starting a cbd business

CBD (cannabidiol) is a natural compound found in the hemp plant that seems to be taking the health and wellness industry by storm. Recent studies have emerged showing its medicinal properties, and there is a multitude of personal testimonies boasting of its health benefits. It is estimated by some analysts that the CBD market may grow to a valuation of 22 billion in the next four years.

Though the CBD market has been on a steady incline over the past decade, it has really begun to flourish recently. With the regulatory stance to the hemp plant changing globally, it is now considered one of the most promising industries. For entrepreneurs and investors, it creates an opportunity like no other to build businesses that cater to the ever-increasing demand. As with most emerging markets, the ones who are capitalizing early, are the ones that will most likely reap the rewards long-term.

starting a cbd business the legal bit

These are some factors to consider before starting a CBD business

Legal Climate

It is important to understand the law within your district and the best ways to achieve compliance. Despite the positive impact of CBD and other hemp derivatives, it can still be considered a legal gray area in most states. For instance, CBD derived from hemp is considered legal across the US, whereas CBD derived from marijuana (THC rich hemp) is still illegal in some places. On a molecular level, they are the same compound, however the source of extraction matters from a legal perspective.

There is also a lot of official research yet to be done in order to substantiate many of the claims that have been made about CBD. Though there have been approvals from the FDA for a CBD drug as recent as July 2018, caution is advised especially when making direct claims about your product. The existing evidence, though overwhelming, is not enough to support the narrative that it ‘cures ailments’ or ‘heals disease’. It is much better to be transparent with your customer and wisely present your product as an option that may be helpful with their condition.

 The raw materials needed for starting a cbd business

Source of Raw Materials

Knowing as much about the source of your CBD as possible is a sure way to ensure that you are getting the best quality for your investment and helps to hedge your business from legal woes. Cultivating your own hemp is obviously the most cost-effective method, and allows for more stringent control during the manufacturing process. If this is not possible, there are many reputable cultivators and wholesalers who may meet your requirements.


When seeking a reputable source for your product, it is vital that they are transparent about their practices and even the location of their farm. Location tends to be an excellent indicator of quality, and it is always best to deal with cultivators that have had years of experience in the field. Another important consideration is how they extract the CBD. Some methods involve the use of toxic chemicals which may be detrimental for your customers and by extension your business. It is better to ensure that a clean, safe approach is used, such as CO2 extraction.

cbd lab testing

Lab Testing

Testing is absolutely necessary to ensure that you are not selling a product that may be potentially hazardous to the health of the consumer. Usually working with a reputable supplier helps to reduce this risk; however, it is recommended that third-party tests are conducted as a precaution. Not only does it add legitimacy to your brand, but it also helps to safeguard the business from potential liability.

Lab tests are also helpful in determining the levels of THC within the product. This is vital information, as items that contain THC may be subject to more restrictions depending on your location.

starting a cbd business online

Online or Retail

Across most existing industries, online business is beginning to eclipse existing retail models. However, there are advantages and disadvantages to each that need to be thoroughly examined before a decision is made. The online model helps to cut the operational costs of running a physical facility and allows you to reach customers way beyond your location. It provides the convenience of running a business from anywhere and helps to circumvent some of the restrictions that may apply to running a CBD company in your area. This relatively low barrier of entry makes it the go-to method for most startups.

On the other hand, a physical retail store allows you to interact directly with your customers. The personal touch tends to go a long way in building long-lasting, profitable relationships. For a relatively new field like CBD, this may be a great way to clear up some of the misconceptions and give much better customer service. There is still a segment of society that prefers to do their shopping in person, and a physical store helps you to reach them.

When starting any business, due diligence is absolutely necessary to gain a proper understanding of your product, the industry and find the best way to meet the needs of your customers. The research never stops. In an emerging market, this is especially true, as keeping on top of the trends may be helpful in maintaining your competitiveness.

The other question you need to ask before starting a CBD business is, do you have what it takes to succeed? Having done all your due diligence, strength, weaknesses and competitor analysis you still need to answer that question for yourself. And you have to be honest. There’s no doubt that starting a CBD business is exciting especially as it’s an emerging industry that has the potential to help millions of people around the world. And when you think about the potential profit to be had then it seems like a no-brainer.

Learn as much as you can about the product and how to start a CBD business before committing yourself. But if you do decide it’s right for you commit fully and you could have something very valuable on your hands. Here are some good places to start your CBD education and research.

CBD research resources

if we’ve piqued your interest in starting a CBD business then it makes sense to get as much education on the benefits, use and side effects of CBD so here are some resources to help you learn more about it: