Can I sell CBD in my retail store?
With the passing of the U.S. Farm Bill in 2018, a federal law legalizing cannabidiol, commonly referred to as CBD, more CBD products are seemingly finding their way into retail stores across the nation. Of course, this news is not entirely surprising given that the CBD market, according to available statistical data, is expected to reach or surpass $20 billion by the year 2024. In fact, CBD oil alone, which represents only one segment of the market, as of 2016, was valued at $688 million and is now projected to reach an astonishing $3 billion by 2021. Most statisticians and industry experts believe that CBD’s proven track record when it comes to resolving a wide range of health problems has a lot to do with this current and projected growth.
What you should know about Cannabidiol
If you’re a retailer who is considering jumping on the proverbial bandwagon by selling cannabidiol in your store, there are a few things that you will need to know as they will go a long way toward improving customer satisfaction and enabling you to turn a sizeable profit. The first is familiarizing yourself with the manufacturing process associated with CBD-based products as there are several steps involved in producing and bringing them to market.
From there, you will want to work with a supplier that carries products manufactured from industrial hemp, a strain of the Cannabis sativa plant species that is grown for industrial purposes, as they typically contain the least amount of THC (tetrahydrocannabinol), the psychoactive compound in marijuana that produces a euphoric high. The extraction method that these suppliers use when it comes to extracting CBD oil from the Cannabis sativa plant is also important as well. The most popular extraction methods and the ones that contribute to the best high grade CBD products include:
While this method is the most expensive, CO2 (carbon dioxide) extractions produce a high grade CBD oil, which can be used to manufacture even higher quality CBD-based products with fewer contaminants.
Supercritical CO2 extraction
Slightly more efficient and even cleaner than standard CO2 extractions, supercritical CO2 extraction involves using the combination of low temperature and pressure to extract the purest CBD-containing oil from the cannabis plant. And much like a standard CO2 extraction, this method produces fewer contaminants while retaining many of the essential properties of the oil.
Of course, there are several more ways to extract CBD-containing oil from the cannabis plant; however, these two are among the most common and, arguably, the best when it comes to yielding high grade CBD.
Responding to consumers who are ready to buy high grade CBD
As with any business, if you plan to thrive in the CBD-based market, you will need to fully understand the needs of your customers and be able to meet those needs. Although statistics show that customers want to buy high grade CBD products, some are more in demand than others. According to several studies, there is a high demand for the following:
To satisfy their sweet tooth and also address certain health problems, many consumers are gravitating toward CBD-based edibles. Based on current statistics, this segment of the market is growing by leaps and bounds. And as of the writing of this article, the edibles that are in extremely high demand include gummies, beef jerky, and baked goods.
Topical CBD-based products
Studies show that more individuals who are struggling with aches and pains are choosing topical pain relievers over oral medications. As a result, there is a growing demand for topical CBD-based products, namely creams, gels, and sprays. That said, if you plan to sell CBD-based products in your retail store, it would be a good idea to keep an ample supply of these products on hand.
These products contain a high concentration of cannabidiol and less than 0.3 percent THC, the amount deemed legal by the U.S. government. Sublingual tinctures are placed under the tongue and are absorbed into the body as they dissolve. Sublingual tinctures are commonly taken as a supplement to support a healthy lifestyle; however, they can also be used to help reduce inflammation as well.
These products are often aimed at those who enjoy inhaling oils, waxes, and other CBD-infused products because of how much it resembles smoking marijuana. Of course, vaping offers the same health benefits as edibles, tinctures, and topical CBD-based products, so the preference for vape concentrates is probably more psychological than anything else. Nonetheless, there is a high demand for them.
How to get people talking about your store
Now that we have identified some of the top-selling CBD-based products and how to choose the right supplier, let’s take a moment to go over some of the steps that you can take to get people talking about your store. After all, even if you already have a thriving establishment, you still want to let current and prospective customers know that you are now a purveyor of quality CBD-based products, which often comes down to effective marketing. In some cases, the old-fashioned approach, which entails sending out fliers and placing eye-catching displays in your windows, can still be an effective way to lure customers into your store.
Familiarize yourself with the laws in your state
While carrying, selling, and producing CBD-based products has been legalized thanks to the passing of the Farm Bill, the laws can vary in complexity from one state to the next. For example, the overly strict laws in Texas have led to the closing of several CBD-based businesses even though there was a strong demand for the products that they carried. As such, it is critical that you understand the laws specific to the state where you will be operating your CBD-based business.
Avoiding too much competition
While competition benefits consumers by enabling them to receive the best possible price, quantity, and quality of goods and services, it can have the opposite effect on businesses, especially new ones. For example, if you open a new business selling CBD-based products in a state that is already overrun with them, you may find it next to impossible to turn a profit. Even if there are not a lot of CBD-based retailers in your state, you should still choose where you set up shop carefully, meaning you will want to avoid opening a new retail space on a street where there are already too many of them.
Challenges associated with starting a CBD-based business
Despite being legal and becoming more accepted, there are still several challenges that come with starting a CBD-based business, the first being opening a business bank account. While this process is usually straightforward, it can be more complicated than you might think. In short, CBD-based products are not exactly mainstream yet, and most banks are still reluctant to associate themselves with businesses that carry and sell them.
With that in mind, you may have to apply for a business account with several banks before finding one that will be okay with opening an account linked to a CBD-based business. Even then, there is no guarantee that they will not abruptly shutter the account.
Studies show that several well-known banks have abruptly closed business accounts associated with many CBD-based businesses, causing those who own these businesses to have to quickly find new banks that would be willing to work with them. Not surprisingly, this can cause a significant disruption in day-to-day operations. Additional challenges that come with starting, owning, and running a CBD-based business include
The days of all-cash businesses are long gone; for your business to succeed, you have to accept credit and debit card payments. Unfortunately, Visa, the world’s largest payment processing platform, recently announced that it is no longer processing payments for CBD businesses. Therefore, you will have to find a viable alternative, such as MasterCard or American Express, for example, before launching your business.
As with any business, you will need insurance to protect your CBD-based business. And as of the writing of this article, insurance premiums for CBD-based businesses are at an all-time high. As such, it may be difficult to find quality coverage at an affordable price.
The CBD-based market, particularly high grade CBD, is poised for big things in the coming years, and with thoughtful planning, you too can capitalize on what will soon be an industry worth $20 billion.
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