If you’re thinking about selling CBD oil online, the best time to do it was yesterday, before everyone else started doing it. The second best time is now – the legal hemp industry is expected to hit $20 billion by 2024, and there’s no shortage of people eager to get a piece of that pie. Hemp-derived CBD can be legally sold in all 50 states – if you’re hoping to get in on it by starting your own CBD company, you’re going to have to work hard to stand out in a sea of trend-hopping serial entrepreneurs and CBD pyramid schemes (yes they are a thing), not to mention all the credible brands that have been in the CBD game for years who already have a loyal customer base.
None of that is to say you can’t be successful in starting a CBD business. I’ve worked with dozens of CBD companies over the last four years, and it’s definitely possible to carve out your space in the industry and find plenty of success. It’s also possible to tank after a few months because you didn’t do your research and, as many have learned the hard way, selling unregulated wellness products is not as easy as one might think.
I’ve considered selling CBD online plenty of times, especially because *gestures broadly* I literally have this cannabis blog right here so why not cash in and sell CBD, right? Because I need another internet project like I need another empty dispensary container, that’s why.
Instead, I decided to write this post for those of you who really do want to start a CBD business but don’t know where to start or how to stand out from the saturated market. If that sounds like you, keep reading because I’m about to share everything I’d do if I decided to sell CBD online.
(This post contains affiliate links, because a girl’s gotta eat).
How to Start a CBD Business
First things first – I have good news and bad news for you if you want to sell CBD: the bar is low. That’s the good news because it means it doesn’t take a lot to be better than a lot of your competition. That’s also the bad news because it doesn’t do your credibility any favors when you say you sell CBD online and people think it’s a scam. Anyway, if you’re cool with all that, here’s how to start a CBD business that’s better than everyone else’s:
Do Your Plant Research: Learn How Cannabinoids and the Endocannabinoid System Works
Do you know how many CBD oil salesmen are out there claiming CBD will cure your depression, clear up your acne, fix your credit score, and find you a boyfriend yet couldn’t tell you where the endocannabinoid system is located? Too many! Don’t be that guy. If you’re going to sell any type of cannabis product, my first request is that you do your research on what cannabinoids are, how they interact with your body, and how CBD may help with common ailments and conditions, mostly those related to pain and inflammation. Legally, you cannot make any medical claims about your product because there is no FDA regulation or approval, but you can arm yourself with as much knowledge as possible about the plant and how it works so that you can help your customers make informed decisions about whether or not it’s right for them. Here are some places you can start:
My Full Guide to Cannabidiol (CBD)
THC, CBD, and 9 Other Cannabinoids You Should Know About
16 Books That Will Teach You Everything You Need to Know About Cannabis
11 Educational Programs to Help Kickstart Your Career in Cannabis
Learn How CBD is Made
CBD oil is the base of all CBD products. It’s made by using a combination of solvents, extreme temperatures, and pressure to extract cannabinoids, terpenes, and flavonoids from raw hemp or cannabis plants into an oil carrier, typically MCT/coconut oil. Some of the cheaper extraction methods involve butane, hexane, or propane, which can leave harmful residue in the final product. These methods also tend to yield lower amounts of cannabinoids, especially if they go through additional refinement to remove impurities.
The safest extraction method is supercritical CO2 extraction, which uses pharmaceutical-grade ethanol, high pressure, and a cold environment to extract the plant compounds without leaving any junk behind. Any products you source should be made using supercritical CO2 extraction above any other method.
Know the Difference Between Full Spectrum CBD vs Broad Spectrum CBD vs CBD Isolate
There are three common types of CBD oil on the market: full-spectrum, broad-spectrum, and CBD isolate.
Full-spectrum CBD oils contain more than just CBD – they also contain other important plant materials like terpenes, flavonoids, and other cannabinoids that work together to create what is known as the “entourage effect” in the endocannabinoid system. These oils are usually labeled “full spectrum” or “whole plant”.
Broad-spectrum oil: Broad spectrum oils contain everything the full-spectrum oil contains except for THC. This is what you want if you’re looking for an oil with non-detectable THC levels.
CBD isolate is a fine powder containing cannabidiol and no other cannabinoids or plant ingredients. It is usually consumed through vaping, or by adding it to food and beverages.
Research Scientific Studies to Back Up Your Product
Here’s the problem with CBD right now: The only regulation out there is that in order for a CBD product to be sold as “CBD Oil”, it has to contain less than 0.3% THC, which is the psychoactive cannabinoid that gets you high. You have to tread lightly when it comes to making any claims about what your product can do.
The best way to back up your product with science is to search the PubMed database for keywords like cannabidiol, CBD oil, and cannabis to find medical research and studies that you can share with your customers. Here are some credible studies on CBD and human health that I recommend checking out for starters:
Cannabinoids as Novel Anti-Inflammatory Drugs – This is from 2009 but the information is still valuable in helping to understand the relationship between cannabinoids and inflammation.
Cannabinoid Delivery Systems for Pain and Inflammation Treatment – This study from 2018 gets into great detail about cannabinoids and how they work throughout the body. If the CBD you sell uses nanotechnology to increase CBD absorption, you’ll want this study on hand for reference.
Sourcing CBD Products & Selling Online
You don’t have to grow your own plants or partner with a farmer to start a CBD company. You don’t even have to make your own CBD oil. There are plenty of CBD manufacturers who have wholesale, private label and drop shipping opportunities available for people interested in selling CBD products online. Here are some tips for how to source your CBD products:
Choose Your Selling & Fulfillment Methods
Do you want to sell products labeled with your own branding, or do you want to sell other company’s products under your own storefront? Do you want to ship products yourself out of your own warehouse (or living room), or do you want to pay a company to do it for you? All of these options are possible, it just depends on how much time you want to spend doing things yourself and money you’re willing to spend to outsource.
Wholesale CBD Company – This is where you buy another company’s products at a discounted price so you can resell them on your own e-commerce website. You buy the products in advance and ship them to your customers as orders come in. Most companies have wholesale order minimums. Sunday Scaries offers their products wholesale and they’re a popular (and well-branded) company.
Private Label CBD Company – This is where you buy another company’s products, but instead of selling the product with their label, the company labels it with your branding and will often ship it right to your customer for you (aka drop shipping). This is what most CBD companies are doing as opposed to growing/extracting their own products.
Third-Party Fulfillment – Instead of shipping products yourself, you can use a third-party fulfillment company like ShipBob to store and ship your products as you make sales. They are willing to work with CBD companies and integrate with Shopify, so you can almost entirely automate your business this way.
Decide What Type of Products You’d Like to Sell
CBD is sold in many different forms and it’s up to you what you’d like to sell and how you’d like to market them. Since CBD has the potential to benefit nearly anyone, you can pretty much center your brand around any demographic who could benefit from CBD products.
Popular types of CBD products:
CBD oil tinctures – The most popular CBD product is the classic tincture, which is typically just cannabinoids, terpenes, flavonoids, and carrier oil. People like it because it can be measured to a precise dose and taken as-is, or added to any type of food or drink.
CBD gummies & edibles – The second most popular type of CBD product is probably the CBD gummy. These are perfectly measured doses for people who want to know exactly how much they’re consuming – usually 5-15 grams of CBD per gummy. CBD also comes in the form of other types of edibles, like chocolates.
CBD pills – An even simpler type of edible that’s usually a capsule filled with a precise dose of oil tincture.
CBD topical creams & salves – Topicals are becoming more popular, but there is not a lot of data out there to suggest they have a significant effect on pain or skin conditions. Still, people seem to love them.
Find a Quality Supplier
There are plenty of CBD companies out there eager to have you as a wholesale or private label customer. Regardless of who you choose, make sure they meet the following criteria:
- Ideally, they grow their own organic, pesticide and herbicide-free plants or have a close relationship with their farmers
- They use supercritical CO2 extraction with no hexane, butane, or other harsh chemicals/solvents
- They lab test every product for purity, potency, residual solvents, pesticides, heavy metals, etc., and include test results in the box and on their website
- Their products contain less than 0.3% THC (it’s federally illegal to sell a CBD product with more than that)
If you are in a state where medical marijuana is not legal, make sure your products are derived from hemp, not marijuana plants (even if you’re just selling online, it’s better safe than sorry)
Where to Buy White Label & Wholesale CBD Products
Joy Organics is one of the most popular sources for wholesale, private label, and even blank bottles of CBD oil. Their line of products includes CBD tinctures, soft gels for day and night, energy drink mixes, multiple types of topicals, and dog chews and tinctures. They have multiple options for selling their products:
Joy Organics Wholesale – There is a $250 wholesale order minimum. This is where you’ll buy products upfront under the Joy Organics brand and resell them in your online store, in your brick and mortar storefront, wherever.
Joy Organics Private Label – Buy her products, put your own brand’s labeling on them and sell them as your own. The Joy Organics team will ship your orders for you in 7-10 business days. There is a $2500 upfront order minimum.
Joy Organics blank bottles – Buy blank bottles, add your own labels, and sell them online or in your store. There’s a minimum order of $1000.
Obtain Proper Licensing
In order to legally purchase many wholesale or private label products, you need to have a registered business license in your state. You can find out how to do this by looking up your local government website to find out what’s required to form an LLC and obtain a resale license. Every state is different and I’m not a lawyer, so your best bet is to do your research on what business licenses, resale licenses, and permits are needed in your state.
Find a Selling Platform & Payment Provider That Allows CBD Sales
You can’t sell CBD oil on traditional online marketplaces like Amazon, Etsy, or Ebay, so you have to work a little harder to set up your online storefront. Your best option is to set up a Shopify store. Shopify has a whole department specifically dedicated to CBD business owners, which includes integrations with payment processors that work with cannabis brands and access to all of Shopify’s apps. Sign up for a free 14-day trial here.
Order Product Samples and Test Them Yourself
You should always buy from a supplier that provides third-party lab testing results, but I also highly recommend you test some samples yourself to ensure the information (and product) they’re providing is accurate, ESPECIALLY if you plan on buying private label and selling them under your own brand name.
You can send products to third-party labs such as Botanacor Laboratories or Sante Labs. One benefit to CBD’s popularity is that more labs are popping up around the country that will test cannabis and CBD products, so a simple Google search for CBD testing labs near you should put you in the right direction.
If you’re thinking you don’t want to spend the money doing this, remember that it’s cheaper to test a couple of samples upfront than to hire a crisis PR manager when a ghost shopper does it for you, finds out your CBD contains cadmium, and then writes about it on their blog.
Creating & Marketing Your CBD Brand
Once your CBD store is up and running, you’ll spend most of your time marketing your brand and getting the word out. Here are some things you can do to enhance your marketing efforts in this ever-evolving, non-traditional market:
Provide Detailed, Transparent Labeling
The packaging and labeling of your CBD products is essential to a credible, trustworthy, and Instagrammable brand. You can easily make your own stylish labels in Canva if you’re not a natural designer, or you can hire a professional to create some branding for you. Avery has a detailed post about what information to include on your CBD labels, and they will even create and print the perfectly compliant label design for you.
Start an Affiliate Program
When you sell any cannabis-related product, you can’t go the traditional route of advertising through Google or Facebook Ads. I can’t even advertise my weed t-shirts, that’s how strict they are about it.
Instead, put your promotional power into the hands of your customers and influencers with an affiliate marketing program. With affiliate marketing, people sign up and get a custom link to use when they want to share your products. If someone buys a product through one of those links, the affiliate gets a percentage of the sale – usually 10-25%, with a 30-60 day cookie window. This is a great way to get around advertising prohibitions with cannabis-related products while still encouraging people to get the word out.
If you’re using Shopify, they have apps that will set up and manage a whole affiliate program for you, right on your website. You can also join a larger company that hosts various affiliates under their website, such as RevOffers and CannAffiliate – both are in the cannabis and CBD industries.
SEO is Your Best Friend – Learn It and Use It
When you can’t pay to have Google or Facebook market your products, you have to work extra hard at doing it yourself, which is why search engine optimization (SEO) is an essential skill if you want to survive in this (or any) online industry.
SEO sounds technical and intimidating to a lot of people, but all it requires is a thorough understanding of who you’re trying to reach and what they’re most likely to type in the search bar. Your goal is to use the right keywords in your website copy that will tell Google you’re the search result they need to see first.
Create Helpful & Informative Content
When you’re selling CBD online, words are the most powerful tool in your arsenal. This goes for any industry – we say Content Is King for a reason – but it’s especially king in an industry where you have advertising restrictions, like cannabis.
Google likes websites that regularly have new content and words for them to sift through and add to their rankings. Publishing blog posts is the easiest way to have fresh content on your site regularly. Write a post a week answering customer questions, share your experience with your products, create recipes and how-to guides, the possibilities are endless. Use this space to differentiate your brand from your competition, establish your voice, and get people convinced that your products are worth buying.