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How to Start a CBD Oil Business

A CBD oil business will sell and/or manufacture CBD oil for a variety of purposes. This may happen either online or in stores, though most people won’t open up a specific retail location selling CBD. Most businesses will sell the oil for general purposes (e.g., anxiety, chronic back pain, etc.), though some will concentrate purely on cosmetic uses, with others even blend CBD oil and coffee.

Learn how to start your own CBD Oil Business and whether it is the right fit for you.

Start a cbd oil business by following these 10 steps:

  1. Plan your CBD Oil Business
  2. Form your CBD Oil Business into a Legal Entity
  3. Register your CBD Oil Business for Taxes
  4. Open a Business Bank Account & Credit Card
  5. Set up Accounting for your CBD Oil Business
  6. Get the Necessary Permits & Licenses for your CBD Oil Business
  7. Get CBD Oil Business Insurance
  8. Define your CBD Oil Business Brand
  9. Create your CBD Oil Business Website
  10. Set up your Business Phone System

You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your cbd oil business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

Luckily we have done a lot of this research for you.

What are the costs involved in opening a cbd oil business?

If you grow your own hemp and turn it into CBD oil, then your costs to start will be low. You can begin selling your product online with little more than a website made for a few hundred bucks with Squarespace and commercial liability insurance in case a customer sues you after using your product. You can also consider partnering with an established farmer to grow their business and your own.

What are the ongoing expenses for a cbd oil business?

Owners need to account for the cost of farming, insurance, and staff salaries. They may also want to hire a lawyer to keep up on the rapidly changing laws.

Who is the target market?

Practically anyone can use this product. CBD oil is used to relieve anxiety, soften skin, and reduce chronic pain. Most famously, it’s given to kids who have severe seizures to reduce their frequency and severity. It can even be taken by people for general relaxation at any time. CBD oil is derived from cannabis, but it does not cause a psychoactive effect like THC will.

How does a cbd oil business make money?

CBD oil businesses will create their own profit margin for their products, based on the scope of their operation, quality of their product, and demand for CBD oil among their target demographic.

How much can you charge customers?

It’s not unusual to see CBD oil sold for $60 for just 30 mL. 100 mg in a 2 oz bottle of skin lotion can be sold for $85.

How much profit can a cbd oil business make?

CBD oil businesses can make a good deal of profit once their customer base is established. If you charge an average of $60 per product at a 50% mark-up, you’ll need to sell 200 products every month to make $6,000 in profit. This goal can be easier to meet than you may think given the exceptional demand.

How can you make your business more profitable?

CBD oil owners can branch out to different types of products to boost their profits. From skin care to make-up to tinctures to vaping to edibles, there are a lot of different options available.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our CBD Oil Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

  • Your state’s business records
  • Federal and state trademark records
  • Social media platforms .

It’s very important to secure your domain name before someone else does.

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STEP 2: Form a legal entity

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your cbd oil business is sued.

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

  • ZenBusiness ($39 + State Fees)
  • LegalZoom ($79 + State Fees)

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It’s really easy and free!

You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.

Small Business Taxes

Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).

You can learn more about small business taxes in these guides:

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business’s name (instead of yours), better interest rates, higher lines of credit, and more.

Open a business bank account
  • This separates your personal assets from your company’s assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.

Open net-30 accounts

When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term “net-30,” which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.

Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.

Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.

Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!

Get a business credit card
  • This helps you separate personal and business expenses by putting your business’ expenses all in one place.
  • It also builds your company’s credit history, which can be useful to raise money and investment later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

Federal Business Licensing Requirements

Although CBD oil does not produce psychoactive effects like the THC found in marijuana, the two products are associated closely enought that the production and sales of CBD are currently in a legal grey area. Before starting your CBD oil business, it is important that you make sure to read up on both state and federal laws regarding CBD products. This will help ensure your business functions smoothly and avoids legal trouble.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a CBD oil business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

For information about local licenses and permits:

  • Check with your town, city or county clerk’s office
  • Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources .
Certificate of Occupancy

A CBD oil business is generally run out of a place where the oil is manufactured. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.

  • If you plan to lease a location :
    • It is generally the landlord’s responsibility to obtain a CO.
    • Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a CBD oil business.
    • After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
    • You will be responsible for obtaining a valid CO from a local government authority.
    • Review all building codes and zoning requirements for your business’ location to ensure your CBD oil business will be in compliance and able to obtain a CO.

    STEP 7: Get business insurance

    Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

    There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

    Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers’ Compensation Coverage.

    Recommended: Learn what business insurance for your CBD Oil Business will cost.

    STEP 8: Define your brand

    Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

    Recommended: Get a logo using Truic’s free logo Generator no email or sign up required, or use a Premium Logo Maker.

    If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

    How to promote & market a cbd oil business

    CBD oil is popular enough that you’re going to have some stiff competition. Most people are going to be looking for CBD oil online — especially if they’re looking for the more concentrated, medicinal products. Paid online ads, organic blog content, and social media can help attract people to your product. If you’re selling general, lower-intensity sprays, then you can develop relationships with general health stores or even grocery stores to stock your products.

    How to keep customers coming back

    Customers are going to need to feel relief after taking your products. While research is few and far between, you can do your own analysis of which products are working for different demographics by asking for feedback. This can help you suggest the right product so that there’s less experimentation (and frustration) on the part of your customers.

    Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.

    STEP 9: Create your business website

    After defining your brand and creating your logo the next step is to create a website for your business.

    While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

    Here are the main reasons why you shouldn’t delay building your website:

    • All legitimate businesses have websites – full stop. The size or industry of your business does not matter when it comes to getting your business online.
    • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
    • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

    Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.

    Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.

    Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

    STEP 10: Set up your business phone system

    Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

    There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.

    Recommended Business Phone Service: Nextiva

    Nextiva is our top choice for small business phone numbers because of all the features it offers for small businesses and it’s fair pricing.

    Start A CBD Oil Business In Your State

    Select your state below for an in-depth guide on completing each of these steps in your home state.

    Is this Business Right For You?

    This business is great for people who have a genuine interest in how cannabis can be used to bring relief to users. Owners should understand the complexities of the plant and how different strains can help treat certain ailments.

    Want to know if you are cut out to be an entrepreneur?

    Take our Entrepreneurship Quiz to find out!

    What happens during a typical day at a cbd oil business?

    It’s rare there will be a ‘typical’ day in the CBD oil business because this business is so new and there are few established business models. An owner may be doing anything from managing inventory to dealing with new regulations to running lab reports for their product. Owners should also be devoting time on a regular basis to keep up with changing trends in their industry (as they can change extremely quickly.)

    What are some skills and experiences that will help you build a successful cbd oil business?

    People should have some experience with the cannabis market. Owners should understand the basic public demands as well as the public fears and residual stigma of cannabis. There’s a lot to learn about cannabis due to the variety of the product. Understanding the different terpenes and strains can make it easier for your company to stay ahead.

    What is the growth potential for a cbd oil business?

    Because of its versatility and rapid rise in popularity, CBD oil is predicted to hit $1 billion by 2020 in the US alone (some say even closer to $2 billion.)

    TRUiC’s YouTube Channel

    For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

    Take the Next Step

    Find a business mentor

    One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

    Having a support network in place to turn to during tough times is a major factor of success for new business owners.

    Learn from other business owners

    Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

    Resources to Help Women in Business

    There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

    • Funding
    • Events
    • Guides
    • Support

    If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

    What are some insider tips for jump starting a cbd oil business?

    Understanding the industry is going to be key to getting started. CBD oil is a legal gray area — no matter how you manufacture it. You’re far less likely to run into authorities if you extract your CBD from pure hemp instead of marijuana, but cannabis can be confusing to people who have no experience with it. This can lead to being taken off the shelves or being shut down until local authorities figure it out — which could be a while.

    Hemp and marijuana are both from the cannabis plant, but they’re used for very different purposes. CBD oil has enough legal implications that there hasn’t been a lot of official research on it. While this appears to be changing now that the FDA has recently approved a CBD oil drug, it’s unclear how quickly widespread acceptance will happen. In states like California and Washington, your pushback is likely to be low. But in states like Indiana and Kansas, you may have a very difficult time meeting the official regulations of the state.

    You should also be extremely honest with your customers whenever possible. Because there isn’t a lot of research on CBD oil, it’s impossible to really say that CBD oil can ‘cure’ anything. While the evidence may be extremely compelling, you want to present both sides of the story whenever possible. The good news is that side effects are extremely mild and it’s impossible to overdose on CBD oil.

    One good way to show people that your business is legitimate from right off the bat is to become Clean Green Certified. This certification is essentially the equivalent of the organic label in grocery stores. You’ll need to go through some rigorous testing in order to pass, but these tests help assure people that they’re getting pure CBD oil and not the synthetic, illegal products that may make them ill.

    How and when to build a team

    You don’t necessarily need to build a team right away if you’re growing the hemp yourself. However, if you’re partnering with other people, you should consider hiring someone to help you decipher the legal puzzles and marketing strategies of the CBD oil business.

    How to Sell CBD Online: Information and Tips on Selling CBD From Home

    The cannabis industry continues to legalize and explode before our eyes. And it didn’t take long for its more legal archetype, Cannabidiols (otherwise known as CBD), to become a hot commodity.

    You can find CBD products in nearly every large retailer these days, including Walgreens, CVS, Ulta, and even teen brands like American Eagle and Abercrombie & Fitch. But just as fast, it’s become a viable ecommerce solution for those who want to sell and buy it online.

    If you follow ecommerce product trends, you know that CBD is everywhere — for humans, for pets, in your drinks, in your chapstick. It seems as though there is CBD-infused everything.

    Of course, it’s not as simple as throwing up a website and watching the buyers flood in. If you decide to sell CBD at all — let alone online — you’ll face a complicated industry with complex legal and marketing challenges.

    Before you start selling CBD products online, you should know exactly what to expect and how to prepare. Read on to get the full rundown on how to navigate building a CBD income stream in today’s climate.

    Note: This article is solely for informational purposes and does not constitute legal advice.

    What is CBD?

    You may hear CBD being described as “cannabis oil but without THC,” and that’s close but not entirely accurate. CBD, or Cannabidiol if you’re using the scientific term, is an active component of Cannabis — a small, effective part of the larger whole.

    Cannabis is made up of different cannabinoids. Cannabidiol is one of them. According to users, this is the ingredient that helps alleviate an array of symptoms, including pain, anxiety, and even epileptic seizures.

    What helped CBD boom into its own segment of the larger cannabis market though is the fact that it doesn’t contain THC (tetrahydrocannabinol). THC is the ingredient in cannabis that causes the widely-known psychological effects: the euphoria, short-term memory loss, increase in appetite, paranoia, and more.

    THC is the ingredient that many governments around the world have fought to keep illegal, whereas CBD is the ingredient that simply acts as a natural medicine without any psychological effects.

    Because of this, CBD is ahead of the game in the cannabis industry in the sense that it’s more widely accepted and legalized — in most cases.

    The CBD market is booming

    The number one rule of going into business is “Go where the market is.” One clear way to tell that is by gauging where consumers are already spending their money.

    You might look at the explosive evolution that the CBD industry has undergone in the past couple of years and find yourself intimidated by market saturation and competition. Fret not — there are still plenty of pieces of the pie for everyone who wants to try and partake.

    Just how big is the opportunity, exactly?

    The CBD market is worth billions

    The CBD industry is projected to be worth $20 billion by 2024. To put this into perspective, ice cream was only worth $2.27 billion in 2018. CBD is well on its way to being a household item for frequent buyers who will come back again and again as long as you can fulfill the product.

    But it’s not that simple. What about the legalities of selling CBD products?

    New legal terms for CBD oil

    CBD has definitely undergone its share of legalization battles and still has some opposition, but there has been major progress along the way. The 2018 Farm Bill legalized hemp production across the US, which is great for sellers because CBD is produced from industrial hemp.

    The bill essentially states that as long as your CBD product has less than 0.3% THC in it, you’re free to sell it, with caution.

    Legality of selling CBD

    For obvious reasons, the legalization of CBD has been widely disputed across the board. As long as it’s a controversial topic, you’ll want to prescribe to your favorite news channels and set up alerts for updates to CBD laws. With that being said, a plethora of laws have been put in place that you need to be aware of, both federally and at the state-level.

    Federally

    In the United States, there aren’t any concerns at the moment other than making sure your products contain less than 0.3% THC. CBD is otherwise legal nationally. It is recommended that you stay aware of the state of legalization as laws can always be overturned.

    It’s worth noting that the FDA has stepped in on occasion to call out unapproved products that market false health claims.

    Statewide

    Statewide laws will of course vary by state. Some states allow marijuana-produced CBD, while others only allow industrial hemp-produced CBD. Your best bet is to simply sell the industrial hemp-sourced CBD, as it won’t have high THC levels and is accepted across the nation. Otherwise, you’ll want to get in touch with local representatives or research laws in your state to see what you’re allowed to sell.

    From that information, build a list of products that you know are legal for you to sell and stick with your regular inventory to avoid any legal mishaps.

    How to start selling CBD oil online

    Once you’ve dialed in your legal allowances, it’s time to start setting up shop. There is a simple game plan you can follow to get set up and start selling online. From there, you can start refining your product, marketing, and ecommerce fulfillment strategies to grow your business.

    1. Obtain licenses

    In order to sell CBD, you’ll need to get a couple of licenses. One is a business license. Usually, small businesses go for an LLC. Research your preference at your local government website. Registration usually costs about $100 in most cases.

    You’ll also want to get a resale license if you plan to purchase your product from wholesalers. Much like business licenses, resale licenses and permits are handled at the state-level, which can be handled differently state-to-state. Discover what your state requirements are to determine if you need a resale license and how to acquire one.

    2. Find a certified supplier

    You’ll want to find a reputable supplier that will sell you high-quality products (such as tinctures, oils, hemp products, and more) and is also certified to sell by the state or federally. They’ll also need to get regular tests performed by third-parties to make sure the quality is assured and you’re selling quality products. Many CBD companies have their own hemp farms.

    3. Build your website

    Now that you have the paperwork and selection process out of the way, it’s time to build your website. First, you need a domain name (or a “www.yoursitename.com” web address).

    One of the most popular platforms to buy domains from is GoDaddy.com. But you can just as easily get your domain name from most web building platforms. There’s no shortage of platforms out there that make it incredibly easy for you to build an ecommerce site.

    For example, BigCommerce offers full-featured solutions for merchants of all sizes, with no additional fees for selecting your own payment gateway.

    Be careful to cover the terms of service and community policy to make sure you’re advertising and selling your products within the boundaries set by the platform.

    You’ll need to find reliable credit card payment processing, which can be tricky for CBD products as the payment gateway landscape has been changing a lot in this industry.

    CBD is not currently approved by all payment processors (e.g., PayPal), so you’ll need to make sure you’re working with a company that can do this. Note: Credit card fees with CBD gateways may vary by merchant based on a risk assessment done by the processor.

    4. Market your CBD products

    Now that your website is live, it’s time to bring in the buyers. You might think the “build it and they will come” mantra rings true here. Sorry to say, that’s not the case.

    In a land where it’s difficult to market CBD using a lot of popular methods (as Facebook Ads, YouTube Ads, and other common ecommerce marketing channels ban these products from their advertising platforms), there are still two viable options that have the potential to bring in a lot of profit if you play your hand right.

    The first is SEO, or the art and science of getting Google to rank your site above others in search results to show potential buyers your website first. In order to succeed with SEO, you’ll want to get an SEO professional to audit your site. They can make sure that Google views things like your site speed, meta data, image optimization and other components favorably. These things help Google trust that your website is worthy to show visitors.

    You’ll also want to start a blog, master the skill of keyword research, and put out fresh content that captures the intent of what people are searching for. Make sure you’re targeting terms that bring in potential buyers and not just visitors looking for information on the topic.

    Once you start getting organic website visitors through your SEO efforts, you’ll want to start an email list and use your website to grow it. In exchange for an email address, you can offer discounts or even free informational PDFs and trainings on CBD.

    When visitors provide their email address for your freebies, they’re giving you permission to nurture the relationship and inform them of more promotions moving forward (e.g., having a sitewide sell for 4/20 or a Black Friday/Cyber Monday deal).

    You can also look elsewhere and try partnering with marketplaces like CBD Oils, Ganjapreneur, and Pot.com, or CBD-specific ad platforms like Traffic Roots.

    5. Fulfill and ship customer orders

    You’ll need a system for warehousing your CBD products and managing inventory over time. When you’re first getting started, this may be done in your home. After experiencing growth, you’ll want to expand into a fulfillment center by either signing a warehouse lease or outsourcing fulfillment.

    Just make sure your fulfillment technology syncs up well with your ecommerce platform, payment processor, and other software. For example, ShipBob is tech-enabled fulfillment company with warehouses across the US to help you spend less time worrying about packing and shipping orders and more time on growing your brand.

    “Our fulfillment is on autopilot. ShipBob saves us so much effort, and the opportunity cost savings has been substantial. ShipBob’s platform is easy to use and navigate, the interface is intuitive, and the analytics are very clearly laid out. Today, our health and wellness brand sells three CBD products in the United States.”

    Yannick Crespo, Co-Founder & President of Pot d’Huile

    Take CBD company Nature’s Ultra. Last year, they started to experience a surge in orders. They were managing CBD shipping and logistics themselves but didn’t understand just how massive and difficult retail fulfillment was. They were getting so deep into the logistics and supply chain side that they didn’t have time to focus on their core products.

    They knew they’d be doubling and then quickly tripling their order volume, so they wanted to get help on the front-end to ensure a long-term relationship with a lot of room for scalability. They searched for companies that could give them something similar to Amazon’s delivery capabilities for their website orders, so they partnered with ShipBob.

    “Now that we’re working with ShipBob, we can easily ship to all 50 US states with ease. We use ShipBob’s fulfillment centers in Dallas, Texas, Chicago, Illinois, and Bethlehem, Pennsylvania. They help us to maximize our shipping and ultimately our growth potential.”

    Andrew Hardy, COO of Nature’s Ultra

    Challenges of selling CBD online

    Once you get your CBD store up and running, you will likely face a new set of challenges as you grow. Here are a few considerations to help you break through the crowded space and set your business up for success.

    Standing out in the market

    In a saturated market, you must consider your competitors. Think through the following:

    • Which keywords are your competitors ranking for and how can you write better content to outrank them?
    • What kinds of products are they providing and how can you stand apart?
    • What can you do differently from your competition that your customers will love?

    Think through the entire customer experience to uncover where you can differentiate, whether that’s selling unique products, providing custom packaging or a branded insert, or even offering free 2-day shipping.

    Managing regulations

    As mentioned earlier, you’ll want to go through the proper state channels to figure out what your regulations are so you can abide by them. Your best bet is to take inventory of any regulations, rules, and restrictions, and create company policies around them to make sure you’re following them. With the industry continuing to evolve, be sure to stay updated on these regulations.

    As selling CBD becomes more widely accepted, you may eventually be able to sell internationally, ship to other countries, and build out an international shipping strategy. In the mean time, don’t ship products to destinations where they’re not allowed.

    Fulfilling orders

    Without the proper support and systems in place it can become really difficult to fulfill your orders especially as demand picks up. When you can no longer go at it by yourself, you’ll need to find a solution that will ensure you’re able to deliver the products your customers buy in a timely fashion.

    “We place considerable expectations and pressure on shipping so we can get close to what Amazon does. With ShipBob, 100% of our orders are going out via 2-day shipping. We see that people are far more likely to order and keep ordering from us when 2-Day Express Shipping Program is an option.”

    Andrew Hardy, COO of Nature’s Ultra

    Fulfillment options

    Ecommerce shipping can be very challenging and order fulfillment boils down to three common options. What works for one business may be cost-prohibitive or inefficient for another.

    In-house fulfillment

    There are plenty of CBD brands that fulfill orders by themselves. They keep inventory at home and run to the post office, or use local warehouse space to pack and ship each order by investing in the infrastructure and running operations. This option is often best when getting started or if order volume isn’t too much to handle. As your store grows, you need to scale seamlessly and find a more streamlined solution.

    Dropshipping

    Dropshipping is when a manufacturer handles both product procurement and shipping orders. All you do is market the product without touching inventory. This can work well for some products, but is often difficult for CBD oil because you have less control over quality, product selection, and speed of shipment.

    3PL (third-party logistics) solutions

    3PLs are a happy medium as you don’t have to purchase land or hire a team to pack boxes, but you still have control over selecting a manufacturer. The 3PL is the middleman that stores your inventory close to your end consumers, while helping you quickly and seamlessly get the products shipped out.

    “We were shipping a dozen orders per day, and now we ship hundreds per day. ShipBob has allowed us to scale up and become successful — we have gone from $70,000 in sales in 2018 to over $7 million in sales in 2019. When it comes to delivery, accuracy and timing are the most important to us, and ShipBob helps us execute on that.”

    Andrew Hardy, COO of Nature’s Ultra

    Conclusion

    Starting an online CBD business might have some legal and marketing challenges involved, but with the growth of the industry and continued legalization, now is the time to get in. Since it’s still a young industry, you can still get ahead of the curve.

    Already running a CBD store or anticipating a huge launch? Get in touch to learn how ShipBob can handle your CBD fulfillment so you can focus on your brand — not packing boxes . Request fulfillment pricing today.

    How to Become a CBD Oil Distributor

    Becoming your own CBD retailer is a feasible scenario. The market demand is there, as are the tools you’ll need to succeed. Here’s what to do.

    Ever dream of a career as a CBD oil distributor, and opening your own store?

    Why not? Commercially, cannabis is high as an elephants eye and there's money to be made in cannabidiol (CBD) industry that's expected to hit $20 billion in 2020 and $22 billion by 2024.

    The demand is high among the burgeoning number of users who have turned to CBD products for various health and wellness reasons, and against chemical-based bio-pills turned out by the big pharma companies.

    What's in it for a fledgling CBD oil distributor and what's the best path to cashing in on the CBD craze?

    Plenty, industry insiders say. But you have to know where to look and what specific steps to take if you're going to land on top of the heap as a CBD oil distributor.

    How to Become a CBD Oil Distributor in 7 Steps

    With all of that opportunity and wealth-creating opportunity at hand, how do you actually become a CBD operator?

    Like most small businesses that are just getting started, you need to get the basics right, and go from there. Take these steps to get going on your own CBD retail business:

    1. Create a Business Plan

    Any small business, especially one in a "wild West" industry like the CBD business, needs an action plan upfront.

    That means writing up your own business plan, which should focus on the following themes:

     - What is the cost? Financing is the number one issue for a new CBD retail business owner. Starting that business online will be less expensive, although you'll still need a quality distribution channel to get the right products to your customers.

    While figures will vary depending on location and whether you open a physical shop or an online shop, you'll need at least $5,000 up front to get up and running with your own CBD outlet.

    – Who are your customers? You'll also need a marketing plan to attract customers before you open up for business.

    Fortunately, CBD products cover a lot of ground, health and wellness-wise, so you can market your CBD oil products to a wider audience of consumers. You'll need a good, educational website where customers can peruse your product line and figure out what product works best for them. You'll also need to establish a solid social media presence, and get the word out on Facebook (FB) – Get Meta Platforms Inc. Class A Report , Instagram, Twitter (TWTR) – Get Twitter, Inc. Report , and LinkedIn (for business support.)

    Getting out and meeting your customers at local festivals, block parties, sidewalk vendor outings, and at special health and wellness events in your community is a must. Chances are that your best customers will be the people you meet in your own community.

    – Figure out how long will it take for you to make a profit. Like any small business, your CBD retailer will need to plan out your company's financial future, so you'll have a good idea how much money you'll need to keep the business afloat during its first year or so.

    That means engaging in some small business financial forecasting, using your budget, your recorded and estimated cash inflows and outflows, and your own financial picture to see how long your company can last as it gets on its feet.

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    Use a good small business digital financial package like Quicken, Norton Small Business, Wave, or Xero (XROLF) that specialize in tracking new small business financial performance, while offering the capability for estimating future revenues and expenses.

    2. Choose Your Business Name

    Selecting a name for your new cannabis business is a big deal. A good name sends customers a message that you're an expert in the CBD field, and you have the products and customer service they expect when doing business with you.

    By and large you want a name tied specifically to your industry, that sounds good when it's spoken aloud, and that conveys a unique benefit to your customer. Be specific and don't use initials (which typically don't stand out to customers.)

    Test your name on Google AdWords to see how it might play for keyword usage and make sure you're not using a name that's already in use. Check with GoDaddy (GDDY) – Get GoDaddy, Inc. Class A Report or other internet domain sites to make sure the coast is clear for your CBD company's new name.

    3. Get a Business Bank Account

    For tax purposes alone, it's not a good idea to merge your business and personal finances.

    Your bank or credit union will be happy to set up a business banking account for you. Make sure it has low fees, the ability to move money around, offers a business credit card, and even has access to a line of credit or personal loan attached, in the event you'll need the money.

    4. Pick a Shop

    Depending on your unique goals and needs, that means deciding to open a brick-and-mortar CDB store in your city or town, or rolling out an online CBD oil products site.

    The pros and cons are many. Just know that a brick-and-mortar store adds rental and upkeep costs that far supersede the creation and maintenance of a CBD oils sales site. Going online will also mean you have a larger audience for your wares.

    On the plus side, a physical store gives you direct engagement with repeat customers – people you'll get to know and build relationships, which is the cornerstone of any good small business.

    Of course, you can do both and open an online an offline CBD oil outlet, but that means extra work and extra cost. Again, check with business owners who've done both, and ask about their experiences opening their CBD businesses.

    5. Get Licensed

    While selling CBD oils is perfectly legal, and you won't need any special business licenses, you will need a standard business reseller's license, and that's mainly for selling CBD products online. Check with your state, city or town to see what, if any, other licenses you'll need to open your CBD oil retail business.

    6. Decide What Products to Sell

    Lastly, you're going to need a diverse array of CBD products to sell, even beyond selling CBD oils.

    Adding gummies, tinctures, and vaping products and accessories will give you more opportunities to earn revenues, and will also help you build a bigger and more diverse CBD clientele – which is the idea when you open your own CBD business.

    7. Partner With a CBD Distributor

    There are thousands of companies across the globe that wholesale cannabidiol products and treatments. Job one is to winnow those numbers down to choose the CBD company that best meets your distribution needs.

    When managing that distribution process for your store, outlet or online CBD business, keep these criteria in mind.

    – Make sure you're dealing with a legitimate company. While most CBD companies strive to deliver quality products and services, there are outfits that will cut corners, offer inferior products, and/or overcharge for their cannabidiols.

    One way to check and see if the products you're buying are high quality is to ensure the CBD matches up to its lab specifications.

    Make sure the company offers a legitimate third-party lab testing source that can provide you with product specifications to make sure all CBD products have been tested and surpass quality standards.

    – Get references. Don't do business with a CBD wholesaler who won't provide references. You'll want to hear from other cannabis product sellers who've worked with the distributor you're vetting, and can vouch for their quality product and dependability.

    The good news is that most cannabidiol sellers are happy to be in the business and are willing to help a new CBD outlet get on its feet.

    Getting good references for wholesalers is a good place to start. Check out industry organizations like the National Cannabis Industry Association (NCIA) and the National Hemp Association for guidance on finding good sources for distributor references.

    – Check logistics and customer service. Does a potential CBD distributor go out of its way to get you the product you need, when you need them? The distributor's website is a good place to get information on the company's business model.

    Customer care should be at the top of your "check-up" list, too. When vetting a CBD distributor's web site, check to see how prominent the customer service number, email, or online contact widget is on the site. If you don't see it on either the home page or landing page, that's a big red flag.

    When you're actually doing business with a CBD distributor and you have a problem, you'll need that problem resolved right away. Getting through to customer service will be a priority, so make sure that's a priority with the distributor, too.

    – Check your distributor's social media channels. When you land a good CBD distributor, you're landing a business partner. Any good business partner knows that its job goes beyond the basic delivery of products. It should also be helping you market its products to the world.

    That's where a good social media operation comes in handy.

    If your CBD distributor is highly active on Twitter, LinkedIn, Facebook , and Instagram, that's a great sign.

    A distributor who's out there on the digital stage educating and promoting its products – the ones you are selling in your store or outlet – means that you're working with a distributor who's passionate about the CBD industry and believes in its (and your) products.

    What Is a CBD Oil Distributor?

    A CBD oil distributor is primarily a seller, either on the retail or wholesale side, of cannabidiol products. For the purposes of this article, we're focusing on the retail side of the business, where you'll open your own CBD store or online sales site.

    Cannabidiol, more commonly known as CBD, is in the cannabinoid family, and is one of 100 strains of cannabis that is embedded in a cannabis plant. CBD, however, is not tetrahydrocannabinol (THC), the more sensually impactive ingredient found in a cannabis plant – it's the compound that gets users "high" when they consume cannabis orally.

    That difference puts you on the right side of the law in most states, as a CBD distributor. Unlike THC, CBD doesn't get users high psychoactively, but does offer health and wellness benefits for common maladies like anxiety, depression, diabetes, and cancer, among other medical issues.

    CBD is also becoming increasingly well known for alleviating pain associated with muscle and joint pain, inflammation, and migraine headaches.

    Why Would You Become a CBD Oil Distributor?

    Helping people better cope with their pain is a big attraction for CBD oil distributors – right up there with making a good living financially and in being at the forefront of one of the most intriguing health and wellness revolutions that's come along in decades.

    Yet there are other reasons for selling CBD oil to the public and to cannabis product providers.

    Everyone is a customer. CBD, like everyday commodities like soap and cereal, appeals to a wide spectrum of the U.S. public. There are cannabidiol products for grade schoolers and there are products for geriatrics, and for all demographics in between.

    For four-legged friends, too. Cannabidiol products go beyond the human realm, too. There is no shortage of products, for example, for pets, as well. It's rare to get into a livelihood where you can sell your product to just about anyone on two legs or four legs, but that's the opportunity that comes with a career in CBD oil distribution.

    You can market your CBD products for wellness use – not just illnesses. More and more, cannabidiol products are being marketed as a healthy lifestyle choice, not just as an intriguing new treatment for anxiety, inflammation or depression. That opens up whole new avenues of sales and distribution channels for your business, allowing you to help more people earn a more robust income as a CBD oil distributor.

    People will pay for your CBD products. While many CBD products, like gummies or vapables cost $10 to $20 or so, many cost way more at the counter – as much as $150 for products like Pure Kana (1,000 MG) or $100 for Hemp Bombs, a popular CBD product.

    While the lengthy extraction process does push CBD prices up, margins are high due to high demand and the fact that CBD products are still in their infancy, and pricing stability really hasn't occurred yet.

    The CBD market is expanding. As the year-to-year growth rates for cannabidiols continue to grow (to an estimated $22 billion by 2024), there is a remarkable shortage of Amazon-like industry behemoths who control the cannabis industry. In that regard, there is plenty of room for business growth, and thousands of retailers who'll buy your products.

    The Takeaway on Opening Your Own CBD Oil Retail Outlet

    It's a wide open market for CBD products in the U.S. and abroad, with new cannabis companies opening every day.

    That's why it's important to get going now on your new CBD retail business, and to figure out what your cannabis company brings to the table, and what separates it from the pack.

    The money and the opportunity to run your own show as a CBD business are right there in front of you – it's up to you get the ball rolling and start your own CBD oil empire – one droplet at a time.

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