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Cannabis has taken the health and wellness industry by storm. With states continuing to legalize the substance for both recreational and medicinal use, the opportunities to step into this lucrative business are quickly expanding. Within this realm, there are many different sectors that one is able to break into. However, arguably the one that has the most potential for being long lasting and profitable is CBD.
What is CBD?
CBD is one of many cannabinoids that exist inside hemp and cannabis plants. Another well known compound called tetrahydrocannabinol, or THC, is also prevalent on the market. The main difference between the two, however, is that THC causes users to experience a euphoric “high” while CBD does not. Instead of using it for the point of creating psychoactive effects, CBD has grown popular due to its therapeutic abilities — proponents call upon benefits such as anxiety relief and even treatment for some problems caused by epilepsy.
How are CBD products made?
The production of CBD for use in marketable products is usually supported by way of a multi-step process. The procedure starts with the raw material being harvested (this usually occurs on a farm in Colorado or another area in the west coast of the United States due to the perfect conditions for the growing of hemp and cannabis). Those looking to enter the CBD product business will need to do one of two things: either purchase a large amount of hemp that they can harvest themselves or purchase pre harvested hemp from an existing farm.
After this, CBD oil is extracted from the plants to be used as a product that can be sold (the extraction process can also be completed yourself or outsourced to another existing company). CBD oil is commonly sold by itself as a concentrate or in the form of items such as topicals, edibles, and tinctures which have been infused with the oil.
How can I start a CBD business?
Like with any other business, there are general steps — such as getting a license and developing a business plan — that must be taken to ensure that you have a good foundation for success. The advantage provided by the CBD sector, however, is that it is quickly expanding and is revolutionizing the health and wellness industry. Because of this, there aren’t as many concerns regarding the longevity of the products in regards to their popularity. Along with this, CBD products have a diverse number of potential demographics which provide an endless amount of possibilities when it comes to marketing. For example, there are CBD businesses that advertise their products for everything from arthritis to stress problems in dogs.
What is the legality of CBD?
One of the main questions that people interested in starting a CBD business have revolves around the legality of CBD and what specifically can and can’t be done. In 2018, the United States legalized all industrial hemp and products made from it (such as CBD oil). Despite this, there is still somewhat of a tricky situation when it comes to the regulations placed on the products. As of now, the FDA (who is responsible for placing regulations on the hemp industry) is still sorting out the specifics. Regulations such as how the oil can be labeled and what products it can freely be included in are still things that exist on a case to case basis.
It is critical that you play it safe when attempting to break into a business such as this. While the industry is quickly becoming more accepted by a wide range of people, it is still fairly scrutinized which makes it important to be cautious and understand its legality.
What challenges come with starting a CBD business?
There are several unique challenges that come along with starting a CBD business that you wouldn’t face in any other industry. There still exists some reluctance to this sector which can make it a little more difficult to complete the steps needed to start your own business. It is important to be aware of these potential challenges when first getting started:
Resources for capital: Those who supply capital, such as lenders and banks, have been reluctant to support CBD businesses in the past. They view the industry as risky which has forced many startups to rely on outside investors to support their plans.
Affordable insurance: Despite the fact that hemp products have been legalized, many insurance companies offer elevated prices to applicants. This is a common trend as the CBD industry continues to solidify itself as one that is viewed as legitimate.
Banking: Similar to the other problems mentioned earlier, banking is another tough area for CBD businesses due to how they perceive the industry. A significant portion of banks view the industry as being risky which can sometimes be an obstacle for smooth operations.
Should I get into the CBD industry?
While there are a variety of unique challenges that one may face when attempting to start a CBD business, the potential for success is immeasurable. As research continues to solidify the benefits of CBD oil and more people become aware of its natural advantages, the popularity will continue to skyrocket. With innovation and some due diligence, anyone can establish a CBD business that is successful.