How to Make Money as a CBD Brand – The 2018 Farm Bill opened the floodgates of a now-thriving CBD industry. Notably, this new commercial legislation had many eager entrepreneurs seeing green. Unfortunately, over these last few years, we’ve witnessed many business owners struggle to make money as a CBD brand. But that doesn’t mean the industry is over-saturated or brands can’t compete. It just means they don’t all know how to make money as a CBD brand.
Today, we’ll discuss eight tricks brands can employ to help make money in the ever-growing hemp space. But first, let’s talk about why so many CBD brands struggle to turn a profit in the first place.
Why So Many CBD Brands Struggle to Turn a Profit
We’ve been active hemp industry participants longer than most. In fact, one of our founders, Will Brownlow, began farming cannabinoid hemp in 2016 through the USDA’s pilot CBD research program! In that time, we’ve experienced numerous ups and downs, jumped through countless regulatory hurdles, and witnessed the successes (and failures) of many industry peers. Though countless variables can contribute to a brand’s success versus failure, we’ve found the following issues to be most problematic for hemp brands.
Though hemp and all of its derivatives are federally legal and commercially viable, banks and other financial institutions are still reluctant to manage hemp accounts. As such, many CBD brands struggle to find financing or secure reliable payment processing. Those that do find appropriate banking solutions often pay higher fees as a “high liability” entity. Fortunately, CBD banking solutions are evolving thanks to the House’s recent passing of the SAFE Banking Act.
The FDA removed CBD from the Controlled Substance List but did not remove THC. However, many hemp-based products contain both CBD and THC (albeit in very low amounts), which puts CBD products in a sort of legal limbo. On the one hand, hemp products are commercially legal, but only if they follow specific protocols outlined by the USDA and local regulatory agencies (which vary by jurisdiction). This makes regulatory compliance especially challenging for hemp brands who must ensure they meet the legal criteria established within each distribution area.
There are countless hemp industry players all vying for consumer attention and their exchange of the all-mighty dollar. This has created a lot of noise in the industry as brands try to position themselves against the competition. Fortunately, there are still many ways brands can position themselves as hemp authorities without having to cut corners or make unfounded promises about their products.
8 Tips to Help You Make Money as a CBD Brand
It’s true that the hemp industry faces challenges unlike most. Fortunately, brands with strategic business plans can still experience hemp industry success; they just have to know how to go about it! Here are eight tips to help make money as a CBD brand.
Differentiate Your Brand
The first step to making money as a CBD brand is understanding how your brand, product, or viewpoint differs from the rest. Carefully consider how you will differentiate your brand, including what products you will sell, who you will sell them to, and how you will market them to your audience.
Educate, Don’t Sell
Shoppers are more likely to buy from brands they trust, which is why education is so important! Lean into educational tools on top of product sales to highlight your compassion for your shoppers and expertise within your industry. Next, optimize your virtual education tools with keywords to help attract your target audience.
Understand Your Target Audience
Before you can attract your target audience, you must understand who they are. You can do this by developing buyer personas that represent each of your most likely target demographics. Try not to cast too wide of a net here, which can make it harder to differentiate your brand and attract buyers ready to purchase.
Choose Products (and Product Providers) Carefully
Tinctures are continually the top-selling CBD product on the market – which means that everyone is selling them! As such, the best way to make money selling CBD is not to sell the same product as everyone else (at least not exclusively) but rather to offer various unique and trending products most likely to appeal to your audience. For example, men’s health brands might sell sports patches or alt cannabinoid-infused candies, whereas female-focused brands can sell facial serum or menstrual patches.
Utilize Multiple Connection Points
Everyone has different research habits and communication preferences. Some people prefer to communicate by phone, while others prefer email, social media, or internet search. As such, the best way to reach a large audience is to utilize multiple communication channels, sharing the type of information your target audience finds most useful in each. For example, you might publish informative, keyword-rich content on your website, share beautiful product photography on Instagram, send promotional highlights via email, and engage in direct outreach by phone. The point is the more places you can connect with a person, the more likely they will think of you when they need you.
Build a Mailing List (And Use It)
As mentioned, everyone’s preferred communication channel differs, so it’s wise to market across multiple platforms. However, there is one channel that doesn’t differ much between demographics – email! In fact, studies suggest that almost 99 percent of email users check their emails daily, making email one of the most widely preferred marketing channels across industries. So start building your mailing list now (and thank subscribers for joining as soon as they do).
Track Multiple Data Points and Adjust as Needed
As your business evolves, you’ll gain access to multiple data points to help you determine your trajectory. Note how your followers engage with your pages, how website visitors find and click through your site, which promotions are most effective, and which channels bring in the most business. Tracking this information can help you determine which marketing strategies to try, which hemp products to sell, and which direction your CBD brand should grow.
Pivot When Necessary
When it comes down to it, building a brand is hard. Knowing how to make money as a CBD brand (and pulling it off) is harder. As such, remember that it’s okay to pivot from your original vision towards something with more earning potential. This is not to tell you to give up on your dream, of course. Rather, it’s to remind you to watch the market and evolve alongside it. Your brand can be amazing if you can shape it into its full potential.
How to Make Money as a CBD Brand: Final Thoughts
VCM is more than a CBD product supplier. We are your hemp industry partners dedicated to ensuring the best products and outsourcing experience every time. Our product line includes more than 50 popular and unique cannabinoid items, thus giving you massive potential within your highly-targeted niche.
Contact us to discuss your hemp product needs or to learn more ways to make money as a CBD brand. You can also join our newsletter and follow us on social media for hemp news, product updates, and more.
Abby is a freelance cannabis writer and Founder of Cannabis Content, a marketplace and training platform designed to connect cannabis creatives with businesses that need their services. Learn more at CannabisContent.net