It’s been nearly impossible to ignore the rising interest in CBD over the past couple years. As part of the exciting “green rush” revolution here in America, entrepreneurs are cashing in on the promise of all-natural pain management and stress relief. CBD’s spotlight has not been without the shadow of criticism, though. Wholesome conservatives believe its origin in the devil’s lettuce places it on par with other illegal substances. Regardless of where you stand on the debate, the profit potential of starting a CBD business is growing like a weed!
So, What is CBD Exactly?
CBD is not pot. Although it inhabits the cannabinoid family with THC, it will not get you high or impair users in any way. In the hemp plant, THC is genetically dormant—making way for tremendous CBD production. As for benefits, most people use it to relieve anxiety, calm nerves, and reduce inflammation. There are also mumblings of its antipsychotic effects as well as promising results in quelling seizures and other movement disorders. Future applications for CBD include everything from treating autism to brain cancer, so the world can expect to be hearing a lot more about this exciting miracle oil for years to come.
The topic of CBD is still relatively new, so educating your audience is priority number one.
CBD Business Basics
What’s at the core of retail enterprise? Product. Let’s start there! First, you’ll need to find a supplier. Unless you happen to run a hemp farm in your backyard, you will likely be white-labeling products from the source. This essentially means they source the CBD oil, package it, and slap your label on the bottle. Of course there are some higher-tier distributors that will go the extra mile to make your product unique by offering an array of customization options. Some even allow partner companies to drop-ship or distribute from their facility—saving you the hassle and expense of managing physical inventory.
Types of CBD Products
Originally, CBD drops were a common mainstay for those seeking its medicinal advantages. Recently, there have been several innovations in methods for absorbing Cannabidiol oil—meaning plenty of possible SKU’s for your store.
- Oil Drops
- Soft Gel Capsules
- Topicals (Balms, Creams, Serums & Makeup)
- Vape Pens
- Bath Bombs
- Energy Shots
- Pet Treats
CBD Business by the Numbers
According to Forbes and BDS Analytics, the CBD Market could reach $20 billion by 2024. We’re talking serious money here, folks. Just for fun, we identified a similar product (30mL hemp extract drops) available from a handful of different brands. The average retail price per bottle was $135.60. That’s a healthy price point, but it gets even better. Most CBD companies offer customers the ability to subscribe to auto-shipping. Not only are the transactional margins impressive, but there is recurring income potential as well!
You can go the wholesale route and sell your CBD products to various pharmacies, dispensaries, and retail outlets. The truth is, it’s so easy and accessible to start your own CBD business these days, many of these stores have their own in-house brand. The real opportunity is selling direct to consumers online. As of today, Amazon and eBay are cool with letting sellers offer hemp oil products—so be sure to put some inventory on these platforms in addition to your own website.
When building your CBD website, it’s important to choose an e-commerce platform that accommodates all the technical features you want. Shopify, BigCommerce, and WooCommerce are the most popular options. They make it really easy to get up and running quickly. Before you commit to a CMS platform, do your homework on its supported payment processors. Due to the legal uncertainties surrounding hemp products in the U.S., several of the major providers and credit card companies have stepped away from allowing CBD vendors. For this reason, you may need to seek out a high-risk merchant, and will pay slightly more in fees to balance the risk. It’s a short-term headache with a big long-term upside!
Creating a CBD Brand
When you’re bottling and selling oil from a plant, it’s safe to say your product isn’t all that much different than your competitor’s. Success in the CBD business comes down to branding and marketing. What is your angle? Are you going to have some fun with it like Sunday Scaries, take a more scientific approach like Charlotte’s Web, or forge your own unique hook? As with most startups, you should strive to build a passionate community and create a loyal culture around your product. In order for that to happen, you need to convince people to place that first order.
This is where your brand comes in. The logo, colors, imagery, fonts, website, packaging, videos, and messaging all work together in symphony to attract potential customers through emotional and visual stimulation. Don’t let this critical step be an afterthought. If you are building a CBD brand, you need to allocate a significant portion of your energy into developing an identity that separates your products from the rest.
Luckily, we can help! Blipbrands is always adding new name ideas in the CBD category—giving you a head start on establishing yourself in this booming sector.
When you get around to starting your CBD business, I hope you will look beyond this article and seek legal guidance from an actual attorney. In the meantime, you can rest assured knowing CBD is legal to buy in all 50 states under federal law. Each state, however, has their own regulations and restrictions on selling, purchasing, and possessing hemp derivatives. The last thing you want after pouring your heart, soul, and savings into a new venture is having to shut down over a legal issue. Do your homework, remain current on legislation, abide delicately, and claim your piece of the green rush craze!