The CBD industry is truly unique, offering entrepreneurs an opportunity to work with innovate products that can be targeted towards numerous different demographics. Starting a CBD company is a great way to work in the cannabis industry, providing cannabinoid therapy for members of your community without the extensive licensing required to work with marijuana. The CBD industry also isn’t limited to certain states with medical or recreational marijuana laws, providing a more flexible opportunity to get involved. When it comes to starting a CBD company, here are the basics you’ll need to cover.
The Basics for Starting a CBD Company
The first step for starting a CBD company is the same as starting any other small business: register your company. Having a registered business name minimized your personal liabilities as well as taxes. If you’re planning on selling CBD products from other companies either solely or in addition to your own, some CBD wholesalers may require a resale license. We recommend contacting the brands you’re interested in carrying to see if they require this licensing. For those interested in starting a brick-and-mortar store in addition to your eCommerce website, you may want to seek professional legal counsel or conduct research on your local municipality. In addition to registering your business, you’ll need to apply for an EIN and have a good understanding of al the local, state, and federal laws that dictate business regulations.
Since no special licensing is required for starting a CBD company, you’ll need to follow any small business start-up guidelines. Once you’ve obtained proper business licensing, finding a location for your store, a website developer for your eCommerce site, and deciding on your product line are your next steps.
Conceiving Your CBD Product Line
There are plenty of options to choose from when you’re conceiving your CBD product line:
- In-House Product Formulation: If you have your own CBD product ideas, you may want to formulate them in-house. Once you’ve finalized your product formulas, you can either choose to invest in your own manufacturing facility so that you have control over this process or outsource to either a CBD manufacturer or other manufacturing service. You can purchase bulk CBD for your own product formulation purposes from CBD manufacturers. We offer every form of CBD available for bulk purchase.
- Custom Formulation Service: You may have some great ideas for CBD products but need some outside expertise for formulating. There are custom formulation service CBD companies that can extend their expertise and help you achieve that perfect product formula. Hemp Depot has the nation’s leading scientists and formulators and is happy to work with you to create any CBD product.
- White Label or Private Label CBD: Many CBD companies offer white label or private label programs for their products. This is a great way to put your brand on a proven successful CBD product. We have three incredible brands with the highest-quality CBD products all available for white labeling.
- Wholesale CBD Products: Wholesale options are widely available from numerous established CBD companies. This is a great way to carry multiple CBD lines in order to target different demographics. We’re proud to have three CBD brands available for wholesale.
Marketing Strategy for Your CBD Company
As with any company, marketing strategy is crucial. Especially in the CBD industry with so many different competing startups, it is important to find your target demographic and really creating a dynamic marketing strategy. The first step is creating branding and marketing collateral like your company logo and brand colors. You can either choose to do this yourself or hire a professional graphic designer. For those that don’t have experience with website creation, it may be a good idea to find a web development company to create your website along with your logo and other collateral. Starting your company strong with a defined marketing strategy can help you better budget your marketing while giving yourself a more competitive edge.
CBD Merchant Processing and Bank Account
Once you’ve got all the basics in order, you’ll need to find a merchant processor along with a special business bank account. CBD companies are still seen as high-risk by many merchant processors. There are high-risk processors that handle CBD transactions but we don’t recommend these options due to failed transaction rate and other disadvantages. We recommend Square for merchant processing. They are currently offering an invite-only program but we are happy to introduce you in order to start your application process. You’ll also need a business bank account. Currently, federal banks are not offering business accounts to CBD companies. You’ll need to find a local branch that offers this service. If you’re located in Colorado, we’re happy to recommend local banks that are currently accepting CBD companies.
Learn More About Starting a CBD Company
Hemp Depot is proud to share all the leading tips on starting a CBD company. We’ve worked with countless startups and small businesses and are happy to provide the support you need to get your CBD company started. We offer turn-key custom formulation services, white label and private label programs, as well as incredible wholesale opportunities. For more information regarding how to start a CBD company, please contact us!