In light of legal changes in the cannabis industry over the last few years, more products made from cannabidiol (also known as CBD) have appeared almost overnight. CBD is popping up everywhere, in drinks, supplements, pet treats, and skincare, just to name a few. With so much room for growth within this industry, it’s no surprise that more people want to learn how to sell CBD online.
While CBD products can be a profitable venture, it’s crucial to do your research beforehand. Cannabis regulations vary between states and are changing frequently. Plus, there are a lot of unique factors that go into selling CBD you need to be aware of to compete in the market. Below we’ll explore the CBD market and provide tips to keep in mind if you’re curious about how to sell CBD online.
What Exactly is CBD?
Frequently you’ll hear people describe CBD as “cannabis without THC (tetrahydrocannabinol).” This is partially true, but that doesn’t provide the full picture of what CBD is.
CBD is an active component of cannabis, just like THC, and is a small, effective part of the many components, all known as cannabinoids, that make up the whole plant. While THC has psychoactive properties, CBD (a different cannabinoid) does not.
Science shows it possibly reduces psychoactivity, which is why CBD is being studied to help with anxiety, chronic pain, insomnia, and more. This is also why it’s being sold legally, even by large retailers like Walmart in select states.
Predicted Growth of the CBD Market
While oils are the first product that comes to mind, the market has increasingly expanded to offer a variety of CBD items. In 2021, consumers can access:
- CBD beverages
- Water soluble drink powders
- Edibles
- Vaporizers
- Creams & lotions
- CBD capsules
Plus, it’s not just being used for people. The CBD pet industry is also beginning to thrive. As of 2019, the CBD pet market was valued at roughly 27.7 million, with more growth to come. It’s amazing considering this market didn’t even exist a few years ago.
Predictions show the entire CBD market is poised to grow and reach 1.8 billion dollars by 2022. It’s currently used most in food and cosmetic markets, although pet and pharmaceutical markets are expected to grow exponentially in the upcoming years.
The Legality of Selling CBD Oil
Figuring out how to sell CBD online and fulfill orders looks different in every state, especially when it comes to rules and regulations. You should have a firm grasp of federal and state laws to make sure your product complies with all applicable selling and CBD shipping regulations.
Please note that the following content is an educational overview and not legal advice. We recommend consulting with a legal advisor for pertinent information on CBD regulations affecting your operations.
Federal Laws Regarding CBD
In 2018, Congress legalized hemp production across the United States through its Farm Bill. This was huge for CBD producers since their product comes from industrial hemp.
That being said, the Federal Drug Administration (FDA) does not regulate CBD in food, beverage, or ingestible products yet. Visit the FDA website for the latest information on CBD regulations or to monitor any updates.
Retailers can still sell edible CBD items depending on how they label and market the product. The way they sell it must also be compliant with state and local laws, which we’ll discuss next.
State Laws Regarding CBD
State laws regarding CBD vary widely. Some states permit CBD as a food or dietary supplement, while other states completely prohibit CBD sales. A handful of other states are also in the middle, as they haven’t created clearly-defined legislation around it yet. This is why it’s beneficial to discuss your venture with a legal advisor before you start.
How to Become a CBD Distributor
Ready to start figuring out how to sell CBD online? Like any other business, there are a few steps you’ll need to take before you’re ready to start shipping CBD products to your customers. Let’s take a look at how you can start.
Step 1: Obtain a Business License
Keeping your business objectives in mind, you’ll need to first apply for a business license to suit your plans. Having one will allow you to operate legally on the local and federal levels. From there, you’ll want to register your business and work on setting everything up, hiring staff, or finding investors as applicable.
Step 2: Find a Reliable CBD Supplier
Next, you’ll want to find a reliable supplier who can give you good quality CBD to use in your products. It’s important to make sure your partner is:
- Tracing the plant over its complete lifecycle
- Providing transparent information about the product
- Practicing the FDA’s current good manufacturing practices (cGMP)
- Testing the CBD product with reputable, third-party labs
If you’re using a supplier, you’ll also possibly need to obtain a resale license. Depending on what company you choose, they’ll be able to walk you through what documentation they need, including licenses.
Step 3: Set up a Website
Navigating where you can sell your products will be challenging. For example, places like Amazon or Etsy don’t allow third-party CBD sellers. However, some find workarounds by labeling it as a “hemp” product instead.
Alternatively, setting up your own website is worth the investment as it can also give your brand authority. Some online website (both self-hosted or SaaS) platforms that will let you sell CBD include:
- Shopify
- WooCommerce
- BigCommerce
- Magento
- WordPress
Building a website and self-hosting is more costly and requires specialized development skills, so if you’re looking for a faster launch, consider using a SaaS platform like Shopify or BigCommerce. Both allow you to still tailor the site to your brand, but make set-up a lot easier and faster. That way you can devote more of your time to product and sales development.
If you use a SaaS e-commerce platform, it also makes it easy to seamlessly integrate your shopping cart with a 3PL provider if you elect to get outside help with inventory and order fulfillment. This can further free your team to focus on the product itself and not time-consuming order logistics.
Step 4: Find a Payment Processor that Approves CBD Orders
Since CBD regulation is so varied, you’ll need to do your research to find a payment processor that will accept your sales. For example, in their terms for use, PayPal specifically states they don’t permit CBD sales through their platform.
Payment processors that allow CBD sales also may have specifications, such as containing under a certain percentage of THC (usually less than 0.02%). A few payment platforms you can use for CBD sales include:
- USAePay
- NMI
- Pay Kings
- Easy Pay Direct
- Pay Wize
- Centurion Payment Services
For more in-depth information, BigCommerce has a great article discussing some CBD-friendly payment platforms in depth.
Step 5: Make Sure Your Orders Look Good
Last but not least, you’ll want to determine how you’ll process and package your orders. You’ll need to make a good impression on your new customers the minute they receive their order.
If design and packaging aren’t in your wheelhouse, consider partnering with a specialty contract packaging services group to figure out the best solution for your new product line. That way you can be sure it looks good at every stage, from delivery to unboxing.
Need help launching a new CBD product line or fulfilling your growing volume of orders? Jay Group offers a team experienced in design, CBD fulfillment, and much more. Contact our team for a free consultation to learn how we can support your business logistics.
