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The Incredible Benefits of Starting a CBD Business – The New Gold Rush

The Incredible Benefits of Starting a CBD Business – The New Gold Rush

Our last few articles have talked about how to start your own CBD retail business. But the one question we haven’t covered yet is, why? What makes CBD sales such an appealing business, as opposed to the myriad other products you could sell? Well, there are a number of reasons why CBD is a great option—especially now! Let’s take a look at some of the benefits.

Looming Possibilities

In the 1840s, California was a small territory without much to distinguish it. Then in 1848, James Wilson Marshall discovered gold at Sutter’s Mill, and all at once, the whole area was transformed. People came from all over the world, seeking their fortunes. The population exploded, businesses boomed, and the rest is history.

Things can transform like that in the blink of an eye, all because of one event. And last year, this country had another such event. President Trump signed a bill into law legalizing hemp and hemp-based CBD at the federal level for the first time.

And now that it’s legal, demand for it will grow exponentially. There are currently still only a few states where CBD is legal, but with this federal approval, more and more states are passing laws to allow it. Texas just legalized CBD for the first time, and Illinois has legalized recreational cannabis. As time goes on, more and more states are expected to follow suit, each one bringing with it an increased demand for CBD and CBD products.

Striking Gold

The more states pass legislation to allow CBD, or relax their restrictions on it, the more demand there will be, and the more money there is to be made. By starting your CBD business now, you can get in on the ground floor of this industry, just as it explodes, and position yourself to meet that demand as it goes up and up and up.

So, just how much money is there to be made from CBD? Well, last year, CBD was a $591 million industry. Since the legalization of hemp, it has grown to approximately a $1 billion industry. And some experts predict that, by 2022, there could be as much as $22 billion being made from hemp and CBD.

The thing to understand is, with the legalization comes the ability to do things that sellers previously couldn’t. You can sell CBD on grocery store shelves: Kroger, CVS, and Walgreen’s, are all carrying CBD products now. You can also promote your CBD products through more conventional methods than you could before, including sponsored ads online, particularly on social media. A few well-placed promoted posts can get your brand seen by thousands, even millions of pairs of eyes, and drum up huge amounts of interest for your products.

And the thing to remember is, this is only the beginning. As more states continue to legalize CBD, the opportunities will only increase further. And if the FDA approves CBD for use in commercially sold food and drugs, it will open your business up to even more opportunities and billions more potential dollars.

Now is the time, though. This, right here, is Sutter’s Mill. Gold has just been discovered. Will you wait around while others swoop in and take it all? Or will you fight for your share, and make your fortune? By getting in on the ground floor of CBD sales, a virtual goldmine is yours for the taking.


 

How to Start a CBD Retail Business – Part 3: The Business Side

How to Start a CBD Retail Business – Part 3: The Business Side

Welcome to part 3 of our series on How to Start a CBD Retail Business. We’ve covered different products you can sell, and how to find a reputable supplier. Today, though, we’re going to talk about some of the more challenging aspects: specifically, the ins and outs of actually starting a business. If you just start selling CBD products for cash out of your garage, Uncle Sam will likely have something to say about it, which could land you in a good deal of trouble. Here are some of the business things you need to know and do before selling CBD.

Money Matters

Start with a budget. How much will everything cost. That includes buying the CBD products themselves, but also a great many other things. Are you operating out of a physical location, or selling online? If you have a store, do you need to pay rent? Will you need cash registers, shelves, furniture, etc.? Will you be hiring other employees, and how much will you pay them?

If you’re selling online, how much will you need to cover shipping and shipping materials? How much will it cost to design your website? Will you send out ads and other promotional materials? Those cost money too. Sit down and plan out your budget, determining how much everything will cost, and how much you’ll need, in order to get started. You may decide to hire an accountant to help you with that—which will also cost money.

Once you have your budget, you need to open a bank account under your business’s name, complete with a checkbook and credit and/or debit card. Keep those funds separate from your personal funds, and use that account for all business transactions. Again, if financial management isn’t your strong suit, you may want to hire an accountant or bookkeeper, to help you keep everything straight.

Paperwork

There’s a lot of paperwork involved in any business. You may want to talk to a lawyer with experience in business and corporate law, to help you figure out everything you need to do. First, it’s a good idea to establish your business as a separate legal entity from yourself (e.g. an LLC). That way, if anyone sues the company (whether for a legitimate or a frivolous reason), you won’t be personally liable. You’ll also need to register for business taxes, both at the state and federal levels. Your business will need to file every year, to report your earnings and expenses.

Finally, when selling anything, but particularly CBD and CBD products, there are a number of licenses and permits you need to obtain. These tend to vary by state. If you don’t have all of your permits in order, you could face some serious penalties. Again, talk to a lawyer, who can walk you through the process and make sure you have everything you need.

All of this business stuff can seem daunting if you’re not used to it. Don’t be afraid to reach out for help on anything you’re not sure about. In any business, having a good support team behind you is a vital part of your success. With a little hard work and a little bit of help, your CBD business will be on its feet and thriving in no time.


 

How to Start a CBD Retail Business – Part 2: Finding Suppliers

How to Start a CBD Retail Business – Part 2: Finding Suppliers

Welcome to part 2 of our 3-part series on how to start a CBD retail business! Last time, we talked about the different types of CBD products you can sell, and some of the legal implications. But no matter what you decide to sell, first you’ll need CBD. How do you find a reputable supplier? What are you looking for?

You can find plenty of CBD suppliers, just by looking online. You can buy it through a website, or, depending on where you’re located, there may be local brick and mortar suppliers as well. Do some research, and see what your options are. But the key is to vet them, and make sure they’re reputable. Here are a few tips.

Sourcing and Extraction 

Does the seller grow their own hemp, or do they source it from somewhere else? If they grow it themselves, find out what methods and practices they use when growing it. If they source it from elsewhere, then where does it come from? How much experience does the grower have? Do they have a good reputation? Growing hemp has been legal in Europe for longer than in many other places, so their farmers tend to have more experience. Therefore, hemp sourced from Europe is often more reputable.

The next question is, how do they extract the CBD from the hemp? There are a number of methods, and some are better than others. Some methods use chemicals, which can then remain in the CBD once it’s extracted. If you want your CBD to be pure, look for a seller that uses CO2 extraction. It takes a bit more time and effort, and will likely cost a little more, but it’s safer and cleaner. It’s worth the extra money to be able to provide your customers with the highest possible quality product.

Reputation 

Any supplier will tell you that theirs is the best product you can buy. But how do you know for sure? First, if they tell you anything about the incredible medical benefits of their CBD, that’s a big red flag. CBD isn’t regulated by the FDA, and therefore, sellers aren’t allowed to make any claims about its medicinal properties. In fact, their website should have a disclaimer from the FDA to that effect. If they don’t have the disclaimer, and/or are making medical claims, then they’re a bit shady, and you probably shouldn’t do business with them. (And keep in mind, the same regulations will apply to you, once you start selling.)

Additionally, for any product you buy, make sure to get a Certificate of Analysis (COA). It’s a brief overview of the quality of the product you’re buying. It tells you how much CBD is in the product, what level of THC is in the CBD (federal law says 0.3% or less), and other important info. If you’re still skeptical, you can hire an independent third party to test the product and confirm its quality.

Also, look at the price. Obviously, you don’t want to pay too much, so that you can maximize your profit margin. But if the supplier is selling their product dirt cheap, there’s probably a reason. CBD prices can vary, but do your research to see how much you can expect to pay in your area, how much is too much, and how much is so cheap that you should be suspicious.

Those are the basics of what you need to know when it comes to finding and vetting CBD suppliers. But once you have your CBD, then what happens when you actually start selling it? You can’t just start taking people’s money. There are a number of things you’ll need to do, to make sure your business is properly set up and legal. We’ll cover that in our next installment of How to Start a CBD Retail Business, entitled, The Business Side