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How to Start a CBD Business


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Sep 25, 2023
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The growing popularity of CBD presents an opportunity for entrepreneurs to start their own CBD business. Here are some key steps to launch a successful CBD company:

Research CBD Laws and Regulations

First, research all laws and regulations for CBD at the state and federal levels. The 2018 Farm Bill legalized hemp-derived CBD with under 0.3% THC, but regulations vary by state. Consult an attorney to ensure compliance.

Select Your Business Structure

Decide between structures like sole proprietorship, partnership, corporation or LLC. Choose one providing the right tax implications, legal protections and startup requirements for your needs.

Obtain Necessary Permits and Licenses

Apply for an Employer Identification Number from the IRS, as well as any required state and local licenses for selling CBD products. Some states require CBD businesses to apply for special hemp licenses.

Design Your Product Line

Determine what types of CBD products you’ll offer based on demand—common options include CBD oils, edibles, topicals and pet products. Vet suppliers and finalize quality manufacturing.

Establish Your Brand

Create a brand name, logo and label designs to reflect your positioning. Design professional packaging and have labeling reviewed for FDA compliance. Build out branding across websites, marketing materials and social media.

Find Sales and Distribution Channels

Decide your go-to-market approach. Will you sell via a website, wholesale to stores or through your own retail location? Develop marketing and partnerships to build distribution.

Fund Your Business

Calculate startup costs. Sources of funding can include small business loans and grants, crowdfunding, investments from friends/family, or your own capital.

With proper startup fundamentals in place, you can launch and grow a successful CBD company. As the industry matures, remaining adaptable will ensure continued growth and legal compliance.
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