2020 is well underway and there is no better time than now to get into the CBD industry. The more that customers learn about the health and wellness benefits of CBD, the more demand there is for quality products. Launching a successful CBD business takes proper planning and execution. Here is how to legally launch your CBD business in 2020.
Write A Business Plan
A business plan can be thought of as an actionable map that outlines the steps from beginning to success. It should include information about products and services, market research and customer analysis, funding sources, sales forecasts, and marketing strategy. A business plan is necessary when looking for lenders and investors for money as they want to see clear and detailed information to determine if the business is a worthy investment. Laying out all the steps required to launch a successful CBD business will show what costs to anticipate and how to budget.
Understand the Laws and Form a Legal Entity
It is paramount to have a sound understanding of state and federal laws surrounding the hemp and cannabis industries. The most important law to uphold is the state’s legal levels of THC content for CBD products. For example, the legal THC content can’t exceed 0.3 percent in states where marijuana isn’t legal. The best way to prevent being held liable in a lawsuit about products is to create a legal business entity. There are several formats for a business so it’s best to work with an accountant or lawyer who can explain tax and legal obligations and facilitate establishing the business.
McAllister Garfield is a full-service marijuana business attorney in Los Angeles pioneering legal strategies and services for the marijuana industry. Since 2009, McAllister Garfield has worked with medical and recreational dispensaries, grows, infused-product manufacturers, and testing labs. They also work with ancillary and related businesses such as lenders, investors, social media companies, consultants, vendors, and packaging companies.
Choose Products and Define the Brand
The more that CBD becomes popular and accepted mainstream, the more the product offering grows. Decide which products to start a CBD business with, then consider expanding inventory along the way. Carry popular CBD products to keep up with the competition, like gummies, all-purpose CBD oil, and topical creams. From there, choose niche products to supplement the inventory and always source the highest quality organic hemp.
Standing out among the countless amounts of CBD competition means defining a unique brand that embodies quality. When customers see the brand logo, they should recognize who it is and what is offered. Rising through the ranks of CBD companies means creating a specific brand that will appear in all marketing efforts.
Pachamama is an example of a unique and distinctive brand. They cultivate the nurturing ability of Mother Earth through the dedication to provide products that support health. The founders of Pachamama are so passionate about cultivating the highest-grade hemp extracts, like those in their CBD oil vape, that they have been awarded the Purity Award by The Clean Label Project. Their loyal customers know to expect the best possible products that promote health and wellness.
Open a Business Bank Account
Once a legal business entity has been formed and registered, use the EIN number to open a business bank account. Set up the bank account under the health and supplement product category and avoid red flags by not mentioning CBD. Banks are federally regulated so matters of business bank accounts within the marijuana industry can get tricky. It’s advisable to work with an accountant or lawyer to navigate the red tape.
Next, it’s time to obtain a CBD merchant account with the same EIN and bank account information. This can also be tricky and many merchant services will not process CBD-related transactions. Look for companies that accept CBD merchant processing and take the time to compare their fees and capabilities.