How to Start a CBD Business – A Step by Step Guide

May 15, 2024

The cannabidiol (CBD) industry has taken off as one of the most promising markets in health and wellness. Because of its growing popularity due to possible health benefits, embarking on a CBD business gives entrepreneurs a special chance to get in on a growing market. However, navigating this path involves not only passion and excitement but it also requires a profound understanding of laws, consumer behavior, and market dynamics.

Whether you’re looking at getting quality hemp, making new products, or developing strong marketing plans, every step towards starting a CBD business is important. This guide will give you the key knowledge and strategies to launch and grow a successful CBD business in this changing industry.

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Understand the Legal Landscape

Before getting into CBD, it is important to understand the legal situation surrounding cannabis and CBD products where you live. The legality can vary a lot between states and countries, especially regarding THC content and whether the CBD comes from hemp or marijuana.


Research Regulations: You need to research the regulations. For example, in the US, hemp-derived CBD with THC no less than 0.3% has been allowed nationwide since the 2018 Farm Bill; however, state laws differ, and you must follow local rules on making, labeling, and selling CBD. States like Oregon and Colorado have established frameworks that support both recreational and medical cannabis use. On the other hand, states like South Dakota and Idaho have stricter policies where any product from marijuana, including CBD, has tight controls or bans.

Licensing and Permits: You might need specific licenses to manufacture, distribute, or sell CBD products, depending on your location. This could involve general business licenses, reselling permits, and probably a license just for CBD products.

Commonly Required Types of Licenses and Permits

Business License: Most jurisdictions will ask you to secure a basic business license, which is the fundamental permit that allows you to do business legally in your county or city.

Reseller’s License: A reseller’s license, also called a sales tax permit, allows you to acquire items for resale without the need to pay sales tax. If you’re planning on starting a CBD business, this type of license is important when you purchase raw materials or CBD products in bulk without the tax.

CBD-specific Licenses: Different states have rules regarding businesses that work with CBD. In California, for example, you need a special marijuana business permit if you make or sell CBD products from marijuana instead of industrial hemp. New York, on the other hand, offers a Cannabinoid Hemp Retail License made just for stores that sell CBD items and hemp extract. Furthermore, Colorado is known to have cannabis-friendly policies but requires a particular industrial hemp registration for farmers and processors of hemp. Retail sellers in Colorado also need a different type of license.

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Source Quality Hemp & CBD Products

Your CBD products’ quality begins with the quality of the hemp, so it’s very important to source high-quality hemp in order to produce a safe and potent product.

When choosing hemp suppliers, it’s very important to focus on those who are fully transparent about their cultivation methods. The growers should provide details on how they cultivate the plants, where the seeds come from, and if they follow agricultural and environmental best practices, as well as provide COAs for every product they produce. Choose suppliers who practice sustainable farming that protects hemp production long-term. Additionally, suppliers also need to abide by state and federal laws concerning hemp cultivation, including limits on THC levels in hemp plants.

Likewise, getting your own Certificate of Analysis (COA) from a third-party lab is important as it will ensure the hemp meets safety protocols and the desired amounts of CBD and other compounds. The COA will show THC and CBD levels are within legal and safe boundaries. Lab tests can also check for contaminants like molds, pesticides, and heavy metals to ensure the safety of the product.

Develop Your Product Line

Choosing what CBD product to sell is one of the most crucial steps. The CBD market offers a variety of options, and customer preferences can differ greatly.

You have choices like capsules, oils, edible creams, tinctures, and more. At first, it’s smart to offer a small selection to keep costs down and then expand your selection as you learn what sells best. Here’s a quick overview of common CBD products:

Oils and tinctures are probably the most well-known. You take them under your tongue so they enter your bloodstream fast. Oils usually come with a dropper, so it’s easy to control your dose.

Edibles include things like gummies, candies, chocolate, and drinks. They provide a discreet way to use CBD, though it may take longer to feel the effects since your body has to digest it first.


Creams and topicals are applied directly to the skin and are known to give comfort and eliminate inflammation. These could be balms, salves, or lotions.

Capsules provide a discreet option for consuming CBD with the added benefit of precise dosing and seamless integration into daily supplement regimens.

Vape products let you inhale CBD vapor. The quick impact is appealing, but vaping safety is still being looked at closely, so product safety is crucial.

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Your products deserve a brand that represents their quality and values and should resonate with your target audience, whether they are casual shoppers, people into wellness, or medical users.

Stick to a clear visual style across everything you make and all your promotional materials. This includes a font, a logo, and color scheme that fits the tastes of your audience. The tone and voice used when you communicate should match the brand’s personality as well, whether it’s educational, friendly, or professional.

Furthermore, packaging that looks great and is well-made can sway buying decisions. It must not only look nice but also functional, keeping the product fresh and sharing important details like test results, ingredients, and instructions.

Social media, your website, and marketing materials can tell your brand’s story. This could be about where your company started, where your materials come from, or how your products aid customers. A powerful story can create a deeper emotional bond with your target audience.

Ensure that all touchpoints with customers—product packaging, website, social media, and customer service—convey a consistent brand message. Consistency helps build trust and recognition, making your brand memorable.

Ensure every customer touchpoint—the website, packaging, customer service, and social media—sends a consistent brand message. Being consistent builds trust, and this will help your brand remain in people’s minds.

Establish Robust Fulfillment and Distribution Channels

Managing your inventory and fulfilling orders efficiently is crucial for ensuring high customer satisfaction and smooth operations. Setting up a website is important if you want more people to find you. Services like WooCommerce or Shopify can make that process easier.

Also, think about whether you’ll sell directly to people buying online or if you also want stores to carry your products, or both. If you want your goods in other retailers too, you’ll need to think about how to get items to them.

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Market Your Products

Promoting your CBD company is important for success since there’s a lot of competition and certain rules around advertising CBD products. A lot of people are still learning about CBD, so providing helpful information can help explain what you sell and encourage customers to buy with confidence.

Doing a good job with search engine optimization and articles on your website can help it show up higher in search results, thus increasing the chances of attracting interested customers.

Lastly, social media and partnering with influencers can be excellent ways to reach more people, but you need to be careful about each platform’s policies on CBD ads.

Stay Informed and Flexible

The CBD industry is always changing, with rules and what customers want always evolving. Keeping up with what’s new in the industry and being open to changes in your business plan will help you change along with it and do well.

Consider going to industry events, participating in online seminars, and continuing to read important articles.

Talking to other people running CBD companies and professionals who know the industry inside and out can give you really helpful information and chances to work together.


Starting a CBD company takes some serious prep work and knowing what’s happening in the market. You need to figure out the complicated legal stuff and get the right permits, plus pick good producers and make your brand known. Focus on quality, being upfront, and teaching customers – that will set you apart from others. By committing yourself and taking strategic steps, you can enter this lucrative market and establish a business that not only satisfies consumer demands but also shines for its honesty and creativity.

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