As the CBD market continues to grow, many folks have become interested in getting involved or starting a CBD home business.
While the CBD industry indeed presents a lot of opportunities, there are also many things one must consider before starting a CBD business.
In this guide, we will discuss 5 things people MUST know before starting a CBD business.
1. Industry Laws and Regulations
While hemp-derived CBD was federally legalized under the 2018 Farm Bill, there are still many legal complications business owners face due to CBD’s close relationship with the recreational cannabis industry. Because of this, it is crucial for business owners to fully understand the current laws and regulations of the industry. Before you start a CBD business, it is strongly recommended that you consult with a lawyer who is experienced in the space.
2. Payment Processing Issues
If you are getting into the CBD business, you may have difficulty finding a reliable payment processor to work with.
Since CBD is so closely related to the recreational cannabis industry, most payment processors consider the business operating in the industry to be “high risk.”
While the situation is definitely improving, and more payment processing companies are now accepting applications from CBD companies, it is still an important factor to consider before starting a CBD business.
If you cannot find a reliable payment processor, your company will be unable to accept credit card payments online or possibly even in person. That said, before starting a CBD business, it is absolutely crucial that you secure a relationship with a trusted payment processing company.
3. Lab Testing Standards
1 thing which you’re likely to have to find out about is laboratory testing. Consumers wish to guarantee they’re getting great products, and they are likely to do so by not reading reports and reviews on your merchandise but by assessing lab results.
While some companies perform lab analysis testing in-house, it’s important to get your products tested by a third-party laboratory.
When it comes to evaluating lab testing results it’s important that you understand the following:
- Cannabinoid Potency
- Terpenoid Potency
- Microbial Analysis
- Heavy Metals Analysis
- Residual Solvents
4. How to Determine Product Quality
As with products of any industry, quality is very important. As such, you should understand how to properly evaluate the quality of CBD products. In order to do so, consider the following:
- Manufacturing Standards = Cheaper brands are more likely to use riskier, cheaper extraction methods such as those using butane or propane. When search for a company to source from, look for companies that use the highest level of manufacturing standards such as the CBDpure company
- Hemp Source – Try to get CBD extracted from organic, pesticide-free hemp that’s grown in areas with low pollution and rich soil.
- Lab Testing – As mentioned above, the best way to get a conclusive understanding of many different aspects of a CBD product is to look at third-party test results.
5. Large Upfront Investment
When starting a business, it is usually necessary to invest startup funds into the business to get it off the ground.
Before you decide to start a CBD business, it’s important to understand that CBD products are not cheap. Because of this, starting a CBD business will typically require a large upfront investment.