How to start a Cannabidiol (CBD) Business?

Starting a CBD business is like establishing any other company. You need to conduct market research, get as much information about the product as you can. Write a business plan after the investigation, raise funds, and jump through all the usual hoops. Although the above similarities exist, a CBD business poses some unique challenges. These challenges need you to think carefully to ensure success.  

Besides following the steps in ordinary business, you need to consider the following:

  1. Develop an Effective Information System

All states in the US accept CBD as a supplement used to help manage a variety of conditions. Although it is now legal, CBD’s association with marijuana is a turn-off to some people. People who don’t understand it are not willing to consider its use even when they need the relief it offers. Informing potential customers on the benefits of CBD and its non-psychoactive qualities will serve you well.

Showing the difference between Tetrahydrocannabinol (THC) and cannabidiol is an excellent place to start. THC is the active ingredient in marijuana, and it has psychoactive effects. Cannabidiol (CBD), on the other hand, is not psychoactive.

It might be helpful to let your customers know that most of the CBD oil in the market doesn’t come from marijuana; it comes from hemp. Hemp is legal throughout the United States, and it contains no THC. This piece of information should help ease the fears of people who are wary of encountering recreational marijuana as they use CBD.

You should put in place strategies to provide this education at the beginning of the business. The approach will help you open up the market, which is still furrow.

  1. Research, Understand and Fulfil Your Legal Obligations

The FDA is still formulating many of the regulations on the sale and use of CBD. Local authorities and governments, on their part, are taking the cue to create rules for running associated businesses. Failure to follow the rules will put your business and yourself at significant risk with the law. 

The following are some of the development in this industry in as far as regulation is concerned.

  1. The Farm Bill of 2018 made hemp extract legal throughout the country.
  2. The FDA is still working to verify whether CBD has health benefits for the user. The fact that the verification process is not complete means that, you can’t tout the health benefits of CBD as a selling point. You can only sell it as a supplement. This restriction is one of the biggest hurdles for your CBD business. 
  3. If you intend to infuse foods and beverages with CBD you need to know that FDA recently cracked down on such infusions. The FDA crackdown is because being food, CBD infused beverages, and snacks fall under FDA’s jurisdictions. You may, thus, want to keep off the foods and drinks until FDA issues regulations on how the industry should handle them.
  4. In 2017, the FDA approved the use of Epidiolex, a pharmaceutical drug that is used for the treatment of epilepsy. This drug’s main ingredient is CBD. Approval of Epidiolex means that using CBD, especially on food and beverages, without the consent of the FDA is illegal. 

As an entrepreneur, you need to maintain a keen interest in developments in the regulatory environment. The grey regulatory framework will increasingly gain color, and you will be safe if you always ensure you are on the right side on the changing laws. 

  1. Market Your Products Appropriately

As earlier observed, the law doesn’t allow you to tout the health benefits of CBD oil when selling it. You can only market the oil as a supplement. Opportunities to advertise your CBD oil products are still relatively few. Established online platforms such as Alibaba, Amazon, and social media platforms don’t allow the listing of CBD. 

Set up your e-commerce website and sell your products there. You can also use online content on friendly sites to market your business. Further, you can trade more by opening a brick and mortar store from which people can pick up their purchases. A brick and mortar establishment affords you a base from which you can sensitize the community on the benefits of CBD oil.

Other Challenges

Like every other fledgling industry, CBD business has to deal with many different challenges. Challenges in this industry are significant than in other sectors for its perceived association with an illegal drug and the unclear regulations. These problems have spilled over to daily business processes such as banking, insurance, and payment processes, as many service providers adopt a wait-and-see attitude.


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