CBD presents a massive business opportunity for both established health and wellness businesses as well as for new businesses to emerge.
This is because CBD has become one of the most popular products in the U.S. since the 2018 Farm Bill legalized the production and sales of hemp on the federal level. The U.S. went from being unfamiliar with CBD to having CBD promoted in grocery stores, corner stores, and gas stations almost overnight. And, the CBD business is only going to grow in coming years.
But just how big of a business opportunity is CBD?
Industry analyst BDS Analytics predicts the U.S. CBD market will reach $20 billion in sales by 2024. And in this article, we’re going to explain how you can start a CBD brand so you can get a share of the massive opportunity in the coming years.
So, let’s dive right into it…
Starting a CBD brand
You have two options when you’re starting a CBD brand:
- You can add it to your already-existing brand
This works especially well if you’re already in the health and wellness retail industry since you already have a brand people know and customers to promote to. We’ve seen businesses such as medical practices, holistic health treatment facilities, spa salons, supplement stores, pet care shops, vape shops, natural food stores, and yoga centers do this with relative ease.
And, if you already have a business, then you won’t have to waste any time getting a business license, corporation, and EIN/TIN numbers for your business since you have already done this.
- You can launch a new brand from scratch.
This is the route you’ll have to go if you don’t already have an existing business. It will be more difficult launching a CBD brand from scratch as you’ll have to put more focus on having a solid business plan and marketing strategy. Not to mention, you’ll need to jump through all the legal hoops that starting a business entails — such as getting a business license, corporation, and EIN/TIN numbers for your business.
But you can achieve high levels of success if you’re willing to put in the work.
Now that you understand the two different options you have for starting a CBD brand, let’s cover the legal side so your CBD brand is staying safe and compliant with federal laws.
Understanding and complying with CBD laws and regulations
There are several important considerations you need to understand to make sure you comply with the federal laws regarding CBD and hemp.
Hemp (including all cannabinoids ) was legalized in the 2018 Farm Bill, so long as the THC level does not exceed 0.3%. If it has more than 0.3% THC it is considered illegal.
Make sure to check in with your local state Department of Agriculture so you can be sure that you’re staying compliant with your state.
Then, if you don’t already have a business license, corporation, and EIN/TIN numbers for your business, you’ll need to do so. You also need to make sure that your CBD product dosage, packaging, and company terms are transparent.
Also, you should strongly consider getting a Certificate of Analysis for each CBD product you offer. While this is not legally required, it’s best to be as transparent as possible to develop trust between your brand and customers.
Not sure what a Certificate of Analysis (COA) is? Click here to read our article on the topic.
Now, let’s discuss creating a business plan and marketing strategy for your CBD brand.
Creating a strong business plan and marketing strategy
Whether you’re adding CBD to your already-existing business or launching a new brand from scratch, you need a plan to promote your products.
The first thing you need to do is figure out who your ideal client is. The more specifically you can picture this person, the better off you’ll be.
You need to know how old they are, what gender they are, what other kind of health and wellness products they’ve purchased in the past to start. This is important because different demographics of people will prefer one CBD product over another. For example, vaping CBD is more popular among younger people, while CBD capsules are more popular for an aging demographic.
Let’s cover all the most common CBD products:
- CBD oil tincture — you can apply this tincture directly under your tongue and feel almost instant benefits. This is a popular product for all CBD users.
- CBD edibles — edibles usually come in the form of candies or chocolates. They offer one of the most accessible methods for trying CBD, which makes them popular for all ages. But, edibles generally have added sugars for taste, so make sure your ideal client isn’t diabetic.
- CBD capsules — capsules can either come as soft gel capsules or dry capsules. Capsules tend to last longer than any other CBD products and are preferred by an older audience, especially compared to vaping CBD.
- CBD topicals — topicals are used externally to provide comfort to a localized area. Topicals tend to have an older audience as they generally have more aches and pains than younger people.
- Custom formulations — custom formulations give you complete control over creating your own hemp-derived CBD products. With our Private Label Program, you can control everything including unique ingredients, carriers, CBD concentrations, natural flavors, terpenes, bottling and packaging options, brand development, label design and more.
This list isn’t exhaustive and new CBD products are always on the rise. But these cover the most commonly used CBD products.
Your next big business decision is whether you want to sell your CBD products online, offline, or both. If you already have an existing brick-and-mortar store, then this decision is easier. But if you’re launching a new CBD brand from scratch, it tends to be easier to start online. And you can always open brick and mortar stores in the future.
The last thing you need to do when crafting your business plan and marketing strategy is defining your competitive advantage.
Will your CBD brand have superior products to other brands? Will your CBD brand be more transparent than other CBD brands? Or, will you offer a better buying experience than other CBD brands?
These are all questions you’ll need to answer so you can stand out in your market and attract the customers you want to do business with.
Once you’ve defined everything in this section, you can start to look for a CBD supplier.
Finding a CBD supplier
This is perhaps the most important step. You need to make sure you find a trustworthy supplier and understand their farming methods so you can verify that they follow the industry standards so your CBD products are both effective and legally compliant.
There are many white label and private label options available for those interested in selling their own CBD products.
(Not sure about the difference between white label and private label options? Click here to read our article about it.)
At GenCanna, we work closely with hemp farmers in Kentucky to grow CBD that’s compliant with international food safety standards.
And all GenCanna hemp-derived products are subject to stringent internal and 3rd-party compliance and quality testing measures. Our hemp-derived products have been certified by BRCGS (British Retail Consortium Global Standards), cGMP (Current Good Manufacturing Practices), FDA (U.S. Food and Drug Administration), U.S. Hemp Authority, and our own GPP (GenCanna Production Platform™) — which is a novel set of standards, processes, and best practices that delivers premium hemp-derived CBD products at scale.
And we offer both white label options as well as private label options. If you’re interested in learning how we could work together to bring your CBD brand to life, you can set up a call with our sales team here.