CBD is one of the most trending names in the wellness market now. The industry is growing bigger every day; its therapeutic benefits have mesmerized millions of people around the globe. We can expect that it will be a common household name soon. According to statistical data, it will hit the 20 billion dollar mark within two or three years. So, if you are looking to join in a new venture, CBD has the potential. But before diving into the business, we need to gather as much knowledge as possible on the drug. What is CBD? What should you know before diving into the venture? What are the legal obligations you have to maintain? We will talk about all of these issues here in the article.
What is CBD?
CBD is a chemical generally derived from cannabis plants. The drug is well-known for having physical and mental health benefits. It has become so popular that famous skincare, cosmetics brands, and even pet care have welcomed it as an ingredient. THC (the psychoactive cannabinoid in marijuana) and CBD share similar molecular components but different structures. The drug has no mind-altering effects. It is a safer and more effective way to enjoy the goodness of cannabis. This therapeutic drug influences our body to release endocannabinoids and activate our endocannabinoid system. ECS regulates many crucial bodily functions like sleep, pain, memory, mood, appetite, etc.
What are the legalities about CBD you should know?
You might know that the legalities around this recreational drug are not crystal clear. According to the Farm Bill 2018, hemp-derived CBD is federally legal in the United States. But the states also have a say in this matter. Some states have restrictions around its use, and some do not allow the drug in the territory. So, first, you have to check your state law as it is constantly changing. Hemp is not a different plant species; it is marijuana that contains less than 0.3% THC. So, it is not psychoactive. After that, try to collect data on the permits and licenses you need to start the business.
What are things you should know before starting a new venture in the CBD?
- Learn about the products:
We understand you are not going to run the manufacturing operation yourself. But it is always better to gather enough knowledge to understand the products. So, whether you manufacture the products or buy them wholesale, try to know about their ingredients, manufacturing process, and lab testing process in detail. The first step is to cultivate the plants under proper regulations. Then the manufacturers use an extraction process to extract the CBD from the plants.
The most effective extraction method is the CO2 extraction process, as it provides a premium quality product and longer shelf life. After that, they use the extracted oil to produce different products like capsules, gummies, oils, tinctures, pills, creams, lotions, balms, vapes, etc. Steam extraction, solvent extraction, and ethanol extraction are also popular methods. So, before you jump into the venture, try to learn about these methods as much as possible.
- Build a strong marketing strategy:
Marketing is a part of the business you cannot take lightly. Your products can be the best in the market, but you have to let people know that they exist. So, you have to do your best to try and reach potential customers. The market is getting more competitive each day. New brands are launching their CBD products every day, but not all of them are successful enough to stay in business for the long run. So, you have to plan and build a powerful marketing strategy to stay in the run. Try conventional methods, use the digital platforms, use SEO strategy and a website to attract more traffic. Try to think outside the box and build a closer and stronger relationship with your customers. Nurture and appreciate customer relations from time to time; make them feel special.
- Prepare to face the challenges:
Every venture has its challenges, but you cannot back out because of them. You have to prepare and learn to overcome these issues. We cannot deny that the CBD industry has more complications than the others. Legal reasons, FDA regulations, and government rules are ever-changing. So, the serious issues you are going to face are,
Finding a top-rated payment processor is crucial to starting your CBD business. Most major payment processors do not take CBD businesses under because they are high-risk businesses. Many top-rated high-risk payment processors in the market take up ventures like these.
As CBD is a high-risk business, most banks also try to steer clear of them. But you need a merchant account to start a new business. Try getting a payment processor first. They will help and tie you up with a trusted bank for your business endeavors.
The price of industrial hemp is going up every day, and getting insurance for these businesses is not an easy task.
It is hard to invest all your savings in a business. Even if you do most of the time, it is not enough to run it properly. Banks are still indifferent about investing in CBD businesses. Outside lenders and investors are the only options to find the capital for your business now.
- Try to gain competitive advantages:
Excellent customer service is a key to customer satisfaction. Your business has to have a unique selling point or USP to be appalling to the customers. Know how your product can help people achieve better health. Make sure you stay honest and transparent with your customers. Show them third-party lab test results and offer a satisfaction guarantee to ensure that they are in safe hands. Listen to your customer’s issues and try to provide a possible solution.
The CBD business can be challenging but immensely rewarding and satisfying at the same point. Now you have a preliminary idea about what to do to start the venture. The most crucial step to enter the CBD industry is to outset the business. Yeah, it may sound overwhelming. But until you are walking through the fire yourself, you are not learning it. So, be brave and start the venture. Cannabidiol top stories show promise and opportunity for the future. And we can hope that these legal obligations will be neutralized soon enough.