As any good entrepreneur knows, every startup begins with market research. If the market can’t sustain the product you’re introducing, it’ll tank before you hit the five-year mark, and you’ll lose money the entire time. This underscores the importance of choosing a product or service that is currently in high demand.
Those looking to start a business in the near future should really consider the fast-growing CBD industry. CBD products, like the ones on https://penguincbd.com/, which can be purchased online without a prescription, are oil drops or supplements taken from the hemp plant.
Unlike marijuana, they do not give you a “high,” but they’re still somewhat of a controversial product today. Still, research shows that the industry is poised for growth and could be among the largest money-making industries in the very near future.
CBD Market Poised for Incredible Growth
The statistics show an incredible potential for growth before the year 2020. One report from The Hemp Business Journal estimates that the CBD market will be worth $2.1 billion by 2020. About a quarter of those sales are expected to come from hemp-based products. When compared with the sales in 2016, this is a 700 percent growth rate.
Matt Karnes of Greenware Advisors told Forbes that he believes the growth will continue at an exponential rate. In 2021, he expects the market to have reached $3 billion dollars. He also reports that 38 percent of marijuana users are interested in the product, which indicates a significant market for growth that won’t slow down anytime soon.
These statistics are surprising, but another report from the Brightfield Group believes that the hemp-CBD market will grow even more. They say that by 2022, it could be reaping as much as $22 billion. These statistics come with the expectation that CBD will become a more universally accepted drug based on its many advantages and more states making it legal to sell over the counter or by prescription.
CBD Must Be Sold Legally
If you want to jump into the CBD market now before it explodes, you have to follow the legal route. Nobody wants to make a mistake with their business that could lead to fines or even jail time.
CBD sales are stiffly regulated both at the federal and state level. There are many state and federal laws that make selling CBD products very difficult, but the savvy and dedicated entrepreneur can successfully navigate them.
First and foremost, federal law prohibits sales of any CBD products extracted from marijuana. There are indicators in trends and past legislation that predict this could change in the very near future. However, for the time being, the only CBD products that can be sold legally are those taken from the hemp plant, but not the part that creates marijuana.
This means avoiding products high in THC, which has psychoactive properties that will get you “high.” Marijuana has very high levels of THC while cannabidiol (CBD) has none or negligible amounts. The federal law allows the sales of CBD products with less than 0.3 percent THC.
Your state will also have strict laws regarding the sale of CBD. Some states may prohibit its sales altogether, although you may be able to circumnavigate that with certain types of online shops that sell to states where its purchase is legal.
If you’re jumping into this business now, it’s essential that you abide by current legislation. Failing to do so could lead to significant consequences. However, keep your eye on new rules and regulations, as the marijuana and CBD industry are growing more and more acceptable in the eyes of voters.
It’s wise to hire an attorney who specializes in selling and distributing CBD products. They can help you adhere by all the laws, avoid certain penalties, and escape lawsuits that could cripple your business. CBD retail is still somewhat of a risky endeavor, so an attorney will help you to reap all the incredible rewards of sticking with it.
Starting Your Own CBD Business
By this point, you’ve probably taken in the unbelievable profit potential from CBD that’s sold legally and are ready to put that money in your pocket. Doing so requires a carefully laid out plan that considers all of the legal requirements and the competition. Follow these steps to successfully start your CBD business.
Write Your Business Plan: You’ll likely need investors or banks to back your business, and given the legal requirements you have to follow, you must prove that you know what you’re doing. A carefully-drafted business plan that factors in financing methods, products, customer/market analytics, a marketing plan, your strategy and implementation, and sales forecasts will help you secure investors as ready for this market as you are.
Choose Good Suppliers: When selling CBD, be very careful where you get your products. Some CBD suppliers list their THC levels at lower than they actually are, which means you’re getting tainted products that could be dangerous for consumers and hurt your business. Check for a legitimate certificate of analysis (COA) that guarantees an appropriate amount of THC, CBD, and other molecular compounds in each cannabis product. Research suppliers very carefully to ensure safety and trustworthiness. Many consumers of CBD use it for things like relieving symptoms of PTSD to anxiety, so they need to be assured you have high-quality products.
Find Payment Processors: Many payment processors refuse to work with CBD businesses because of the risks associated with those who cut corners. In today’s market, you can’t hope for success by running a cash-only business. It’s not realistic and it makes your company look shady. However, there are a few high-risk merchant account providers out there who will take you on. Just do a little research ahead of time.
Write Legal Policies: Use your attorney’s counsel to help you write legal policies that will protect you from violations. It will also build trust with your customers who don’t want to break the law when purchasing a CBD product.
Work on Your Website: Your e-commerce site needs extra love and attention to attract your ideal clientele. You’ll need well-written product pages, blog posts that generate traffic and explain benefits, a design that attracts customers and then converts them, and all the legal requirements associated with it. An attorney can help you make sure your website is legal and uses the correct jargon.
Market Your Products: A sound marketing and branding plan will carry your business forward quickly. A good brand will focus on customer service and education, including convincing naysayers that your product is advantageous and legal. You’ll also need a fantastic social media strategy that considers both the positive and negative implications of using these products.
The CBD market is poised for growth and the savvy entrepreneurs who aren’t afraid of a little risk will jump in head first. The rewards in this industry are off-the-charts, and it gives you an opportunity to establish a brand early on that will remain successful for years to come.