NO LONGER A CONTROLLED SUBSTANCE
On December 20, 2018, the U.S. Federal Government authorized the removal of hemp from the Schedule I controlled substances list, converting it into an ordinary agricultural commodity overnight. As such, the country’s already seeing evidence of the range of hemp-derived CBD products that are set to take the industry by storm in 2019. What’s particularly interesting, however, is the opportunity that this change to federal law presents to the long list of already established US cannabis brands; those that have, up until now, focused on growing flower and manufacturing a THC-strong experience.
JUST TO MAKE SURE WE’RE ALL ON THE SAME PAGE…
Technically, hemp is a variety of the cannabis plant. It contains less than 0.3% of tetrahydrocannabinol (THC), which is the psychoactive ingredient in cannabis famous for getting you high. Derivatives of hemp have historically been used to create everything from textiles to medicines. But over the past couple of years, it’s become more and more available in the trendy form known as cannabidiol (CBD), an ingredient that’s said to alleviate pain, depression, and a whole host of other health concerns.
WHAT’S THE BIG CBD OPPORTUNITY?
In a nutshell, if you own a cannabis brand and you sell cannabis products with high levels of THC, or you grow your own flower, then you’re required to comply with state laws and you can only sell your products or flower in the state you’re licensed in. Cannabis products that contain more than 0.3% of THC are governed by distribution regulations, which means they can only be sold via legalized distribution companies and dispensaries. Rigorous marketing regulations are also in force and brands must comply with the packaging requirements determined by each state.
This means that, up until now, it’s been impossible for regular cannabis brands to connect with consumers across the country and to grow brand awareness on a national level. But now that hemp-derived CBD is nothing more than an agricultural commodity in the eyes of the law, things are different. There’s an opportunity for established cannabis brands to create a subsidiary CBD product line, sell it, and market it all over the US, and to build national awareness of their brands as a result. Cool, right? Let’s get into the details…
THE BENEFITS FOR YOUR BRAND WHEN CREATING A CBD PRODUCT LINE
With the passing of the Hemp Farming Act of 2018, one of the most appealing reasons for creating a hemp-derived CBD product line is that brands don’t need a licence to sell, manufacture, or distribute. They can work directly with mainstream retailers in the non-regulated market, and they can sell their products to anyone, in any state. It’s this exciting invitation to market and sell nationally, without so many restrictions, that gives established cannabis brands the authorization and advertising bandwidth they need to build brand awareness on a grand scale. While continuing to sell THC-strong cannabis products within state lines, these brands can establish a national reputation by marketing their hemp-derived CBD products across the country.
When it comes to the law, let’s get one thing straight. To successfully create, brand, and then market a CBD product line, all products featured must contain less than 0.3% of THC and they must be made from hemp. It’s also important to note that the legal aspects of the cannabis/hemp industry continue to change like the wind, making it a little overwhelming for smaller brands to keep on top of legal developments. This is why it’s a good idea to build and market your brand with the help of an industry specialist and to even establish a strong working relationship with a qualified, experienced cannabis lawyer as well.
Having said that, if the idea of a hemp-derived CBD product line appeals, how do you get started?
THE CBD INDUSTRY IS GOING TO BE ALL ABOUT INNOVATION
While it might be enough to focus on the quality of your flower as a licensed grower in a legalized state, if you want to make an impact in the CBD space, your product needs to be innovative. For example, there are plenty of CBD creams making their way onto the market, which is why the only surefire way of making a real impact and capturing the attention of this relatively new target audience is to focus on innovation.
Similarly, lots of brands have started to manufacture a line of CBD edibles, but the key to real success in 2019 lies in finding innovative ways in which these CBD edibles can be consumed, shared, and enjoyed. Think CBD shots in your morning smoothie, a CBD vape that’s perfect for backpacking, a CBD milk that makes the perfect addition to your afternoon latte, a CBD cheese that you can use to spice up your hamburger, or a CBD dry hair conditioner that’s packaged in tiny travel bottle for real convenience. The more innovative the product, and the more innovative the experience offered, the better.
DO YOU NEED HELP?
If the contents of this post has inspired you, if you think you’ve got a winning idea for a CBD product line, but you’re really not sure how to go about developing it, then feel free to reach out to us. We’re here to help.
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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.