With the growing popularity of CBD oil and the newfound knowledge that is coming to light about its health benefits, you may be considering entering the industry yourself and starting a new business. It’d be of little surprise considering how useful CBD can really be. So, what is CBD? Also called Cannabidiol, it is the major non-psychotomimetic compound found in cannabis. (Frenguelli 2018) In simpler words, it’s the part of marijuana that doesn’t get you high. This is due to the lack of THC once it has been broken down.
If you’re planning on selling it, legality may be an issue depending on what state you’re in (listed at the bottom of this article), but CBD can also be made alternatively from hemp, which is legal in all 50 states. Although, it appears there’s more demand for the cannabis-derived version.
CBD can be used as an effective anti-inflammatory or an aid to memory function.
There are some much more serious implications that it can be used to treat as well, like: epilepsy, tobacco withdrawal, autism, malignant brain tumors (glioblastoma), schizophrenia, and many others.
Epilepsy is the biggest and most popular use for CBD. It is a neurological disorder that causes seizures, which can be hard for the person effected by it to manage in their everyday life. Cannabidiol can help by significantly reducing the frequency of the seizures. (The Lancet 2018) There is an FDA approved CBD called Epidiolex, that is derived from cannabis.
Patients who are insured pay up to $200 a month for it. Without insurance, close to $2,700. (Hemptoday 2018) These are very important aspects to be aware of when you’re deciding on the price you’re going to be asking customers for. Figure out how much it’s going to cost to make or buy it as well. With more demand created by consumers, comes more profit and growth for you. It’s also going to affect who you are marketing to.
Once you have decided that you want to go through with starting your business, start creating a plan and get the necessary paperwork in order. First, decide if you’re going to have a physical building where your business will be located or if it will be completely online, or both. Whether you have a location in the real world or not, a website is almost required in today’s era because most consumers will want to be able to access it from the convenience of their home and will be more likely to purchase your product. You will need to do your research on what area would be best and most cost-effective as a location for a building. It’s very important to set up several types of insurance so that if anything ever happens to your property, website, employees, etc., you’ll be able to recover from it. Consider acquiring health insurance, liability and umbrella (extra liability), worker’s compensation, life, and fidelity bond (covers losses caused by dishonest employees). (American Institute of CPA’s 1995) Be sure to get coverage on computers and other equipment you purchase for business purposes. And keep copies of all the paperwork in a safe place, just in case.
The next step would be to make a list of the staff positions you want/need to fill. Possible employees to hire would be: a store manager; cashiers; an accountant/book keeper to keep track of accounts payable, accounts receivable, inventory tracking, and order entry; someone to manage your website; and any staff needed for making your product, unless you intend to buy it from another source. Think about what specific responsibilities each person will have. it’s also a good idea to document regulations you wish to put into place, otherwise known as bylaws. It is crucial to make sure the needs of your employees are met, for legal reasons and because it’s the human thing to do. A bad reputation can take down a business as fast as anything else.
Multiple forms of paperwork need to be filled out and filed for legality and licensing purposes. In the event of sharing the business and profit with another person(s) or company, a partnership agreement will need to be fabricated and signed by all parties involved. In addition, you must file with the secretary of state for the certificate of incorporation. Otherwise your business won’t be recognized by the US. Lastly, use a SS-4 form to obtain a Federal Identification Number (EIN), a nine-digit number associated with your company for tax filing purposes. (American Institute of CPA’s 1995)
If you want to start earning profit quickly, it is essential to invest in the way your product is advertised. Buy ad space on other websites that are related to CBD like an online store for vaping supplies or a magazine about marijuana. Of course, before doing so, you’ll have to design a business logo or hire somebody to design it for you. Looking professional is a huge factor in the likelihood of a consumer actually buying from your store let alone even clicking on your advertisement. The cost you’re asking for will also play a factor in that. Not only design the logo, but also design the bottle label and packaging that the oil will go in when you ship it. Keep in mind that it’s possible to be cost-effective and have a nice-looking presentation; going over the top with spending isn’t necessary or smart.
In the following states, CBD made from marijuana is completely legal: Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, Vermont, and Washington.
Where it is legal, only with a doctor’s recommendation: Arizona, Arkansas, Connecticut, Delaware, Florida, Hawaii, Illinois, Louisiana, Maryland, Michigan, Minnesota, Montana, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, and West Virginia.
In some states, it is also legal, but limited-access laws are in place, making it harder to obtain CBD. So, there will be less demand for it. Those states are: Alabama, Georgia, Indiana, Iowa, Kentucky, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, Texas, Utah, Virginia, Wyoming, and Wisconsin.
It is COMPLETELY illegal in: Idaho, Kansas, Nebraska, and South Dakota. (Green Roads 2018)