How to start a CBD Business

Starting a new business is an exhilarating endeavor filled with challenge and risk, but also potential for great reward. The blossoming CBD industry is no exception, and for eager entrepreneurs looking to build their own CBD businesses, the rewards can be both monetarily and socially fulfilling.  

 

The CBD industry is in a period of great growth and evolution, as progress in technology, science, education, and law is realized across the nation and world.  The cannabis plant and, more specifically, CBD are no longer taboo or fringe topics, which could only to be discussed behind closed doors, but are instead finding footholds in numerous facets of our day to day lives in ways few dreamed possible. It's right about now you're probably thinking, "How do I start a CBD Buisiness?"

 

With the passage of the Agricultural Improvement Act of 2018, hemp and, by extension, CBD was removed from the list of controlled substances at the federal level; however, regulations at the state level remain.  As you consider building your very own CBD business, it is crucial to understand the product and packaging requirements relevant to your target market(s).

 

As with many regulated products such as cosmetics, foods, or pet treats, CBD products and businesses must meet differing sets of guidelines in order to be considered fit for market.  These regulations can seem intimidating and even insurmountable, but with a sound business plan and the appropriate partners, a compliant and sustainable business with quality products and a trustworthy brand is very achievable. 

 

To help companies optimize resources and develop quality product sets, which in turn drives the CBD industry forward, CBD.io has positioned itself as a full-service CBD company, offering white glove consulting and product development services to its customers and partners.  

 

Throughout this article we will discuss different topics entrepreneurs should consider as they work to take their new CBD businesses to the next level as respected and recognized brands, and will highlight the many service areas where CBD.io can support you on your journey. If you are ready to dive in immediately, contact CBD.io via our Private Label or Wholesale sign up forms to get your business started today.

CBD Branding and Packaging

Whether you’re looking to launch the next hit line of natural CBD cosmetics, puppy-safe travel treats, or calming teas, your product design and packaging should reflect the goals, message, and personality of you and your business.  As with any industry, the branding and packaging you create for your new CBD business will be the first impression a potential customer has with your product.  

While some states are more lenient with regulations relating to the branding and packaging of CBD products, other states have very strict guidelines for how these products must be labeled and packaged.  These guidelines are also updated periodically, so it is important to stay up to date on the rules and regulations impacting your intended markets, to facilitate unfettered success.

 

As you build your new brand, or refine an existing one, here are a few branding topics to consider:

  • Business Name

Find a name that fits the look, feel, and intention of your product. 

For example, it would not be advisable to name your CBD dog treat company “High Times,” as your products will not contain psychoactive or otherwise intoxicating elements, as the name implies, and could appear harmful to a puppy. 

Ensure the name is not already taken and does not have any close variants, to emphasize the uniqueness of your brand, and to avoid any trademark issues.  

  • Personality

It is important to define the personality of your brand, as that will influence your package design, website, and other marketing materials.  

CBD has a multitude of applications and, by and large, allows the majority of personalities to shine. This means that whether you’re promoting your brand as a “serious” remedy for a specific ailment, or you have a more playful message for your CBD bath bombs, your personality can, and should, show through.  

Although most personality types fit in the CBD industry, as with the name, it is important that you keep your product set and target audience(s) in mind as you apply that personality to your branding and packaging. 

  • Message

Your message should tell your story and answer the question of “WHY” your company does what it does. WHY did you get into the CBD industry and select your product set? 

Your message should be conveyed through your package artwork, your logo, your copy, your product ingredients, and even the products themselves, which you choose to include in your portfolio.  

Everything from your packaging to your company culture should be consistent with your message, if your goal is to build a reputable and trusted brand.

  • Target Audience 

As with all businesses, it is crucial to understand who you are developing your products for, and what need you are satisfying. 

With the restrictions placed on CBD by numerous states, your target audience may change from market to market, so it is important to keep that in mind as you work to make informed decisions about branding and product sets based on anticipated audience size.  

  • Intended Use/Application of your CBD Product

Similar to how you named your company, it is important to take into consideration the end goal or application of your CBD product, as you work on the branding and packaging.  

Using the same example as before, if the intended use of your product is to decrease stress for traveling pets, then the image of a sleeping puppy on an airplane would better embody the goals of your product than imagery stereotypically associated with THC – bloodshot eyes, smoking, etc.

  • Differentiation

What makes you unique?  Why should someone choose your product, versus the product(s) directly adjacent to yours on the shelf?  

Are you the least expensive? Are you certified organic? Is your product the first of its kind? Do you have science to back up your product benefits? 

In a competition for shelf or screen space, your packaging and branding must stand out and tell your story at first glance.

 

So now that you have gone through your branding checklist, it’s time to consider packaging.  Your packaging is the most tangible extension of your brand and will be the final pre-purchase impression a consumer will have.  

When designing and sourcing packaging, it’s especially important to take into consideration the following topics:

Sales channel – eCommerce, retail, or both?

Each sales channel has different implementation requirements when it comes to packaging. Consider your sales channels and build packaging that meets the requirements of the most strict vendor.  From there, you will only need to design your packaging one time, saving time and money. 

Packaging materials and sustainability

There are countless manners in which to package your products in terms of shape, size, material, and material weight.  Here at CBD.io, the sustainability of our products, packaging, and processes are of utmost importance, and many consumers in the CBD space agree! We encourage you to consider the environmental footprint of your business, and to make informed decisions accordingly for your packaging needs.

Quality and style do not have to be sacrificed in order to have sustainable packaging.  Let us show you how!  

Cost

As you develop your attractive, durable, and sustainable packaging that you know will catch everyone's attention, keep in mind that the cost of your packaging will ultimately impact the overall cost of your final product.  Be sure the price of your packaging meets your business needs, and allows you to sell your product in the price range allowed by the market. Here's some issues to consider:

For example, try not to spend $4.50 on packaging for a product that retails for $5. 

Storage Requirements for Products

Is your product perishable?

Are there retail requirements for product space?

Are parts of your product or packaging breakable?

State Laws

Many states, even those with the most liberal CBD and THC laws, have put in place regulations on how a CBD or THC product can be packaged and labeled.  Ensure you stay up to date on these regulations for all of your target markets, to avoid issues.

CBD.io’s inhouse team of designers and branding experts will work with you to take your brand from concept through to finished product in a timely and professional manner. For additional CBD related resources visit the CBD.io Marketplace Blog for answers to frequently asked CBD questions, how to's, and cannabis industry news.

Sourcing Raw Materials – How to Purchase CBD in Bulk

Do not stake the reputation of your company on the chance you could be buying fake or low quality CBD.

Perhaps the most important, yet most daunting, stage of starting a new CBD business is the procurement of quality materials – CBD oils, tinctures, extracts, flower, etcetera – to make your products. With the increased interest in the CBD industry has come an influx of knockoff products, positioned as product-ready CBD oils, extracts, and tinctures. You can count on the experts at CBD.io to provide state of the art manufactuing process and quality as seen here with our GRN CBD oil production line video.

A quick search on Amazon.com for CBD will provide you with over 7,000 legitimate looking results, despite Amazon’s policy that CBD cannot be sold on their platform.  This is because vendors position “hemp oils” as being the same as, or having similar medicinal and therapeutic properties as, CBD – science says otherwise.  In addition to Amazon, it has been observed that other CBD marketplaces list products that purport to be CBD oils or extracts, but upon 3rd party review, only contain small amounts of CBD, with other fillers making up the rest of the solution. This is made possible by a lack of product oversight and loopholes in regulations that do not require exact percentages of CBD to be listed on the packaging, meaning that a solution with a trace amount of CBD can still be sold as a CBD oil or similar product. 

CBD.io’s dedicated, in-house team of product development experts – Ph.D. biochemists, organic chemists, mixologists, and food scientists – are ready to help you to not only identify the raw materials you need, but to handle every step of the manufacturing process on your behalf.  All CBD.io CBD is guaranteed and third party tested, to ensure the quality and efficacy of all CBD.io products, whether private label, bulk/wholesale, or otherwise.

Wholesale materials available through CBD.io include:

CBD “Crude” Oil

Flower

CBD Tinctures

CBD Distillate

Full-Spectrum CBD Oil

Broad-Spectrum CBD Oil

CBD Isolate

CBD Gummies

Product Development

 

 

After you have selected your wholesale partner and have sourced the raw materials you will need, it’s now time to build out your product set(s). Product development should be the most enjoyable part of running a CBD business.  Your product is the service you are providing to your customers, and is the embodiment of your efforts, branding, business strategies, and goals.  Although a strong brand can build an energetic and loyal community of customers and followers, a quality product is what will keep your customers happy and coming back for more!

As you consider which products you wish to produce, it is important to keep in mind what your brand message and goals are.  Incorporating too many products into your portfolio at one time can sometimes become cumbersome, dilute your brand, and/or lead to a sacrifice in quality. Product expansion should come as a result of customer input, organic growth, “intentional” internal innovation, or shifts in the industry.

In many regards, the considerations you make for product development should mirror the process you went through for brand creation – Who is your target audience? What is your mission? What is your brand message?  Other topics that should impact your product decisions include market saturation, available technologies, legal hurdles, and other barriers to entry.

CBD.io’s in-house team of industry experts, scientists, and strategists approach all partnerships and product development in a two-step process:  

First, the appropriate CBD.io team members work with you from a consultative standpoint, to break down your needs and develop a roadmap to product and brand development. 

Second, after your roadmap has been created, CBD.io’s development teams set to work, putting your plan into action – branding, packaging, and/or product development.  Whatever your goal is with your suite of CBD products, CBD.io has the expertise to take your concept from ideation to marketable product.  

CBD.io has partnered with clients to develop and launch numerous product sets since our inception:

Flavored CBD Gummies and Edibles

CBD Lotions, Salves, and Balms

CBD Bath Bombs

CBD Oils and Tinctures

CBD Shots and Beverages

CBD Supplements and Vitamins

CBD Flower and Smokables

How Can I Legally Sell CBD?

Although the Agriculture Improvement Act of 2018 (2018 Farm Bill, PL 115-334) removed hemp and, by extension, CBD from the list of federally controlled substances, under the Controlled Substances Act (CSA), there are still numerous legalities about CBD to consider.  

Upon removal from the CSA, CBD was placed under the authority of the U.S. Food and Drug Administration, and is managed similar to other regulated substances under their control.  To date, the FDA has only approved “one cannabis-derived and three cannabis-related” drug products.  The FDA also maintains that CBD is not permitted to be sold as a food additive for human consumption, nor in animal food, until further testing is conducted.  

These restrictions at the federal level have led to a situation similar to what we find with CBD’s cousin, THC, where states have now enacted laws to allow for the sale and distribution of CBD products, outside of the FDA’s guidelines, within their respective states. It is for this reason that it is a must to stay up to date on the rules and regulations specific to each of your target markets, as each State has implemented their own sets of rules and guidelines. 

Looking for additional ways to start or grow your CBD business? 

Are you ready to launch your business, or already have one, but are having a tough time gaining traction?  CBD.io’s annual Expo brings in buyers, sellers, and experts from around the world to network and grow the CBD industry. In Fall 2020 CBD.io will present the G4 Live Expo in conjunction with the Budtender Awards, September 17-19 at the Mandalay Bay, Las Vegas. 

The CBD.io Expo is a world class convention featuring hundreds of vendors, legal experts, entertainers, guest speakers from across the industry, and, as a recent addition, THC partners and experts.  The Expo is also host to the prestigious Bud Tender Awards for excellence and innovation in the field of cannabis. Sign up for CBD.io Expo Alerts. If your looking to start a CBD business, the G4Live Expo presented by CBD.io is a great place to kick things off.

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In addition to the Expo, you can start your journey to CBD success by subscribing to the CBD.io newsletter, where you will receive the latest industry insights, wholesale and retail deals, and Expo updates. Subscribe today for free!

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