The CBD industry is an incredibly lucrative one. As this industry is expected to be worth $16 billion by the year 2025, adventurous entrepreneurs are often keen to get in on the ground floor of this market with their own CBD businesses. However, growing a profitable CBD company presents more challenges than a typical startup. Consider the following tips if you’re thinking about starting your own CBD company:
1. Understand Basic Business Practices
Entrepreneurs that are interested in launching their own CBD company should approach it as they would any other startup. Aside from the fact that they’re selling CBD, the same business practices should apply. With an overwhelming number of people gaining interest in using cannabis for medical and recreational purposes, entrepreneurs interested in CBD can take advantage of this explosive industry.
2. Know Your Legal Obligations
While you can begin your CBD company in the same way you’d launch another business, there are a few key legal distinctions that apply to this industry. As of right now, CBD is still in a grey area. Federal law has yet to legalize cannabis use, making it illegal for businesses to market CBD products as having health or medical benefits. As a result, many businesses that previously sold CBD infused beverages and foods were forced to pull their products off the shelf.
With such a complicated legal landscape surrounding cannabis, entrepreneurs that hope to make selling CBD products their business must tread lightly. According to Cyrus Baseghi, business owners must carefully research the laws in their state and region to determine what they can and cannot sell. With the ever-changing laws in the CBD industry, entrepreneurs must carefully stay abreast of changing developments as the FDA sets forth new regulations.
3. Market Your Products Appropriately
As the laws surrounding the selling of CBD are quite unclear, business owners have to be particularly wary of how they market their products. Advertisements for CBD companies that are too explicit may land business owners in legal trouble. To illustrate, entrepreneurs that try to promote their CBD products through eBay, Amazon, or social media will find it nearly impossible as these platforms often threaten such accounts with bans or suspensions.
To attract a following of new customers, entrepreneurs often have to drive their own growth through organic content that doesn’t overtly promote CBD. Experts like Cyrus Baseghi share that successful advertising for CBD products requires a fair bit of creativity and discretion. Entrepreneurs often create their own eCommerce stores to sell their CBD wares online. Similarly, many business owners rely on word-of-mouth to attract clients to their brick-and-mortar stores. This way, they can avoid all the legal grey areas online and still profit off of the ever-expanding cannabis market.
4. Get Creative with Funding
Entrepreneurs often find it challenging to get funding for their new business endeavors. With CBD, the process of finding funding is much more challenging thanks to the legal confusion surrounding cannabis. As many lenders and banks are hesitant to provide funding to CBD companies, many entrepreneurs have to either finance their business themselves or go outside the typical avenues for financial support.
Don’t miss out on getting in on the CBD market. If you want to start your own cannabis business, be sure to keep these tips in mind