How to Start a CBD Business
November 27, 2020 (Investorideas.com Newswire) Are you considering selling products like CBD oil? Countless entrepreneurs are eagerly getting involved in what is among the fastest-growing industries on the planet. It is already a multi-billion-dollar enterprise, and the market continues to swell.
One of the main issues with the industry at present is the lack of regulation. Almost any CBD business can begin without oversight. Companies can sell products with no lab reports or proof that they are free from pesticides and other harmful ingredients.
It is an extremely competitive industry as consumers begin to understand the need for transparency. This is why they trust organizations such as PureKana who provide third-party lab reports and have a long-standing reputation for excellence.
A few years ago, you may have got away with launching a CBD business with no attempt at proving the quality of your products. It was a fledgling industry, and consumers were not sure who to trust. There was also a lack of information regarding cannabidiol. These days, if you want to get started with a CBD business, you are up against stiff competition. Here are a few things to consider before you proceed.
1 - Learn the Legalities
Too many CBD businesses get started without knowing anything about the legal state of play. Things are a little more complicated than what many uninformed websites tell you. For example, some sites claim that CBD is legal in all 50 states.
In reality, the 2018 Farm Bill legalized industrial hemp with a maximum of 0.3% THC. It didn't make CBD or any other cannabinoid legal. At present, the FDA hasn't approved CBD. Only Epidiolex has received this seal of approval.
Also, there are a couple of states that make it tough to ship CBD products. It would help if you learned all of this, and more, before starting a CBD business.
2 - Know Your Audience
It seems as if people of all demographics are trying CBD for a variety of reasons. Trying to appeal to every group of people is an impossibility. Are you looking to sell CBD to help people manage symptoms of various conditions? Do you see CBD as a natural alternative to OTC and prescription medication?
Perhaps you see yourself as a trendy brand that caters to younger users. Whatever your goals are, you have no chance of achieving them unless you develop a niche.
3 - Marketing Matters
If you are a new brand, you are trying to muscle in on a saturated market. You are also up against firmly established brands with a legion of loyal customers. There is an immediate gap you have to close, and it is only possible with high-quality marketing. If you have the budget, it is worth hiring a professional marketing team.
Otherwise, you have to go it alone and write website and blog content yourself. Then you need to engage with customers on social media if you wish to establish your brand. It is essential that people are talking about your company.
4 - Creating Your Brand
What is your company name, and how are you going to ensure it appeals to your target market? This is also important because you need to find a domain name for your website. This is potentially a long and drawn-out process because you have to ensure you don't encounter legal issues. Ideally, it will have a .com extension and be easy to spell.
The process of creating your brand goes back to your target audience. You have to create a logo with colors that are likely to appeal to them. It is also imperative that your site is optimized for Google. Otherwise, few people will find it.
5 - Getting Your Suppliers
You must ensure you source your CBD from hemp plants grown by reputable farmers. You also have to invest in third-party lab reports, not to mention high-quality extraction equipment. How do you intend to package your products? What is your plan for distribution and storage?
Also, have you thought about the banking process? At present, CBD businesses are considered 'high risk,' which means few traditional banks will do business with you. As a result, you have to find a way to process payments, or else you must store a considerable amount of cash. Then you have to consider paying taxes etc.
Final Thoughts on Starting a CBD Business
Ultimately, the process of starting a CBD business is exceptionally complicated, with many moving parts. Challenges include:
- Establishing a brand in an already saturated market
- Banking and payment processing
- A complex legal maze
- Finding access to capital
- Getting the right insurance for your business
- Determining your target audience
It is a lot of hard work, which is why we should admire brands like PureKana. It goes about things the right way, and customers benefit from outstanding CBD products.
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