THE ULTIMATE GUIDE TO STARTING A CBD BUSINESS IN 2019
Oklahoma, California, Colorado… little by little, state by state, the U.S. continues to regulate the cannabis industry, giving farmers and manufacturers the chance to launch fully-formed, carefully marketed brands out into the public sphere. But, the legal high we’re promised from THC-strong regulated cannabis products is not the only industry development we should be paying attention to. Hemp-derived and cannabis-derived CBD products and brands are promising to skyrocket in 2019.
So, let’s imagine that you’re interested in launching a CBD brand, or a CBD line of products to complement your THC-strong selection. How should you go about it? What will ensure the difference between a successful CBD brand and an unstoppable, disruptive CBD brand in 2019? These are our thoughts…
1. GET THE LEGAL STUFF RIGHT
Remember that CBD derived from cannabis is treated differently to CBD derived from hemp. In particular, on December 20, 2018, the federal government passed the Hemp Farming Act of 2018, which means that hemp-derived CBD is no longer classified as a Schedule I drug in the U.S., but instead treated as an ordinary agricultural commodity, nationwide.
This means that hemp-derived CBD products can be marketed and sold in the non-regulated market, in pharmacies, and retail shops, whereas cannabis-derived CBD remains part of the regulated market. As such, it can only be sold within state lines and via licensed dispensaries. That being said, you still need a license to grow and manufacture hemp, but the license, as well as the processes you go through to get your license, are different.
It’s also important to bear in mind that both hemp-derived CBD and cannabis-derived CBD products form part of an industry that’s in a state of constant change. First-hand experience at Cannaverse tells us that it’s a good idea to make contact with a trusted legal specialist who can stay on top of the shifts in local and national laws. You’ll want to avoid doing anything that might get you into trouble with authorities and which could also potentially be fairly costly to resolve.
In addition, the FDA is now involved, stating that it fully intends on supervising products containing hemp-derived compounds as it does with any other FDA-regulated product, including drugs, foods, and supplements made using hemp-derived CBD. In short, the industry remains in constant development, and it’s this dynamic quality that demands careful legal understanding at all times.
2. KNOW YOUR AUDIENCE
The CBD industry is about to boom, which means there’s going to be a lot of brands, a lot of ideas, and a lot of competition. One of the most effective ways of securing success for your brand or product, is to clearly define your audience. Are you targeting men or women? How old are they? How much money do they have to spend on your product? Where do they live? Do they have children? Why might your product be useful or interesting to them? What might be the reason why they choose your product over the one offered by your competitor?
Ask yourself as many questions as you can about your audience. It’s a good way of defining your product’s true selling points and an even better way of evaluating whether or not your product will generate interest. Offer a product that people actually want or need. Introspection is the key. Analysis and strategy are crucial.
3. BE INNOVATIVE AND FIND THE MARKET OPPORTUNITY
On a similar note, innovation is going to stand for a lot in the CBD market in 2019. The notion of using CBD as a way of treating, relaxing, or healing the body is a contemporary one. The market is modern and the target audience is forward-thinking, which means they expect you to be even more so. The more innovative you can be with your product’s design and function, or even with the experience it affords, the more likely you are to be recognized as one of the most disruptive CBD brands of 2019.
CBD shots in your morning smoothie, CBD-infused coffee beans for an unmatchable morning wake-up ritual, and CBD moisturizers, have already found their way into the public arena. The products of 2019 need to take things to the next level. It’s time to start getting creative.
4. INVEST IN A FEW SOCIAL MEDIA BENCHMARKS
No matter how incredible your idea is, how many years you’ve been involved in the cannabis/hemp industry, or how much money you have to throw at your CBD venture, social media benchmarks are a must. Not only can you use them to take a look at the competition, you can also use them to check out the marketing and branding efforts of related industries. If you’re working on a CBD edible, you might want to take a closer look at coffee brands. CBD skin care lines could learn a lot from world-renowned beauty brands, or small-time organic lotions.
Study the use of hashtags, post frequency, art direction, graphic style, the tone employed in the copy, the platforms the brands choose to publish on, the ways in which they encourage interaction from followers, and the ratio between posts related to product, education, and lifestyle. Take a look at three brands, at least, so that you can cross-reference and get a feel for possible gaps in the market. It’s also a good idea to focus on benchmarks at least twice a year, sometimes focusing on the same brands, to monitor how brand communication develops over time.
5. MAKE SURE YOU HAVE BRANDING AND MARKETING ESSENTIALS COVERED
While there are some things you might be able to cut back on, certain things are essential. The CBD industry is about to become more professional and competitive than it has ever been before. Homemade packaging and ad hoc publicity material are out, slick packaging that reflects brand identity and adheres to regulated standards, supported by a winning logo design, are in.
There are some marketing elements you can cut back on, or bypass altogether, depending on the budget you have available, but all brands without exception need a solid website with a straight-forward purchase process. A carefully constructed social media plan, that’s both creative and strategic, is also essential. Any brand without these marketing basics will be at a serious disadvantage from the start.
On a related note, we believe there’s a great deal that up-and-coming CBD brands can learn from those already established in the wellness industry. @harlowskinco, @campobeauty, and @sajewellness, are three wellness brands worth keeping an eye on for branding inspiration and effective social media strategy, particularly on Instagram.
6. FIND WAYS TO CONNECT AND LEARN FROM THE CONSUMER
So, you’re staying on top of the legal stuff, you’ve developed a product or product line that offers the consumer an innovative solution, you’ve done your benchmarks, and you’ve invested both time and money on branding and marketing essentials, but now you need to find ways of generating direct contact with your target audience.
Surveys, competitions, discounts, and giveaways, via social media will be effective. You can also use online communications as a way of inviting your followers to try out your product in exchange for a review. It’s also important to attend local and national industry events for face to face contact with the consumer. Use those opportunities to learn more about what the average consumer is looking for.
And… the rest is up to you. If you’ve got an idea, roll with it. 2019 could be your year for greatness!
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Despite the projections for growth and the confirmed increase in consumer interest, selling CBD products isn’t as easy as most brands want it to be. Creating a website, setting up an e-commerce channel, launching a few products, and investing in a little branding isn’t enough to secure regular and profitable CBD product sales. But, why?
One of the things that makes it difficult for any cannabis or CBD business to function is the lack of banking support. A solid merchant account is something that all businesses need, whatever the industry, but in the cannabis space finding one is a real challenge. Even though the 2018 Farm Bill made it legal to cultivate hemp on a federal level, and even though most states have legalized the cultivation and sales of cannabis and cannabis products to varying degrees, cannabis and CBD businesses are still having a hard time with banks and credit card companies. It makes the running of a legal, professional business difficult, if not impossible, which is why merchant account service providers, like InclusivePay, have come to the rescue.