have decades of expertise producing it. If a wholesaler grows their own hemp, be sure to examine their farming methods to ensure they are following acceptable standards.
Organically grown hemp is the best choice, and you can check for this label when sourcing your supplier.
- Certificate of Analysis (COA): A Certificate of Analysis (COA) is a document that an independent testing laboratory provides to confirm the quality and purity of CBD oil. Test results for cannabinoids, organisms, pesticides, and heavy metals are all included in the COA.
Look for a CBD supplier that provides regular COA’s and offers third-party testing if possible.
- Price: If a CBD supplier sells high-quality, low-cost goods, they’re most likely taking shortcuts. Quality ingredients cost more, so if you find a supplier selling CBD oil at rock-bottom prices, be suspicious.
Choosing the right suppliers can make or break your business, so do your research before committing to anything. It’s also wise to seek out multiple suppliers rather than placing all of your eggs in one basket; this will allow you to compare different products and choose the best one for your company.
- Services provide: Make sure that the supplier you choose offers a full range of services, such as drop shipping and packaging. Some CBD suppliers sell only raw ingredients while others provide full-scale manufacturing and distribution services.
Whatever the case, make sure that you select a supplier with all of your company’s needs covered so they can provide a wide service as your company grows.
Product development/formulation
As your business gets off the ground, you’ll face many challenges and tough decisions. It might be tough to pick which CBD product to sell for example.
White-label, custom formulations or sell CBD wholesale products are your main options.
The first step to finding the right CBD products for your business is figuring out what’s most essential for your business.
Do you want to make your own custom formulations? Or are you looking for a CBD product that has already been formulated and tested by an expert source?
Last but not least, you must consider how your CBD product will improve the lives of your customers.
When you have a better idea of what your business needs are, it will be easier to decide on the CBD product line that’s right for you.
Here are some of the most common hemp-derived CBD products that you can sell:
- White label: Many CBD suppliers offer white labeling services. White label products are unique to your company and leave room for customization, such as custom branding or adding specific product information.
- Custom formulations / Private label: If you have the resources to develop your own product formulations, this is an excellent alternative. Your company will be able to create its own formulas and branding that are distinct from others. Many CBD producers provide unique formulations and private label services so you can have complete control over the look of your brand while still maintaining high standards of quality.
- CBD Wholesale Products: Wholesale CBD products are also a popular and effective choice. Many suppliers offer wholesale pricing that allows you to purchase CBD oil and other CBD items at a significantly lower cost than retail. Wholesale CBD products are available in two forms: raw materials (CBD isolates) and finished goods (CBD oils). Raw materials can be added to your own formulations or used to make your company’s private label items.If you want to sell CBD wholesale finished proudcts, you must be aware of the costs involved in production and distribution. Wholesale prices are essential for all types of CBD tinctures, CBD patches, CBD edibles and etc. As a result, you may offer lower prices to your clients while also attracting new consumers.
Boulder Israel provides Hemp CBD-related business solutions that help you start your own CBD Business.
Our experts have helped many businesses establish their brands and grow successfully, so let us know how we can help you.
How to start selling CBD?
E-commerce is still the most common way to sell CBD today. According to some industry experts, e-commerce accounts for as much as 80% of all CBD sales each year. Online shops also have a lower overhead expenditure, allowing you to offer competitive rates while still generating a profit margin.
But it’s not the only option. Many CBD brands sell their products at local fairs, festivals, and events as well as through other offline channels like dedicated CBD stores.
How to start selling CBD online?
Today, there are more opportunities than ever to sell CBD online. In fact, you can sell CBD through multiple channels like e-commerce platforms, CBD Marketplace, and dedicated websites.
First, you should start selling CBD products through your own website. This allows you to gain more control over the entire selling process and helps build brand recognition for your business.
This guide will focus on selling CBD online through e-commerce platforms. E-commerce sales are currently the most common method to sell CBD online because they allow you to reach a large audience, generate income, and promote your brand.
Create a website for your CBD business
Select the eCommerce platform that’s right for you. Like most e-commerce companies, you can use Shopify or WordPress to launch your own CBD online store.
Shopify can help you get started immediately since it provides a simple platform to create your website. Once the site is up and running, however, Shopify might not offer much in terms of customization or branding – if that’s what you’re looking for.
With WordPress, on the other hand, you have more freedom with design and layout, but it takes more time and effort to set up.
Both options are good for CBD eCommerce websites – Shopify is best if you’re just starting out or have little experience with website design, while WordPress allows you to create a unique brand that matches your company’s ideals.
Focus on SEO-friendly CBD content
At the moment, Google and Facebook do not allow paid advertising for CBD products. This means that you have to rely on organic search engine traffic. To ensure that your website is SEO-friendly, it’s important to include the following on each page:
- Keywords – make sure you have relevant keywords on each page of your website.
- Content – make sure that you include high-quality, unique content on every page (and avoid duplicating words from your title tag).
- Links – other websites linking back to pages on your website will help improve SEO ranking. Make sure you have links from relevant, high-quality sites.
Create educational CBD content
Educational material may be one of the most effective ways to get targeted visitors to your website.
People seeking CBD products will often conduct internet searches and read CBD-related blogs and articles, so you’ll want to make sure your website has relevant and appealing pages for them to see.
Educate your target audience – develop content that is both instructional and beneficial to consumers. This might be anything from written instructions to infographics to video lessons. Create content that your clients want to talk about.
Engaging, informative content on CBD usage will help improve SEO rankings, drive traffic to your site, and boost sales. Give important information on new trends or products related to CBD so that you may build your brand’s reputation as a leader in the sector.
Also, remember that establishing a trusted presence in the CBD industry will help you gain more online visibility and earn high-quality links.
Claims under FDA laws.
The FDA regulations for making any claims should be taken into account when creating new content or labeling items. CBD businesses are not permitted to promote goods as treatments for diseases unless they have conducted clinical trials to back up their claim under the Federal Food Drug & Cosmetic Act (FD&C).
CBD sellers must also be very careful about CBD marketing on social media and on their websites, which is why many CBD companies use influencers or affiliates instead of promoting products themselves. You may want to consider this option if you want to grow your CBD firm.
If you’re selling CBD oil as a dietary supplement, it’ll be covered under sections of the FD&C Act that govern supplements – particularly CBD oil. While CBD oils are not allowed to make any health claims, CBD oil supplements are allowed to claim general well-being.
Don’t make any medical claims or label your products as medicine, but you are allowed to make non-medical claims – i.e., “relaxing” or “uplifting.”
Only make claims that are allowed under FDA laws – do not label your products as medicine!
How to market your online CBD business?
Once you’ve completed your website, you’ll need to attract visitors.
Use your company’s branding and the buyer persona profile you prepared to try to reach the appropriate people.
There are many different ways to get your stories heard. Here’s a list of channels and tools you might consider using:
Social media
Once you have your website set up, it’s time to focus on social media.
Make sure that each of your posts is informative and helpful for CBD users.
When sharing posts on social media, make sure to use hashtags relevant to CBD.
Email marketing
After building a list of customers, you can continue to send them helpful content via email. Make sure that your emails are informative and are not just promotional material.
You can also use email marketing to inform customers of sales or coupons that are only available through your website.
Hemp CBD marketplace
There are several hemp CBD marketplaces that you can use to sell your CBD oils and other products.
Make sure you use the finest one for your company so that you may appeal to a broad range of consumers and boost revenue! Before joining, double-check each marketplace’s criteria and rates to ensure they are suitable for your business.
Affiliate marketing
Affiliates are people who sell your product for a commission on their website or social media page. They will promote your product in exchange for getting paid when they refer customers to your site that make a purchase.
Affiliate marketing is a great way to expand your business without needing much extra overhead or employees, but it can be challenging in that you’ll need to find affiliates willing to work with you and manage the process of getting paid for sales they make on your behalf.
Google AdWords
Google Adwords is a method for getting your website in front of visitors online if you have a budget to spend. The majority of distributors have learned that Google does not want CBD firms to advertise their items, so use this approach with caution.
Influencer marketing
Influencer marketing is an excellent strategy for building brand awareness, increasing traffic and driving conversions on your site, especially if the CBD influencers are well-known or have a large following on social media.
Also, consider CBD-related influencers who are not necessarily CBD experts but have a high following in your target audience.
Community marketing
It’s also beneficial to reach out and connect with other retailers, bloggers, or companies in the CBD industry on social media or through email marketing.
After you’ve made a name for yourself in the industry, it may be beneficial to join forums and other online communities related to CBD.
Customer Services
Customer service is a key part of any business.
Make sure to provide great customer service by replying promptly and providing useful assistance. Customer feedback is crucial, so make every effort to remain professional and polite.
Trade shows
Trade shows are an effective way to get in touch with potential customers. You can also use trade shows to network with other CBD sellers and professionals.
Make sure to sign up for the CBD industry’s biggest trade shows( for ex. NoCo Hemp Expo) and make contacts for future business opportunities.
Word of Mouth Marketing
Finally, word-of-mouth marketing can help you get the word out about your business and increase sales.
Make sure that your customers are happy with their purchases, and they’ll be more likely to spread the word about your business. You can also encourage your customers to leave reviews on Google, Yelp!, or other review websites.
Conclusion
The hemp CBD industry is competitive, so it’s important to have a good planning and marketing strategy.
Make sure to develop helpful, engaging, and informative content for CBD users that you can share on social media. After you’ve established a reputation in the field, become active on forums and other internet communities dedicated to CBD – this will aid your word-of-mouth marketing efforts.
Make sure that your branding is consistent across all of your products, website, and social media channels for the best results.
Thanks for reading our guide, we hope that this has helped with how to start your online CBD brand.
Boulder Israel CBD provides a variety of hemp-derived cannabinoids products and services, including white labeling, custom formulations, and wholesale raw ingredients.
Our branding experts can help you get started with your brand and grow it into a successful CBD business.
If you have any questions, please contact us at your earliest convenience for more information or assistance.