How To Start A CBD Business in 5 Easy Steps

Wondering how to start a CBD business? Then you’ve come to the right place.

With the legalization of industrial hemp from the passing of the 2018 Farm Bill, the CBD and Hemp industry has seen incredible growth and is expected to become a multi-billion dollar industry within the next few years.

If you’ve been thinking about getting into the CBD/Hemp business, there’s no better time than now. Here are five helpful steps on how to start a CBD business.

1) Get Licenses/Business Documents

Starting a business in the CBD/Hemp industry is much different than any other industry. That’s because not only are you dealing with high-risk products with grey areas in legality, but you’re also providing consumable products for people to ingest (in most cases). This means that it is absolutely necessary to protect yourself right out the gate.

Acquire all the necessary licenses and business documents, and make sure that you are following the proper procedure to do business legally in your state, as all states have different laws regarding the sale of hemp-derived products.

2) Get Professional Legal Services

As mentioned before, protecting yourself out the gate is incredibly important. That’s why we recommend hiring professionals who are up-to-date with the latest regulations and can provide advice on staying compliant and protected.

The landscape of the industry is always changing, and what’s legal today may be illegal tomorrow, so it’s crucial to stay diligent and make sure you are keeping up with news that’s relevant to your business.

Aside from hiring legal professionals, it’s also a good idea to get product liability insurance. As most CBD brands deal with products that people can consume, putting safeguards in place to protect your business and assets is a necessary step.

3) Source Your Products/Find A Manufacturer

Once you’ve set up the foundation of your business with plenty of protection, it’s time to begin creating your brand and products. Finding the right supplier can be daunting, as there are many things you’ll need to know, including what type of product you want to sell, the ingredients, the cannabinoid levels, the type of CBD, and more. You’ll want to identify exactly what type of CBD product you want to sell and who to sell it to.

That’s where we come in. VCM CBD specializes in taking care of all the steps in the supply chain, from seed to shelf, so you don’t have to worry about complicated formulations and quality control. We’ll handle it for you.

4) Obtain Payment Processing/Merchant Services

Accepting payments for your CBD brand is not as easy as it seems. Due to the fact that hemp-derived products are considered high risk, many banks and processors shy away from providing services to CBD brands.

A common mistake most CBD business owners make is attempting to sign up with a quick online payments service such as PayPal or Stripe. We urge you not to do this. PayPal and Stripe both do not allow the sale of CBD products, and will ban your account, making it harder for you to obtain processing in the future.

Find a reputable payment processor that accepts high-risk merchants. The vetting process may be stricter and require you to provide lots of documentation (licenses, lab reports, bank statements, etc), but being onboarded properly means that there’s less of a chance of running into issues in the future.

5) Compliant E-Commerce Website

Last but not least, having a website to sell your CBD products and represent your brand is an obvious but important step. However, it’s not as simple as you think. Importantly, your website must comply with FDA standards.

Compliance is a complicated topic that varies from case to case. But to make things easy, we’ve outlined a few helpful tips to stay compliant:

(This is not legal advice, consult a legal professional to ensure your website is compliant.)

• Have an FDA Disclaimer on every page of your website. We recommend the footer area. The message should be along the lines of:

“These statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure, or prevent any disease.”

• Don’t make any health claims regarding diseases. It’s particularly important not to mention any names of diseases or even symptoms of diseases.

• Know the difference between your products and how you can market them. For example, topicals and tinctures are very different in the claims you can make, as an ingestible product falls within FDA jurisdiction, and topicals do not.

Final Thoughts on How to Start a CBD Business

By implementing these five important and necessary steps, you’re well on your way to starting your own CBD brand and building the business of your dreams!

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