CBD is one of more than 100 cannabinoids, which are compounds found in both cannabis and hemp plants. Famous among them is tetrahydrocannabinol (THC) which causes intoxication. CBD, however, does not produce this intoxicating effect. In fact, it is popularly attributed to offering therapeutic and health benefits. The verdict is still out since the research into its potential medical applications is still ongoing.
CBD can be found in both cannabis and hemp plants. CBD oil can be extracted from either plant to produce CBD oil products. It is important to know the key difference between hemp CBD oil and CBD products derived from cannabis…THC.
Industrial hemp contains less than 0.3% THC, making it legal under federal law to cultivate, harvest, and process into finished products. On the contrary, cannabis contains more than 0.3% THC, making it federally illegal.
The potential for growth in the hemp CBD market is unprecedented. According to the Brightfield Group, it is projected that by 2022, the CBD market will be valued at as much as $22 billion. This is provided that CBD will become a more accepted drug due to its health benefits as well as states making it legal to sell over the counter or by prescription.
If you are an entrepreneur who wants to cash in on the CBD market’s exponential growth, you must be aware of the challenges and go in with a well-thought-out plan.
Here are some valuable steps you can take to ensure that your venture into the CBD market is a successful and legal one.
- Lay out your business plan: Having investors back you up in this “Next Gold Rush” can only mean an explosive profit potential for all parties involved. However, you must be well-informed to demonstrate your knowledge and goals. Your business plan must include financing methods, products, a marketing plan, strategy, and sales forecasts, just to name a few.
- Choose your suppliers carefully: It’s absolutely crucial to get your products from a trustworthy source. Unfortunately, there are CBD suppliers that list their THC levels lower than they actually are. This can spell trouble for your business as these products can be dangerous for your customers. Always seek a supplier with a legitimate certificate of analysis (COA) to guarantee you are getting the appropriate amount of THC.
- Seek payment processors: It is understandable that many payment processors refuse to work with CBD businesses due to regulations and other shady CBD businesses who cut corners and are operating illegally. Find high-risk merchant account providers that specialize in the CBD industry to do things legally.
- Write out your legal policies: Hire an attorney to help you draft legal policies that will protect you and your business from any violations. This will, in turn, build trust with your customers, knowing that they are purchasing within the legal parameters.
- Market your products: Your marketing and your branding will push your business forward. Develop a plan that focuses your efforts on customer service and education. Many are still in the dark about what CBD actually is and associate it with the abuse of marijuana. Advertise the benefits and dispel the misinformation. Use social media to educate and engage.
Despite the legal risks and other challenges associated with starting a CBD business, it is clear that, with a little forethought, planning, and execution, you can join this thriving industry and reap the tremendous financial benefits for many years to come.