CBD is, without a doubt, the new & trending wave in the field of health & cosmetic care. From being a plant that was looked down on as a drug, to a plant that could be a possible cure for cancer - cannabis has come a long way in a surprisingly short period. CBD is a chemical compound derived from the plant, cannabis (hemp). Currently, the only FDA approved CBD product is Epidiolex, which is used for the treatment of certain types of epilepsy. However, the CBD market continues to grow at an alarming rate despite CBD not being FDA approved.
The popularity rise of CBD is mostly from its users, who claim that it has helped them with everything from anxiety to cancer. CBD users who have experienced the effects it has on them vouch for the CBD products, which is possibly the most significant reason behind the unparalleled success of the CBD market. With an estimated industry sales of hemp-derived CBD of around USD 2.5 billion by 2020, CBD offers the most promising market to invest in right now.
What is CBD?
Let us start with the basics here, CBD or Cannabidiol is a chemical compound derived from the Cannabis plant. And before you ask, let me tell you, it does not get you HIGH. The cannabis plant has two major components, one is CBD & the other is THC or Tetrahydrocannabinol. THC is the psychoactive component that can get you high, which is practically absent in industrial hemp (0.3% or less), whereas CBD is a non-psychoactive component that cannot get you high.
The laws concerning the sale and usage of CBD vary from state to state in the US. Legal CBD, which you can get off the counter without a prescription can contain only 0.3% or lower THC in it. For example, in New York, if you need to get a CBD product with more than 0.3% THC, you’d need a prescription. This means you may sell CBD products on your eCommerce site as long as the amount of THC in it is less than 0.3%.
With more and more people vouching for the credibility of CBD supported by doctors, researchers, and lawmakers, the CBD market is growing every day. Although CBD is not FDA approved yet, a massive amount of people are pro-CBD. Thoroughly documented cases show that CBD provides several positive health effects (again these documentations are made by CBD users and not the official authorities like the FDA). CBD has been observed to have anti-inflammatory, anti-seizure, anxiety-relieving, and analgesic properties. With more and more becoming a part of the pro-CBD movement every day, this is the best time to enter the market and open your own online CBD store.
CBDs can be classified into three:-
1) Isolated CBD
2) Full-Spectrum CBD
3) Broad-Spectrum CBD
Isolated CBD, as the name suggests, is CBD derived from the cannabis plant isolating it from the other compounds present in the plant. Isolated CBD is 99.9% pure CBD and has no trace of THC in it.
Full-Spectrum CBDs are those which are derived from the cannabis plant, that includes THC - the psychoactive compound in marijuana (NO! It does not get you high. The presence of THC is limited to merely 0.3%), CBD full-spectrum is made up of dozens of cannabinoids that are present in the cannabis plant. CBD advocates say that when bundled together, the full-spectrum CBD creates a powerful CBD treatment that is far more effective than that of the isolated CBD products. CBD enthusiasts claim that the full-spectrum CBD treatment works for a wide variety of severe medical conditions like anxiety, depression, headache, and so on.
Full-spectrum CBD is even linked with the treatment of Parkinson’s, Alzheimer’s, and even Cancer, according to recent data emerging from the medical community. However, none of the claims has been approved by the FDA yet.
Broad-spectrum CBD is very similar to the Full-spectrum CBD except, it does not contain THC in it. Broad-spectrum CBD is preferred by people usually when they have to be subjected to a drug test or if they live in a state or area where there are strict regulations on marijuana or THC in particular.
There are a variety of CBD products you sell on your eCommerce store. CBD Tinctures, CBD Edibles, & CBD Patches are just a few of the CBD products that are widely used today.
When you are running a business, it is essential that you know about the products you are selling and what it’s used for. CBD is linked with the treatment of various diseases, it goes beyond humans diseases as it is even used for pets like dogs and horses. CBD is used for the following conditions:
- Lose weight
- Menstrual cramps
The list goes on and on for the possible uses of CBD. However, none of these claims are backed by the FDA yet.
Choosing the Best Supplier for your Online CBD Store
The key to running a successful store, let it be an eCommerce store or a brick and mortar store, is to sell quality products. It is no different when it comes to CBD; the importance of maintaining good quality is essential if you want to make it in the CBD industry. To get the best CBD, you need to find yourself the best supplier. Quality CBD makes sure that your customer receives the health effect they want from it. Imagine your customer buys a CBD product from your website for epilepsy treatment and not getting the expected results. It is unlikely that the customer will shop from your CBD store again. Selling premium quality products not only establishes you are in this for the long run but also tells the customer that you are not just another site trying to cash in on the trend. Most importantly, ensure your CBD products are manufactured/cultivated by a licensed producer.
There are a few factors that can help you to pick a reliable CBD supplier and make sure that you are getting quality products. We’ll discuss these factors below:
The first thing to do before you choose a supplier is to make sure that the supplier uses high-quality hemp. See to it that your supplier gets their hemp is from a reputable farm. If the supplier grows their hemp by themselves, make sure they produce high-quality hemp using the best practices in the industry (free from pesticides and other harmful chemicals)
CBD or at least legal CBD is extracted from industrial hemp, which has 0.3% of THC in it. CBD can be obtained from the hemp using a variety of processes. The extraction process plays a vital role, as it decides the quality of the CBD extracted from the hemp. CO2 extraction is the best process to extract CBD from hemp as it results in CBD oil that is free from any contaminants. Other methods could leave behind contaminants in the oil. It is best to opt for a supplier who uses CO2 extraction.
CoA & Other Tests:
CoA or Certificate of Analysis shows the exact levels of CBD, THC, and any other components that are present in the product. Access the CoA from the potential suppliers and check the levels of CBD and THC before you pick a supplier. Always ask for the results of pesticide testing microbiological testing for bacteria, and residual solvent testing for chemicals from the extraction process.
Various research works and experiments have shown that CBD works for a wide variety of health problems from anxiety to epilepsy. However, as I’ve mentioned earlier, almost none of them are FDA approved, yet. CBD suppliers, both wholesalers, and retailers are required to show the FDA’s disclaimer on their websites. Even if your supplier makes medical claims on their product, you cannot put that up on your online CBD store or products.
Like any other product out there, pricing is a deciding factor for both sellers and buyers alike. CBD products that are higher-priced are often found to be more potent & pure but, that doesn’t mean all CBD products with high price yield the same results. Try to avoid buying from suppliers who are willing to sell at a marginally lower price. They probably managed to price it that low by cutting a few (or plenty) corners, and the CBD produced will not have the same results as premium quality CBD.
Dropshipping & Private Labeling:
It is not necessary to have a dropshipping capability or private labeling on your CBD eCommerce site. However, this could elevate and boost your business. Private labeling also gives you an upper hand by allowing you to brand the products you sell with your business name and logo. Branding helps you get established in the industry and turn, helps to earn the customer's trust.
The legality of CBD
The legality of CBD is still a blurry image for anyone who is not educated on the subject. However, to sum it up in one short sentence - Yes CBD is legal in all 50 states provided that the amount of THC present in it does not exceed 0.3%; anything above that is in fact, ILLEGAL!
Hemp extracts excluded from dietary supplement definition can be marketed in the USA, provided they comply with the regulations covering food and supplements. One way or another these products need to be free from THC, to become eligible for sale.
Industrial Hemp has a maximum of 0.3% THC present in it; in other words, hemp-derived CBD is legal for use. Make sure your supplier is giving you hemp-derived CBD unless you wish to be prosecuted of course.
Never. I repeat. NEVER buy or sell marijuana-derived CBD. Marijuana-derived CBD remains illegal, and unless you really look forward to spending some time in jail, I suggest that you keep your distance from marijuana-derived CBD for now.
Having said that, do not assume that as long as you sell hemp-derived CBD, you are in the safe-zone. If a CBD product contains the legal amount of THC but wasn’t grown by a licensed producer according to federal regulations, that is also illegal. Therefore, I suggest you make sure you check-up on all these before diving into the CBD business.
Who can be targeted to sell CBD products?
One of the advantages of selling CBD is that you can sell your products in both B2B (business-to-business) and B2C (business-to-consumer) segments. Having a broader range of customers means that you could generate better revenue from the business.
When it comes to conducting your business on the B2B (Business to business) segment, the highlight is that your clients intend to sell your products, ergo they will need a larger supply of products than commercial buyers. Doctors and clinics are the major customers for CBD in the B2B segment. B2B and B2C businesses require different features, starting from the complex pricing to bulk discount to minimum order quantity.
Complex Pricing - The pricing of your products is not the same for all buyers when it comes to B2B business, unlike in a typical B2C store. The pricing may vary according to the amount being ordered, the frequency of orders, the type of product they buy, and so on.
Bulk Discount - Bulk discounts are common when it comes to B2B business, the bulk discounts are given to customers to encourage high order values, as well as to earn customer loyalty.
Minimum Order Quantities - Minimum order quantities are set up in B2B businesses in order to ensure the business remains profitable and for managing margins.
The whole process is much simpler when it comes to conducting your business on a B2C (business-to-consumer) segment. Just like B2B, B2C has its own feature set. The B2C business is a typical retail selling process, the main features on it include mobile readiness, facility to provide personalized deals, Full-fledged shipping support, and so on.
Mobile Readiness - When it comes to B2C business, most of your customers are individuals and the easiest way for an individual to browse for a product is through his/her mobile phone. Hence it is essential that your website is always mobile-ready.
Personalized Deals - These are the substitute for bulk discounts provided in the B2B businesses. Personalized deals include discount coupons or virtual coins, and so on. This encourages the customer to shop from your site again.
Full-fledged shipping support - Integrate with the best shipping companies in order to provide the best shipping experience for your customers. Shipping-optimization is essential when it comes to running an online store.
Things you should absolutely not MISS before starting a CBD eCommerce store!
A high-risk business is any business that has more than the usual legal rules and regulations binding it. CBD and firearms are two examples of high-risk businesses in the US. Since CBD is a high-risk business, not every platform allows a CBD eCommerce store to be built on them. Make sure that you choose the best platform for your CBD store. The best platforms preferred for running a CBD eCommerce store based on their functional & customization capabilities are Shopify, WooCommerce & 3dcart.
Virtina specializes in providing a platform-centric approach, by which we make sure that you choose the best platform for your particular business. Our team, with years of experience working with both low and high-risk businesses, can ensure that you receive a well functional eCommerce store.
You can not use a standard merchant account to run a high-risk business like CBD, which is where a high-risk merchant comes into play. Selling commodities online poses a higher degree of risk than selling the same product in a brick and mortar road. Although times have changed and CBD can be bought at the counter in many parts of the US, selling it online still requires a high-risk merchant account.
Virtina has years of experience working with High-Risk Merchant Accounts and other High-Risk Businesses. Working with high-risk businesses has gives our team insight into the nuances that need to be attended before starting a new online store so that we can build the perfect eCommerce store for you.
If at all possible, try to avoid taking up the sole-proprietorship of a CBD eCommerce store. CBD, as mentioned before, is a high-risk business, and you could end up losing everything you put into the CBD business. Setting up an LLC (Limited Liability Company)is highly recommended when conducting a business dealing with CBD.
Your business won’t be considered a legit one unless you get this done. Unless you have legal documents stating that your business is a registered one, your bank and merchant account will not approve your CBD business.
How can you improve your CBD eCommerce Store
- Selling labeled products: Selling labeled products is one of the easiest ways to ensure that your CBD eCommerce store established. Labeling your products gives you a chance to promote your brand. Providing required information about the CBD product on the label can help your customers choose wisely and help you build a positive image for your brand. The label could include information such as the amount of CBD, THC, or even the extraction process used.
- Showcasing the extraction process: Showcasing the extraction process for the CBD could help convince the users to buy your products and give them an idea about your company. You could use a well-made video for this, once the user sees about the detail that goes into each product, he/she could be convinced to buy your products.
- Branding on every product: Your product must stand out from the rest of your competition. This can be achieved by establishing a brand name for your business. Establishing your Online CBD Store as a brand is not an easy affair. Selling high-quality products is an essential requirement for building yourself as a brand. Labeling, marketing, and even packaging can be used to establish a brand name for your online CBD store.
The statements made regarding these products have not been evaluated by the Food and Drug Administration. The efficacy of these products has not been confirmed by FDA-approved research. These products are not intended to diagnose, treat, cure or prevent any disease. All information presented here is not meant as a substitute for or alternative to information from health care practitioners. Please consult your health care professional about potential interactions or other possible complications before using any product. The Federal Food, Drug, and Cosmetic Act require this notice.
See What Our Expert Says..
CBD eCommerce Strategist
Is marijuana-derived CBD legal for consumption in any of the 50 states?
In the 2018 Farm Bill, the federal government established that products derived from legally grown hemp are legal in the US, but subject to state laws. CBD derived from marijuana is federally illegal and can still be considered a schedule 1 substance by federal agencies. To determine whether marijuana-derived CBD is allowed in your state, you must understand the state laws regulating cannabis in your state. Regardless of the state laws, any product derived from marijuana will currently be considered federally illegal.
Are there any regulations regarding the quantity of CBD product that is bought or sold?
Each state is developing its own rules for regulating CBD. The FDA has announced that CBD will fall under its jurisdiction now that hemp-derived CBD has been legalized by the 2018 Farm Bill. The FDA has not yet released regulations for CBD, creating a bit of a gray area for CBD distributors. CBD distributors and retailers must closely watch for updates from the FDA and work to ensure they are compliant as quickly as possible.
What is the role/effect of the THC in Full-spectrum CBD products?
As described earlier in the above article, legal, hemp-derived CBD will contain less than 0.3% THC. This is a relatively small amount of THC when compared to amounts included in cannabis. However, THC can have a modest effect on the individual using the product, particularly for those seeking pain relief.
What makes full-spectrum CBDs better than isolated CBD products?
A full-spectrum CBD product will be closer to the original plant makeup and contains a full set of terpenes, cannabinoids and plant material (e.g. chlorophyll). Many specialists believe that these various components combine to provide an “entourage-effect” which is a combined effect in which the sum-of-the-parts amplify and promote the other components in addressing symptomatic issues.
In contrast, CBD isolates are targeted delivery products which provide pure and concentrated CBD. This can be helpful for people seeking only CBD and assists with inflammation and anti-spasmodic effects.
Virtina can help you to increase your revenue, improve profit and enhance customer experience.