It has only been a few years since the world has showed a green light for the CBD products to enter into the market. However, within these few years, this product has literally conquered the medical sector. CBD has also influenced the market for dietary supplements and cosmetic products. Along with the medical communities and research agencies, common people are also recognizing its benefits. This is the main reason for the increasing popularity of CBD.
If you are looking for the best industry to start a business, CBD is a good option for you. This is because the market studies have stated that CBD industry would have an aggregate turnover of 2.5 million US dollars. The support given by the law making authorities and medical practitioners can also be used as an incentive for your business. Since CBD is an agricultural product and due to the complexity in its chemical composition, it is mandatory to be attentive while entering this industry. Some things to be considered while getting into the CBD business are as follows.
Type Of Market
There are several options for you to start your business in the CBD industry. You can either be a producer or a seller. You also have the opportunity to be a trader of CBD products. Therefore, you must decide which of the following roles is suitable for you.
If you are interested in farming and if you are confident in undertaking the task of making high quality CBD extracts, you can play the role of a producer. The duty of producer is to cultivate high quality industrial hemp plant and extracting CBD from them. Some producers are also engaged in making pure CBD products like pills and oils along with cultivation of CBD. If you have enough land and capital to set up CBD extraction chambers, you can enter this sector because the demand for CBD is not going to decrease in the upcoming future.
Even though the name seems similar, there are so many differences between a producer and a manufacturer in the CBD industry. The role of producer is to extract CBD from the plants. This extract will be then procured by the manufacturers to make different CBD products like edibles, tinctures, etc. Some manufactures also use CBD to make medicines for the treatment of epilepsy. To engage in this activity, you will need a huge capital to set up the machineries and to undertake research and development.
This is the role in a CBD industry that requires least capital investment. You will not have to produce your own products but can collect them from the existing manufacturers and sell it to the final consumers. Along with the capital investment, the profit margin of this business is also comparatively low. However, the main advantage of this business is that if you have a store, you will not have to set a new one exclusively for CBD products. This is because in most places, it is legal to sell CBD through general stores and pharmaceutical stores.
Types Of Product
There are so many varieties of CBD products available in the market. Some of them are used for medical purpose and some are used as medicines. Before entering the CBD industry, you must have a clear understanding about the CBD products and must decide which is more convenient for you to deal with. A brief description about the two main categories of CBD products are as follows.
- Dietary Supplement
CBD is an abundant source of so many minerals and other nutrients. It contains a high concentration of protein and it is one of the rarest plant substances that has omega 3, 6 and 9 fatty acids. A section of the CBD consumers are having it due to its nutritional benefits. Along with nutrition it can also give them protection from conditions like stress and anxiety. These CBD products will have low concentration and can be even sold through general stores. Therefore, you must analyze the type of customers in your locality and choose the best product that is suited for you.
CBD is an approved ingredient in making actual medicines for epilepsy. Due to its other medicinal qualities, many people are using CBD products for the treatment of conditions like insomnia, chronic pain, etc. Most of these products are highly concentrated and it will need special permission to sell them in market. If the demand for these products is high in your area, you can consider dealing with CBD medicines instead of nutritional supplements.
Source Of The Product
CBD is a substance found in the cannabis plant but in most places only CBD derived from the hemp plant is legal. Therefore, if you are planning to get CBD from other producers, you must check the source of the extract. You must also make sure to check the credibility of the manufacturer if you are playing the role of a seller. Some things to be considered about the source of product in different circumstances are as follows.
- Own Production
The best way to get the high quality CBD is producing it on your own. However, if you are planning to cultivate and extract CBD by yourself, you must follow the regulations of your place. In most countries a special license is necessary to cultivate hemp plant. You must also make sure to use high quality seeds for cultivation. It is mandatory to follow organic farming techniques, that is, the method that does not use chemical fertilizers and pesticides or else it may contaminate your CBD extract.
- Procuring From A Third Party
If you are planning to buy the CBD products or CBD extracts to make your CBD products from a third party, you must be very cautious. Firstly, you must make sure that the third party is legally allowed to cultivate CBD. If the producer is good, make sure to check the quality of the products. You must also make a visit to their industry and ensure that their product is not contaminated by inorganic farming and extraction practices. You must also make sure to choose the most cost effective supplier.
Compliance With The Rules And Regulation
CBD is an element derived from a substance that is considered as a potential drug. Due to this reason there are many places around the world that has not yet legalized the sale and usage of CBD. Therefore, before planning to start a CBD business, make sure that it is legal in your country. However, in some countries like the USA, it is necessary to check the local laws along with the national rules because it may sometimes contradict each other. In short, you must have a clear understanding about the necessary rules and regulations and must comply with all of them before launching your business.
Marketing is an inevitable part of every business. Marketing is necessary to gain all the basic necessities of a business, that is, stability, growth, profitability, etc. You must make sure to adopt best marketing strategies and techniques to make your product familiar to the people. You must also integrate methods to persuade consumers to use CBD. Marketing can also play a major role in increasing your customer base. If you are not confident in formulating a good marketing strategy, it would be ideal to outsource the activity to other marketing agencies.
Mode Of Sale
Since the legalization of CBD, there are not many restrictions to sell CBD products in traditional markets. However, due to the increase in low quality products and misuse of the opportunity, some countries have imposed rules regarding the sale of CBD products in offline market. In some countries, it is necessary to grab a license before starting the sale of CBD products. In some other places, only the government controlled distilleries are supposed to make the sale of CBD products.
If you are entering the CBD industry, you must make sure to utilize the scope of online markets. As per the study reports, the number of potential consumers for CBD is more in online market compared to offline markets. In most countries, there are no rules restricting the sale of CBD through online shopping sites. Therefore you must design an effective web portal to conduct online business. You must also make sure that your website is equally or more efficient than that of your competitors for better stability and growth.
Management Of Books
CBD is a substance derived from the same source of marijuana. Hence there is a chance for people to produce actual cannabis within the cover of CBD industry. Due to the potential risk of increasing illegal business along with the CBD market, inspections and auditing is more rigid for CBD businesses. Therefore, it is mandatory to follow the rules and keep clear record and necessary books of accounts. It is also necessary to manage the cash inflow and outflow and to keep a record for the same. It can also help in building a reputation for the business.
The above mentioned are some of the matters that must be kept in mind before entering the CBD industry. Before starting a business, you must not only check its opportunities but also the potential threats in the market. In addition to that, you must analyze your own strength and weakness to carry on the business. As per the reports, CBD market has a great potential and it can increase much in the coming years.