CBD products have flooded the market in the US since the legalisation of CBD from industrial hemp. This has indeed gained interest of a lot of people who just don’t want the cure but also want to dive in to the business of CBD & get some income. The field is fresh with lesser competitors but the market is seeing an addition of new brands which gives us an idea that the situation of less competitors will not be something to talk about for long. Thus, people looking forward to enter the CBD business often ask – how to become a CBD Distributor?
KNOWING THE DIFFERENCE BETWEEN HEMP & MARIJUANA
Firstly it is essential to know the difference between hemp & marijuana before stepping out & looking to make a business with CBD distributorship. This is not just because of the basic thing that you’re going to make a business of & hence should be knowing about but also the legal rules which make it all the more important to know the difference between Hemp & Marijuana.
For basics, hemp or industrial hemp belongs to the Cannabis Sativa family while marijuana (referred to as cannabis too) might belong to either of the Cannabis sativa or Cannabis Indica family. Since both of these plants are a part of the cannabis family, they’ll have many similarities around. But being from different zones of the family, they will also come with features that are a lot different.
The difference also lies in the anatomy of both plants. While hemp plants contain skinny leaves which are more concentrated towards the top & grow tall, marijuana or cannabis plant grows short & bushy with broader leaves.
The major difference lies in the composition. This is what is the most important point which one must know before selling CBD products whether you want to just sell it or manufacture & sell it. Hemp contains upto 0.3% THC or tetrahydrocannabinol (responsible for causing a high after consumption of cannabis & related products) while marijuana carries larger content of THC. The purpose of usage varies for both as well where hemp can be & is harnessed for industrial benefits like making biofuel, cement, paper, ropes, etc, & medicinal ones while marijuana is used majorly for recreational & medicinal purposes.
KNOW ABOUT CBD & ITS PRODUCTS – TYPES OF CBD PRODUCTS
There are various CBD products available in the market. It is hence necessary to have a knowledge of all from inside out since inquiries will be many based on the requirements of the customers & as a distributor, you must be knowing which is the best for them. The types of CBD products are listed as below:
- CBD OIL
Goes without saying that this is the first one in the line of CBD products & hence is the most popular form of CBD product. This is what makes it widely used owing to its popularity till date. CBD infused cooking oils are also becoming popular these days.Dosage – Orally as drops directly or in water, tea,coffee, juice, etc. CBD oil is either taken as drops directly or mixed with tea, coffee, juice, etc. It contains CBD mixed with MCT oil usually or olive oil & hence is available as CBD oil. CBD rich cooking oil is also found in the market.
- CBD Tincture
Being a tincture it contains CBD mixed in alcohol. Also other carriers like vegetable glycerine or apple cider vinegar.
Dosage – Sublingually under the tongue. It can also be taken by mixing in water.
- CBD Capsules / Pills
CBD oil or gel is put into capsules & then it’s taken orally. These days, the most recent development is water soluble capsules which dissolve quickly ensuring quicker release of CBD into the bloodstream.Dosage – Orally as directed by the physician.
- CBD Sprays / Spritzers
Sprays & Spritzers have minimum CBD content. CBD oil is put in the can in pressurized form.Dosage – Oral, sublingual dosage or topical dosage.
- CBD Edibles
These come in the form of gummies, cookies, brownies, etc infused with CBD extracts. This is a more tasteful method for those who prefer medication without bad taste.
Dosage – Orally as directed by the physician.
- Isolates, Wax & Vapes
These can be inhaled as smoke. Vape cartridges are the most popular of these three & are available as e-cigarette pens too. Refills are available in the market as well which can be put into the cartridge.Dosage – Inhalation
- Balms, Lotions, Soaps, Shampoos
Balms, llotions, soaps, balms, shampoos, salves, etc are also available with CBD extract mixed in the product. It is for localised zone troubles like pain killing & anti-inflammatory properties of skin issues.
Dosage – Topical on the site of problem like pain, acne, etc.
GET TO KNOW THEIR DOSAGE
Whether you manufacture your own CBD product or order it from other manufacturers to add your label on readymade products from fixed suppliers, it is necessary to know the dosage too since it will go on the cans, bottles, wrappers,boxes, etc. also, you must know if it is made from full spectrum, broad spectrum or CBD isolate. This is because this will determine the purity of your product as well as enable customers to buy the right product for themselves. This is also a method to grab customers’ trust by labeling what you are selling & making things genuine.
For dosage, it must always be mentioned to take on the advice of a knowledgeable person. Giving an approximate idea on each serving will also help. Many brands also mention an average dose based on the weight & age group of customers. This can be adapted in the products where it is possible.
It is true that different people will have different CBD dosage but a basic standard finding & mention makes things easy & professional looking. Also, since the field is new so people often trust brands with the usage more than physician. Hence, at the first point of interaction, the more easy you make for the person, more are the chances to buy your product.
THIRD PARTY LAB TESTING
Since CBD was an illegal thing & it is a manufactured thing so user aren’t sure whether they are getting the CBD product that they are paying for. Also, it is necessary to provide the proof that not only the products have what has been promised from but also either is free from THC or have THC within the legal limits. Keeping it on the website as well as having copies of reports of the product from multiple labs adds authenticity to the claims.
It is all the more necessary to know from a manufacturer perspective as many manufacturers don’t cultivate their own hemp but purchase it from the farmers. It is hence necessary to cross check since whether the hemp’s quality & composition maintain the standards set by the Farm Bill is a necessary thing to be done before letting the product lose in the market. As a distributor who doesn’t manufacture the product but sells it from different vendors under the name of his brand, all products must be tested first & then put forward in the market. Regular testing twice or thrice a year from a third party lab ensure good quality check & brand maintenance.
Apart from this, many companies add different products to add to the entourage effect of the product. Under such cases, the substance added may be something from which one develops an allergy & hence informing about presence of any such things will be a plus for the brand more than a plus for the buyer.
To add authenticity to the purity claims, one can, rather should get a Clean Green Certification as well. This Certificate will ensure the user that they are getting organic CBD product which contains natural CBD product & not synthetically prepared CBD product.
TARGETING THE AUDIENCE & THE MARKET
The first thing to know is to chalk out your business plans. Since you have already chosen your product, the next step will be to choose the target audience to cater to. CBD firstly is sold a food supplement since it hasn’t yet caged out of the Schedule 1 list of drugs. Thus, it becomes more important to define the target since there aren’t any specific standards set. As a brand, it will be your responsibility to figure things out & do business.
The various factors that need to be taken care of are as under:
- IDENTIFY THE MARKET
Each businessman operates in a given area be it local, national or international. Choosing the area of business is most important as it helps to identify the market. Identifying the market includes finding out the geographical area, number of buyers, sellers & resellers. This in turn enables to have the pulse of the market as well as the buyers. Identifying the market also includes finding out what’s missing in the market what’s in abundance. The idea on location of the market enables you to work on the transportation costs, cargo management, delivery time needed, etc as it will be demand-supply based market
- SELECT THE AUDIENCE
Having decided upon the market to do business, the next step is to know about the end target – your actual buyers who’ll use the product. This includes a good insight into the age, usage patterns, education levels, marital status, income groups, spending habits, etc.
- COMPETITOR ANALYSIS
The way the CBD business is growing, there are less chances of having too many competitors for the time being but very soon the market will be flooded with many brands. In such cases, in order to establish your own brand as one of the best ones, you need to do a competitor analysis exercise & study the way they do business. Whether they introduce offers or not, are they giving any giveaways or offers from time to time or not, what are the main CBD products they sell, whether they have an online presence or not are the factors which help a great deal with framing your own business in a better way. This step is a homework which will determine the course of your marketing & channelising of your products.
When you know about the market & the buyers & the various factors including licensing, taxes, transportation costs, order estimates, competitor analysis, etc. you can finally proceed with the pricing of the products. A good idea on the above points always helps with the pricing since there will not be just profit but losses too that will need a cushion of saving you from big losses.
- ONLINE PRESENCE
The world has become a global village because of digitisation & everything is going online. Thus, having an online presence through website, social media promotion, etc. is an essential thing to do.
STEPS TO FOLLOW FOR A GOOD BUSINESS
The US Farm Bill passed in 2018 legalised CBD from industrial hemp with upto 0.3% CBD content. But the story doesn’t stop here. When you venture out to open up a CBD business, there are many things to take care of. These include not just keeping in mind the Farm Bill but also keeping in note the following things:
- Clean Green Certification
As mentioned in the earlier section, this certification ensures you to have your brand the more genuine mark in terms of having organic product. Thus, the issue of bad quality is defeated here.
- State based Guide Differences
State permits & licenses are very much needed to operate a CBD products business. To learn more about licensing requirements in your state, you should always visit & check with the authorities related to such matters. By this, you get to shield your business from all legal implications of the state.
- Federal Business Licensing Requirements
Although CBD products do not produce psychoactive effects like the THC found in marijuana, the two products are quite parallely associated. Hence, the production & sales of CBD products are a bit more noticed one. Before starting the business, it is important that you make sure to brush up on both state & federal laws regarding CBD products. Having a legal advisor on board for this will ease the process with explanation. This will ensure your business functions smoothly without any sort of legal troubles.
- State & Federal Business LawsA legal business consultant will also guide you to with the laws of your state as well as that of the federal side. Thus, all things will be based on the laws & you’ll have a good grip on the business whilst maintaining things within legal limits.
- Certificate of OccupancyA CBD business is generally run out of a place where the oil is manufactured. Businesses operating out of a physical location normally require a Certificate of Occupancy (CO). This confirms that all building codes, zoning laws & government regulations have been dealt with legally.
- If you intend to lease a location, take care of the following points
- It is the landlord’s responsibility to obtain a CO.
- Before leasing, be careful & make sure that your landlord has or can obtain a valid CO that applies to a CBD business.
- After a major renovation, a new CO generally needs to be issued. If the place of business will be renovated before opening, ensure mentioning in written language in the lease agreement stating that lease payments will only start after a valid CO is issued.
- In case you want to plan to purchase or build a location:
- You are the one responsible for obtaining a valid CO from a local government authority.
- Recheck & review all building codes & zoning requirements for your business’ location to ensure that everything in your business is in compliance to the CBD oil business.
Have a good knowledge on the taxes to be paid & charged for to the customers. Many laws require you to levy service tax on the products & services that you provide. This will help you with many factors including the pricing of it.
- Permissions & Licenses
There are various licenses & permissions which are required before starting any business, not just for CBD business. Missing out on these permissions & licenses can lead to lumpsum fines being imposed as well as cases & legal troubles. Hence it is needed to obtain all permissions & licenses to have things go without any hiccups.
With all such steps covered, you can always look forward to a good CBD business as a distributor. Since business is a tricky game, you’ll have to play it yourself & these steps are only to help you get a start.