The CBD industry is booming with estimated US CBD sales to surpass $800 million this year alone. And there is no slowing in sight. By 2022, US CBD sales may reach $1.8 billion.
This is certainly a clear call to action for anyone considering selling CBD online. The industry has had no shortage of new sellers, some not so predictable. Sure, there are those who have been in the cannabis industry for decades and moving toward CBD products. But there are also dads, moms, even grandmothers building businesses around CBD.
Here are a few interesting statistics:
- Hemp-derived CBD is legally available across North America thanks to the 2018 Farm Bill
- Consumer demographics are highly diverse with baby boomers leading segment growth, increasing 25 percent YOY
- 38% of CBD users are women
- Women are also leading the charge in CBD business ownership
- CBD has decreased or stopped the use of over-the-counter pain medications among 71% of users
But all statistics aside, you need to really understand how to legally market and sell CBD products, especially online. There is no shortage of competitors, however, the supply is currently not meeting demand. People are turning to CBD for chronic illnesses, surgery recovery, acute pain and discomfort relief, and mental health issues.
Products also come in different forms, including oils, tinctures, sprays, lotions, balms, pills, and vape. Where do most people buy these products? The top three distribution channels are drugstores, online retailers, and supplement stores.
With 43% of CBD sales happening online, the time to launch a CBD business has never been better. But there are obstacles. Selling CBD online does have similarities to setting up any other online business. You need to set up an e-commerce store with a hosting provider, develop content, create social media accounts for your business, and the list goes on.
There are, however, idiosyncrasies specific to CBD products that you need to know and follow to sell online. For instance, finding a payment processor for your online store. This in itself can prove challenging if you aren’t familiar with high-risk payment processing.
The good news is that we have done the due diligence for you. The following ultimate guide to selling CBD online can serve as your roadmap to get your business up and running.
Let’s dive in.
|What is cannabidiol (CBD) exactly?|
Before we jump into market know-how and the actual selling bit, we should cover the “what” when it comes to cannabidiol.
Cannabidiol, more popularly known as CBD, is a natural substance that has been found to help a number of physical and mental health conditions.
One of the top questions people ask about CBD is, “Will it make me high?” This is certainly a bonafide concern, but it’s also part of the stigma behind CBD use and sales. Contrary to tetrahydrocannabinol (THC), the substance that does get you loopy, cannabidiol is a non-psychoactive.
But that doesn’t mean that all CBD products are THC free. It is a matter of how the cannabidiol is extracted and from what type of plant, marijuana or hemp.
- Greater than 0.3 percent THC content
- CBD extract is cannabis-derived
- There’s psychoactive potential
- Considered a schedule-1 drug in most states
- Less than 0.3% THC content
- CBD extract is hemp-derived
- There’s no psychoactive potential
- Not on the scheduled narcotics list
Will hemp-derived cannabidiol get you or your customers high? No.
However, if you fail to check with your suppliers or manufacturers where the CBD was derived, you could unknowingly be selling cannabis-derived cannabidiol, thus going from entrepreneur to drug dealer, depending on your state.
How does cannabidiol work?
This is a great question and one you should know how to answer if you plan on selling CBD products. Product knowledge is a key attribute to success, regardless of what products you’re selling.
The way cannabidiol works is actually pretty cool, and scientific. Since our bodies have an endocannabinoid system (ECS), we naturally produce cannabinoids for homeostasis. These cannabinoids, like CBD, bind to brain and immune system receptors, causing the physiological action. So when you use CBD, you’re inhibiting or activating compounds in your endocannabinoid system.
A study published in Neurotherapeutics (2015) outlined the effects of cannabinoids on seizures. They concluded that “CBD avoids the psychoactive effects of the endocannabinoid system to provide a well-tolerated, promising therapeutic for the treatment of seizures, while whole-plant cannabis can both contribute to and reduce seizures.”
It’s science. And the successful applications and outcomes for CBD use in a variety of medical health scenarios is the scientific pudding of proof.
|Understanding the CBD market|
You need to research the market before diving headfirst into a new business. Yes, the CBD industry is exploding. Yes, sales of CBD will more than double in two short years. However, there is still much to consider before opening up your online shop.
Knowing the “why” behind the growing sales of cannabidiol is a must-do if you want to be successful. Here are some key points surrounding the market to pay close attention to.
CBD consumers love variety, for themselves and their pets
One of the reasons the CBD industry is on an unprecedented rise is the variety of products consumers can get their hands on. If the forms of consumption only came in two or three different ways, growth would be much slower. This industry, however, is not average.
In fact, there are hundreds of ways to consume CBD, and many are pretty marketable. For instance, there are tasty CBD-infused drinks like Neorogan Hemp CBD Tea and True Breeze Pineapple Express Hemp Shots.
Some say CBD is for the dogs — literally, serving up CBD dog treats like MediPets CBD Treats and King Kalm Crunch CBD Treats. There are actually a lot of dog treats with a cannabidiol twist. This is because CBD is not only helpful to humans, but also pets. It can be used to help ease pet arthritis, injury, and anxiety.
Knowing what types of products you want to bring to market is important. You may have a whole new CBD product that could be the next big hit for humans and pets.
Accessibility is very important to consumers
One of the main catalysts behind CBD success is the fact that consumers can pretty much get products anywhere. After the Agriculture Improvement Act of 2018, also known as the Farm Bill, passed, hemp was no longer considered a controlled substance.
This made any hemp derivative like cannabidiol, containing less than 0.3 percent THC fair game. The flood gates opened since people already knew the alternative health and wellness benefits CBD delivered.
The accessibility led to more people consuming hemp-derived products. And the increased consumption led to the explosion of CBD businesses. In fact, most CBD businesses begin with a personal story of use. It worked for them, and they wanted to share it with the rest of North America.
The stigma of hemp and cannabis is fading
Lastly, the stigma surrounding hemp and cannabis is quickly fading. After the Farm Bill passed, the production of hemp products increased significantly. This coupled with recreational cannabis legalization in a number of states, and you have the perfect positivity storm.
More people than ever are dabbling in some form of cannabis or hemp consumption, mainly to reduce the symptoms and side effects of a physical and/or mental health issue. The new positive view is also shared among political lines with 54 percent of Republicans and 76% of Democrats supporting the legalization of marijuana.
The generational gap for legalizing marijuana has also been bridged. Here’s a breakdown by age range for the support of cannabis.
|AGE||Percent that supports cannabis|
Favorable views toward cannabis go a long way when it comes to CBD. Hemp-derived CBD does not have the psychoactive effects of THC, meaning that people can get alternative health benefits without the high. And if the stigma around cannabis is fading, the stigma surrounding CBD is nearly non-existent.
How to Sell CBD Online Efficiently and Legally
There are several ways to be successful selling CBD online. Choosing the right platform and building a strong brand presence are critical, as well as understanding the legal landscape of do’s and don’ts when it comes to traditional advertising.
Although CBD is legal, cannabis banking is still a hurdle for some. Because of this and other reasons, not all ecommerce platforms are open to hosting CBD sales. Fortunately there are two great options. WooCommerce has partnered with Square and Viva Wallet for payments, providing users a secure and easy way to checkout. Shopify is another fantastic option for all CBD e-commerce needs, and has created a detailed guide on how to sell CBD through their platform. WooCommerce is currently available to U.S. merchants only, but Shopify has certain extensions that can work with licensed Canadian sellers.
It’s no secret that the CBD market is saturated with thousands of brands competing for a top selling position. Since just about anyone can access CBD and add to common household, body care, and food products, it can be difficult to stand out. Buyers are becoming more and more savvy when it comes to selecting quality products, so it’s important to stand out in the marketplace. The best way to do this is by creating a trustworthy, transparent brand that prides themselves on creating efficacious products.
Consider the Hawaiian CBD company Mana Botanics. This is a company with strong ethics who are true stewards of their land. They are committed to utilizing pesticide free ingredients, grown locally and made by hand. Additionally, Mana provides certificates of analysis on every product they make, ensuring a product that contains what it claims, and is free of any harmful contaminants. Their brand upholds high standards that customers are seeking.
With strict packaging laws for cannabis manufacturers, many companies opt for a cheap option which is usually unrecyclable plastic that ends up in the landfill. Mana Botanics was the first CBD company to become plastic negative – meaning that they remove more plastic from their natural environment than they produce. For example, if a consumer purchases a bottle of Mana’s turmeric CBD oil, the company will process one pound of nature bound plastic waste in exchange.
Packaging has a massive impact in the CBD industry, but there are plenty of other ways to make sustainable efforts. Regenerative farming, using solar energy, water conservation, and effective waste disposal are all ways that brands can make efforts towards greater sustainability.
Barriers to Selling CBD Online
Selling CBD is unlike any other kind of retail. While it is legal, it is certainly still restricted. To protect your company, adhering to all mandates and regulations is non-negotiable as the CBD industry is watched closely when it comes to following the law.
Restricted Ad Platforms
Despite the fact that CBD does not directly violate Facebook’s advertising policies, the company continues to remove content and ban accounts that directly promote the sale of their CBD products through Facebook Ads. Similarly, Google Ads bans the advertisement of cannabis coffee shops, pipes, bongs, and weed, but does not specifically name CBD or hemp-derived products in their no-ad policies. Despite its legal status, Google will reject any text search ads that contain the acronym CBD. However, Google does allow ads when hemp keywords are used instead of CBD.
When it comes to SMS marketing, the rules can be confusing. While there is some leeway, it’s best to avoid text message marketing and not run the risk of hefty fines. Many wireless carriers, like T-Mobile, stand by the federally illegal status of cannabis. Regardless of state law, T-Mobile bans the use of text communication from business to consumer. Their justification is based on the Controlled Substance Act of 1970 (CSA) which strictly prohibits that any person uses written advertisements to receive, buy, or distribute any Schedule 1 substance, including cannabis products. Verizon, AT&T, and other wireless providers have similar bans in place, flagging any messages that trigger a perceived violation and revoking access to these accounts.
Without trusted test results, it’s difficult to know if a company is selling what they say they are selling. CBD is the latest “snake oil” product, and many companies looking to capitalize on the hype launched products that just weren’t safe, effective, or even made with actual CBD. Because of this, many buyers are hesitant to shop and it is taking a lot more effort from the trusted brands to rebuild those relationships and encourage buyers to try another product of higher quality.
In July 2020, SC Laboratories completed a study with the United Cannabis Business Association (UCBA) intended to test CBD products against their packaging claims. The samples included 17 randomly selected items and the results were shocking. Over 70% of the samples were not even hemp, or failed for contamination. Many did not contain dosage information, and some had levels of THC that may cause intoxication.
Any quality CBD product should contain the following information:
Certificate of Analysis (third party laboratory testing)
Dosage per serving and per total container
Full list of ingredients, including hemp or hemp-derived CBD
Name and address of the manufacturer
Expiration date and directions for use
Sophisticated brands are even including a QR code on packaging that will take the consumer to a website with information about where the hemp was grown, when the batch was made, and how many units were produced. This level of transparency is a sign of a reputable company.