CBD is a trendy topic right now, and you can find it infused in everything from dog treats to flavored water. There are many opportunities to make money by starting a CBD business. However, you would be considered a High Risk Merchant Account.
Below, we’ll tell you more about different kinds of CBD, the types of business opportunities available, and how you can start your own company within the CBD industry.
What Is CBD?
CBD stands for cannabidiol, and it’s a naturally derived chemical compound found in both hemp and marijuana plants.
This compound isn’t psychoactive, which means it won’t get you “high” the way a Tetrahydrocannabinol (THC) in marijuana will.
Instead, it’s known for its many potential health benefits. CBD products range from gummy candies to drinks, and some people even give them to their dogs in treats.
It is widely considered to help with symptoms like chronic pain, depression, and insomnia. Medical research has concluded that it is helpful in treating epilepsy, particularly in children. The U.S. Food and Drug Administration (FDA) recently approved a medication for childhood epilepsy that contains CBD.
Hemp CBD vs. Cannabis CBD
Many people assume that CBD only comes from marijuana, but in fact, most of the CBD you’ll find at the supermarket, health food store, and the mall is hemp-derived.
Generally, hemp-derived CBD is more widely accepted than cannabis CBD, because hemp’s legal status is not in flux the way marijuana is. Hemp is legal to grow in every state, and it isn’t considered a drug.
There are 3 major cannabis species, which are C. sativa, C. indica, and C. ruderalis—these are known for their high THC content, but they also contain CBD in low amounts.
Hemp is higher in CBD than cannabis is, and contains very little THC. It’s also much cheaper to cultivate.
CBD derived from a cannabis plant is chemically exactly the same as CBD from a hemp plant. However, selling CBD that comes from cannabis is more legally fraught.
Cannabis companies also face stricter regulation and will need special licenses and pay special taxes. Because of this, a business owner will usually need a high risk merchant account instant approval.
Full-spectrum CBD vs. CBD isolate
CBD isolate describes pure CBD with no other compounds. Full-spectrum CBD is primarily CBD, but also includes THC, flavonoids, and terpenes.
Remember that items categorized as CBD products can’t contain more than 0.3% of THC, so these products won’t contain enough of it to get you high.
Just like CBD, terpenes and flavonoids are not psychoactive. They’re not even exclusive to cannabis or hemp. Flavonoids are found in different plants, from cocoa to green tea. They create certain flavors and they also have antioxidant and anti-inflammatory properties. Terpenes are associated with scent in plants.
Some people prefer full-spectrum CBD because there is some evidence to suggest it works better when combined with flavonoids, terpenes, and small amounts of THC. This idea is called the entourage effect.
How to Start a CBD Business
CBD is growing in popularity, and the public is becoming more comfortable and familiar with it. Chances are, you knew the difference between CBD and THC before you read this article!
As research into the compound products continues, it’ll likely keep up its popularity. This industry is expected to reach $20 billion in sales by 2024, which means there’s plenty of time to start a CBD-related company.
Before you start your business, you’ll need to decide on what kind of product you want to sell. Many people sell CBD oil-infused products, and infusion offers a lot of possibilities. You can add CBD oils to baked goods, gummy candies, and other treats.
CBD oils are also popular on their own terms. Taking them sublingually in droplet form is convenient, and some people prefer this method.
It’s a popular online commodity, so you don’t necessarily need a brick-and-mortar store for your CBD company.
You could avoid the cost of paying for a rental space by sticking to eCommerce. A CBD merchant account will ensure you can accept online credit card charges smoothly and reliably.
Understand Your Legal Obligations
When you enter the CBD industry, it’s important to make sure you’re familiar with the various laws that may apply to your business.
It is legal to sell CBD throughout the United States, but the specific laws regulating it can vary greatly by state.
When it’s derived from hemp, there are usually fewer legal complications to consider. One of the disadvantages that come with CBD being a relatively new trend is that the laws and regulations around it can be confusing and unclear.
FDA states that any cannabis containing less than 0.3% THC is not considered a controlled substance. That makes it legal to sell CBD products throughout the United States.
State laws may differ on the subject, however. Read up and consider contacting a lawyer as you start your business.
Market and Sell Your Products
To stand out in this growing cannabis industry, you need a thoughtful approach to marketing.
An important part of being a successful CBD business owner is establishing your brand, more than just creating a business. This means establishing a look and feel associated with your products.
Your product names, packaging design, and types can all help establish a brand.
Creating a website and social media accounts is a great way to spread the word about your business. It’s also useful for promoting any new products you release after you’re established.
How to Gain a Competitive Advantage
The downside of CBD’s popularity is that you’ll be facing a lot of competition. So how can you get an edge over other businesses?
As mentioned above, branding is key. Your company name will be with you for years, so choose a catchy one that reflects the rest of the business.
It also helps if you have a unique business idea. Find your niche and put out high-quality products that cater to a specific audience.
Some people use infused treats or droplets for their anxious dogs, and find that it’s an excellent, natural method to calm them down when they’re stressed.
Key Challenges Facing CBD businesses
There are some unique challenges that come from owning a business related to CBD. You may be labeled a high-risk business because of the unique legal situation of the industry.
We can help you get a merchant account that fits your needs and provides reliable credit card processing.
If you want to learn more about high risk merchant account instant approval, contact us at High Risk Pay today.