The cannabis industry is growing at a rapid rate, with revenue expected to exceed $51 billion in 2023 after an annual growth rate of 15.77%. This would result in over $92 billion in market volume by 2027.
Knowing how lucrative this industry can be for many businesses, the average entrepreneur might consider exploring their options to see if they can create a business that sets them up for success. However, before you start working on your business plan, you might like to familiarize yourself with the following information.
Customers Want Variety
During the research phase of learning about the average cannabis business, you’ll likely discover that customers want variety. While many consumers are more than happy to purchase CBD flower and pre-rolls, others want more exciting products like an expansive Delta-8 gummy range, Delta-9 edibles, and even products for their pets.
The more products you think to include in a new cannabis business, the more customers you can cater to, and the more popular your store might be. Keep this in mind when you begin exploring wholesaler options to make sure your potential new store is well-stocked.
Licensing Requirements Can Vary
Just as you would need a business license to start a standard business, you’ll also need one to open a CBD business. However, there’s no one-size-fits-all approach for licensing, with requirements varying from state to state. This is due to marijuana still being illegal in many parts of the country.
Start researching permit requirements for growing hemp and selling CBD products in your state to ensure you can abide by all rules and regulations. The more research you perform early on, the fewer hurdles you might encounter as your business plan progresses.
Your Products Must Adhere to FDA Regulations
The FDA takes a hard stance with CBD businesses, and failure to abide by all regulations can have consequences. When the time comes to start researching how to run a successful CBD business, make sure you put effort into understanding what’s legally required of you.
For example, you’re not allowed to make claims about CBD goods being cures for illnesses, and you must ensure you abide by FDA regulations for labeling. This means all product labeling must include the following information:
- Net weight
- Manufacturer name and address
- CBD concentration
- CBD potency
- CBD type – CBD isolate, broad-spectrum, or full-spectrum
- Supplement facts
- Date or batch code
You Have to Get Creative With Advertising and Marketing
You might assume that marketing your new CBD business is as easy as launching a website and running a few social media and search engine ads. However, advertising and marketing CBD products can require more out-of-the-box thinking.
Most social media platforms don’t allow CBD and cannabis ads, and Google has also said no to ads that promote the sale of hemp, CBD, and cannabis. As a result, you must explore other options like influencer marketing, blog content, affiliate marketing, and even podcast ads on podcasts people trust.
Entering the cannabis industry might make sense from a profit perspective, but there’s more to consider than money. Put time and effort into the research points above, and you might stand a better chance of establishing a successful business with as few logistical hurdles as possible.
Above Picture: Richard T