As in life, business and industries are always changing. Being able to roll with the punches and having the tools to adjust can keep your frustrations to a minimum. The CBD industry exploded on the scene two years ago and continues to grow every day. However, as in any budding industry, it has faced and continues to face a myriad of challenges. Here are some common challenges faced by CBD businesses.
CBD is one of the many compounds found in the cannabis plant. It’s the association with this controversial plant that initially gave CBD a negative connotation. The black sheep cousin, THC, has made it hard for CBD to get a fair shot as a reputable therapeutic solution for consumers. This association brings with it many challenges for CBD.
So, how should you tackle public opinion when it comes to potential customers? Simple. Educate and inform your customer base about CBD. Knowledge is power! Even if people have predetermined thoughts about something, they can’t argue with facts and will eventually come around. Providing written materials, writing educational blogs, and producing videos are just a few examples of ways to start the conversation about how CBD can positively impact your life.
When talking to customers, drop little tidbits of information in the conversation, so that even your established clientele can be further educated and spread the news. Word of mouth is the best advertising around anyway! After all, the best way to sway public opinion is through the public themselves.
As you begin to sift through all the rules and regulations of the CBD industry, you may feel that there are a lot of challenges to go through. Try not to feel overwhelmed with the amount of conflicting information. Start with the origin of all the rules by looking at both the federal and state laws on a government website. It’s important to get this part right because you will be held accountable for any rules or regulations that apply to you.
Here are some questions you need to be very familiar with as a business owner.
Is CBD legal?
Yes, according to federal law. The Farm Bill of 2018 made “CBD derived from hemp” legal in all 50 states. The wording “derived from hemp” is very important because “CBD derived from marijuana” is still illegal in the US. That’s right; CBD can be found in all varieties of cannabis, including marijuana. If you buy products made from US grown hemp, then you do not need to worry. Learn more about why it is safer to purchase US grown hemp here.
Is CBD legal in my state?
Every state is different, so do your homework on this one. State laws and how they are enforced can be tricky, so be sure to check your state’s website for what is expected of you or contact your state representative for further clarification.
Are CBD infused products legal?
Technically, no. According to the FDA and federal law, it is still illegal to market CBD in this manner. It cannot legally be added to food or labeled as a dietary supplement. Customers won’t get in trouble for buying it, but the business owner is walking a very thin line to market it this way. We are anxious to see what happens with this part of the law in the near future. CBD infused products are big business, and there is a long line of corporations with products waiting to hit the market.
Last but not least, you have the FDA. CBD is regulated and enforced by the FDA. Any changes to federal rules or regulations will come from them, so watch for press releases as often as you can. Bottom line – familiarize yourself with the legality of your business, so that you aren’t levied with heavy fines and legal action down the road.
Whether your business is brick-and-mortar or solely eCommerce, finding a payment processor to serve the transaction needs of your CBD business can be frustrating and provide challenges. Credit card vendors and many financial institutions are unwilling to let most CBD businesses transact through them because they consider it to be a high-risk venture. Many of these companies have blanket rules for all cannabis products, which unfortunately includes CBD. This exclusionary practice has started to change as the public’s need for CBD products continues to grow.
We do live in a consumer-driven society, and financial institutions realize they may have been wrong by shutting the door on CBD. Recently, leading processors like Square have had great success by offering services tailored to the CBD business owners’ financial transaction needs. Hopefully, others will follow with their policy changes. After all, they are in the business of making money, and I’m sure they want their share of the revenue generated by the CBD industry.
Want to start a CBD business or manufacture CBD related products? Getting loan approval from a financial lender is going to be harder than you think. There is an increased level of scrutiny from lenders when a CBD application crosses their desk, understandably so. The CBD industry is new, and these are untested waters. Many people felt that CBD would turn out to be a fad. However, not only has CBD proven itself to have staying power, but it also continues to grow with no end in sight. The CBD industry has a billion-dollar track record that is getting the attention of banks and other financial institutions. And as the tide begins to shift in payment processing, it won’t be long before the financial institutions that loan start-up money begins to follow suit.
The CBD industry is exciting and new, but it is important to note that it isn’t a cakewalk. It comes with its own set of challenges. Familiarizing yourself with such challenges will help you prepare adequately to join this amazing industry.