The market for cannabidiol (CBD) products is constantly growing as the movement to legalize medical cannabis continues to pick up steam. The CBD market is expected to be worth a total of $13.4 billion by 2028. The reason for this is the rising demand for CBD oil, which is often marketed for its health and wellness benefits.
If you are living in an area that has legalized the sale and consumption of CBD, it may be a lucrative idea to start your own CBD business. However, like with any other business, selling CBD products is something you wouldn’t want to dive into head-on.
There are opportunities and there are risks as well. Here’s a guide to help you build a legal and successful CBD business:
Table of Contents
1. Check local regulations on CBD
It’s best to review your area’s CBD regulations before you start building a business model. Although some states allow both the recreational and medicinal use of cannabis products, there are others that have stringent policies that cover CBD sales.
To be certain, pay attention to the amount of THC you are allowed to process or sell. If you are selling CBD products outside your state, you are only allowed to ship products with THC content below 0.3%. Taking the time to review these policies will help you avoid legal trouble as your business grows.
2. Define your niche market
What type of CBD market will you focus on? Will you be selling CBD tincture that provides relief from epilepsy in pets, or food supplements and anxiety medication infused with CBD? There are countless niches to try out. Market research goes a long way in finding the most profitable business opportunity. Knowing what currency in demand should help you develop a business plan that’s guaranteed to succeed.
3. Acquire a license and structure your business
Once you have determined the niche you want to leverage, you will need to register as a CBD business in your area. The good news is that most areas won’t require a special license to sell CBD products. All you need is to obtain a business license whether you are planning on setting up a physical store or an online platform. You must also register for an EIN and start paying CBD excise taxes if your state requires it. In addition, you should also identify the right legal structure for your business. Since you are starting out, you might want to opt for a limited liabilities corporation or LLC.
4. Build your brand
To help you stand out from other CBD businesses in your market, you will need to spend time and money on building a brand. Start by setting up a memorable and unique name for your business. You should also determine your brand colors and typefaces you can incorporate in your custom cannabis packaging, social media pages, and website.
If you’re thinking about building a CBD business, the demand for CBD products is rising, so it’s best that you leverage this unique market as it continues to grow.
