CBD products have been gaining a lot of interest nowadays. Most CBD oil distributors have been active in the market due to continually evolving regulations about the cannabis industry legalization. Navigate the legalities of selling CBD oil online in this complete guide to marketing CBD products and shipping ecommerce store orders. The selling and buying of CBD products are legal in Texas and are approved by the state health department of Texas in the year 2019.
Sell CBD Products: A Comprehensive Guide on How to Legally Sell CBD Online
CBD products have been gaining a lot of interest nowadays. Most CBD oil distributors have been active in the market due to continually evolving regulations about the cannabis industry legalization. Are you interested in getting in selling CBD online? This article will guide you through the entire process – from licensure and marketing to order fulfillment and financing.
CBD for Business
Entrepreneurs who focus on CBD Products have infused it into almost everything. The growing popularity of the product is taking the world by storm. You can find CBD for humans, for pets, in your coffee drinks, bath bombs, body creams, chapstick, and a whole lot more. The market sales of CBD in the US are expected to grow by nearly $2 billion by 2022. CBD-infused products have been accessible to the public, and because of the continuous evolution of the industry, they will invent more of these products.
However, before you start to sell CBD oil, you should first know how to sell CBD legally. Knowing things that you need to know and what to expect will help you successfully market your CBD products. Keep reading to find out how to start a CBD business.
What Is CBD?
Cannabidiol, also known as CBD, is a natural substance used to help with various health conditions. It became popular through CBD-infused products like oils, edible food such as gummies, body products, and more.
It’s different from other cannabis because this will not make you high. The WHO (World Health Organization) has stated that CBD has no effects on any abuse and that there is no evidence of public health-related problems associated with its use. With this information, CBD has gained popularity in the market.
You might be one of the people who are thinking, “How can I start my own CBD oil company?” Well, there are few things you need to know before starting the business. Deciding to enter the CBD industry could be difficult and draining, especially if you didn’t research properly beforehand. Nonetheless, with hard work and properly handling the business, you might achieve your goal.
Legal Terms for a CBD Distributor
As we all know, the legalization of CBD usage is still under debate across the world. In the recent issue of the 2018 Farm Bill, the legalization of hemp production across the US was approved; that’s why CBD products are now available to the market. However, serious restrictions on how companies are producing it are still present. Here are a few laws that you need to know:
In the US, any type of cannabis plant should contain no more than 0.3% THC. Take safety precautions by being aware of the state of legalization of cannabis products because laws can always change at any time. In addition to this, keep in mind that the Food and Drug Association has also stepped in to call out unapproved products with false health claims.
Statewide regulations on CBD legality are different in each state. Some states allow marijuana-produced CBD, and there are also that only allow the standard choice in this industry, the industrial hemp-produced CBD. The THC level of industrial hemp-produced CBD is not high and is accepted nationally. For extra precaution, try to contact some local representatives to know which type of CBD is allowed in your target state.
How to Sell CBD Online
If you’re interested in selling CBD products, you might be thinking about where to put up listings for your hemp oil for sale, CBD extract for sale, or other business products of the same variation. Online shopping is one of the most popular ways to buy products from the comfort of your own home. You can sell CBD oil products through Shopify, Amazon, or other online shopping platforms. Setting up your shop online and starting selling online is a great way to establish your brand. Here are a few things to take note of before selling CBD online:
People who are new to the CBD business might think, “Is it legal to sell CBD?” or “Do you need a license to sell CBD Products?” The answer to both questions is yes. To legally sell CBD products, you need a pair of licenses such as a business license and a resale license.
A business license is obviously required for every business. Researching your preference on the business license on your local government website is a great way to know which type will fit your business more. Commonly, small businesses go for an LLC, and it usually costs around $100.
You will also need a resale license if you plan to purchase your products from wholesalers or distributors. Resale license permits are under the state, so handling this license can vary state-to-state. Try to research the requirements on your state ahead of time so you’ll be aware if you still need a resale license and how you can get one. Getting these licenses is important, and you should not skip this step when starting a CBD business.
Look For a Certified Supplier
A legit supplier of high-quality CBD products is a vital part of the business. In addition to this, they must be certified to sell by the state or nationally. Getting regular tests by third-party companies is required to ensure the quality of the products because it will help you produce high-quality products to achieve your target market.
Accept and Ship Orders From Customers
Whether you build your website or list your products through online shopping platforms, you’ll be needing a warehouse system for your CBD products to effectively manage the inventory. You can start accepting and shipping orders from your home if you’re starting small. However, if your brand is starting to grow, you might need to expand your space and sign a warehouse lease.
With your warehouse expansion, you should also ensure that your shipment methods should also level up. You can do this by sourcing for the best order fulfillment company that will fit your terms and preference when handling the products.
How to Maintain High CBD Online Sales
CBD products are no longer limited in our current time, and you can easily spot them in your local drug stores or online stores. It’s important to know that once you’re aware of how to sell CBD oil online, you need to start making excellent marketing strategies that will help you maintain high sales and outdo your market competitors. Making sure that consumers will buy from your brand instead of the competitor’s product should be part of your priority. So how will you do it?
Tip 1: Produce High-Quality Products
The popularity of CBD products is why many businesses have been popping into the industry nowadays. Aside from the fact that some business-minded people produce low-quality fake CBD products, consumers have been ill severely due to these products. Knowing this, it’s now your part to source proper high-quality products that will make consumers trust you and your brand.
Once you’ve started producing high-quality products, there will be a high chance that your consumers will help you market it by telling their friends and family members. This way, your products will become more popular and will also help your consumer’s health at the same time.
Tip 2: Know How CBD Marketing Works
It’s important to know how to market CBD products. There might be advertisement restrictions with social media networks that you should note. Make efforts in marketing your products by using various marketing strategies such as e-mail, newsletters, discounts, online stores with easy access for consumer’s comfort, and paid advertisements.
Tip 3: Interactive Connection With Consumers
Creating ways to actively interact with your community will help you earn consumers’ trust and know their needs and wants when it comes to the product. Actively interacting with your consumers will help you create a great community and foster good relationships. This strategy will differ from other brands because you’ll be the one in charge of knowing and understanding your community as well as meeting their standards.
Tip 4: Wholesale Selling
If you’re wondering how to become a CBD distributor, this will be the answer. Focusing on business-to-business will help you achieve and exceed your target sales. It’s great to start selling CBD wholesale because you’ll be interacting with fewer people rather than running your online store and spending energy on attending to each product inquiry.
How to Sell CBD Online: Information and Tips on Selling CBD From Home
The cannabis industry continues to legalize and explode before our eyes. And it didn’t take long for its more legal archetype, Cannabidiols (otherwise known as CBD), to become a hot commodity.
You can find CBD products in nearly every large retailer these days, including Walgreens, CVS, Ulta, and even teen brands like American Eagle and Abercrombie & Fitch. But just as fast, it’s become a viable ecommerce solution for those who want to sell and buy it online.
If you follow ecommerce product trends, you know that CBD is everywhere — for humans, for pets, in your drinks, in your chapstick. It seems as though there is CBD-infused everything.
Of course, it’s not as simple as throwing up a website and watching the buyers flood in. If you decide to sell CBD at all — let alone online — you’ll face a complicated industry with complex legal and marketing challenges.
Before you start selling CBD products online, you should know exactly what to expect and how to prepare. Read on to get the full rundown on how to navigate building a CBD income stream in today’s climate.
Note: This article is solely for informational purposes and does not constitute legal advice.
What is CBD?
You may hear CBD being described as “cannabis oil but without THC,” and that’s close but not entirely accurate. CBD, or Cannabidiol if you’re using the scientific term, is an active component of Cannabis — a small, effective part of the larger whole.
Cannabis is made up of different cannabinoids. Cannabidiol is one of them. According to users, this is the ingredient that helps alleviate an array of symptoms, including pain, anxiety, and even epileptic seizures.
What helped CBD boom into its own segment of the larger cannabis market though is the fact that it doesn’t contain THC (tetrahydrocannabinol). THC is the ingredient in cannabis that causes the widely-known psychological effects: the euphoria, short-term memory loss, increase in appetite, paranoia, and more.
THC is the ingredient that many governments around the world have fought to keep illegal, whereas CBD is the ingredient that simply acts as a natural medicine without any psychological effects.
Because of this, CBD is ahead of the game in the cannabis industry in the sense that it’s more widely accepted and legalized — in most cases.
The CBD market is booming
The number one rule of going into business is “Go where the market is.” One clear way to tell that is by gauging where consumers are already spending their money.
You might look at the explosive evolution that the CBD industry has undergone in the past couple of years and find yourself intimidated by market saturation and competition. Fret not — there are still plenty of pieces of the pie for everyone who wants to try and partake.
Just how big is the opportunity, exactly?
The CBD market is worth billions
The CBD industry is projected to be worth $20 billion by 2024. To put this into perspective, ice cream was only worth $2.27 billion in 2018. CBD is well on its way to being a household item for frequent buyers who will come back again and again as long as you can fulfill the product.
But it’s not that simple. What about the legalities of selling CBD products?
New legal terms for CBD oil
CBD has definitely undergone its share of legalization battles and still has some opposition, but there has been major progress along the way. The 2018 Farm Bill legalized hemp production across the US, which is great for sellers because CBD is produced from industrial hemp.
The bill essentially states that as long as your CBD product has less than 0.3% THC in it, you’re free to sell it, with caution.
Legality of selling CBD
For obvious reasons, the legalization of CBD has been widely disputed across the board. As long as it’s a controversial topic, you’ll want to prescribe to your favorite news channels and set up alerts for updates to CBD laws. With that being said, a plethora of laws have been put in place that you need to be aware of, both federally and at the state-level.
In the United States, there aren’t any concerns at the moment other than making sure your products contain less than 0.3% THC. CBD is otherwise legal nationally. It is recommended that you stay aware of the state of legalization as laws can always be overturned.
It’s worth noting that the FDA has stepped in on occasion to call out unapproved products that market false health claims.
Statewide laws will of course vary by state. Some states allow marijuana-produced CBD, while others only allow industrial hemp-produced CBD. Your best bet is to simply sell the industrial hemp-sourced CBD, as it won’t have high THC levels and is accepted across the nation. Otherwise, you’ll want to get in touch with local representatives or research laws in your state to see what you’re allowed to sell.
From that information, build a list of products that you know are legal for you to sell and stick with your regular inventory to avoid any legal mishaps.
How to start selling CBD oil online
Once you’ve dialed in your legal allowances, it’s time to start setting up shop. There is a simple game plan you can follow to get set up and start selling online. From there, you can start refining your product, marketing, and ecommerce fulfillment strategies to grow your business.
1. Obtain licenses
In order to sell CBD, you’ll need to get a couple of licenses. One is a business license. Usually, small businesses go for an LLC. Research your preference at your local government website. Registration usually costs about $100 in most cases.
You’ll also want to get a resale license if you plan to purchase your product from wholesalers. Much like business licenses, resale licenses and permits are handled at the state-level, which can be handled differently state-to-state. Discover what your state requirements are to determine if you need a resale license and how to acquire one.
2. Find a certified supplier
You’ll want to find a reputable supplier that will sell you high-quality products (such as tinctures, oils, hemp products, and more) and is also certified to sell by the state or federally. They’ll also need to get regular tests performed by third-parties to make sure the quality is assured and you’re selling quality products. Many CBD companies have their own hemp farms.
3. Build your website
Now that you have the paperwork and selection process out of the way, it’s time to build your website. First, you need a domain name (or a “www.yoursitename.com” web address).
One of the most popular platforms to buy domains from is GoDaddy.com. But you can just as easily get your domain name from most web building platforms. There’s no shortage of platforms out there that make it incredibly easy for you to build an ecommerce site.
For example, BigCommerce offers full-featured solutions for merchants of all sizes, with no additional fees for selecting your own payment gateway.
Be careful to cover the terms of service and community policy to make sure you’re advertising and selling your products within the boundaries set by the platform.
You’ll need to find reliable credit card payment processing, which can be tricky for CBD products as the payment gateway landscape has been changing a lot in this industry.
CBD is not currently approved by all payment processors (e.g., PayPal), so you’ll need to make sure you’re working with a company that can do this. Note: Credit card fees with CBD gateways may vary by merchant based on a risk assessment done by the processor.
4. Market your CBD products
Now that your website is live, it’s time to bring in the buyers. You might think the “build it and they will come” mantra rings true here. Sorry to say, that’s not the case.
In a land where it’s difficult to market CBD using a lot of popular methods (as Facebook Ads, YouTube Ads, and other common ecommerce marketing channels ban these products from their advertising platforms), there are still two viable options that have the potential to bring in a lot of profit if you play your hand right.
The first is SEO, or the art and science of getting Google to rank your site above others in search results to show potential buyers your website first. In order to succeed with SEO, you’ll want to get an SEO professional to audit your site. They can make sure that Google views things like your site speed, meta data, image optimization and other components favorably. These things help Google trust that your website is worthy to show visitors.
You’ll also want to start a blog, master the skill of keyword research, and put out fresh content that captures the intent of what people are searching for. Make sure you’re targeting terms that bring in potential buyers and not just visitors looking for information on the topic.
Once you start getting organic website visitors through your SEO efforts, you’ll want to start an email list and use your website to grow it. In exchange for an email address, you can offer discounts or even free informational PDFs and trainings on CBD.
When visitors provide their email address for your freebies, they’re giving you permission to nurture the relationship and inform them of more promotions moving forward (e.g., having a sitewide sell for 4/20 or a Black Friday/Cyber Monday deal).
You can also look elsewhere and try partnering with marketplaces like CBD Oils, Ganjapreneur, and Pot.com, or CBD-specific ad platforms like Traffic Roots.
5. Fulfill and ship customer orders
You’ll need a system for warehousing your CBD products and managing inventory over time. When you’re first getting started, this may be done in your home. After experiencing growth, you’ll want to expand into a fulfillment center by either signing a warehouse lease or outsourcing fulfillment.
Just make sure your fulfillment technology syncs up well with your ecommerce platform, payment processor, and other software. For example, ShipBob is tech-enabled fulfillment company with warehouses across the US to help you spend less time worrying about packing and shipping orders and more time on growing your brand.
“Our fulfillment is on autopilot. ShipBob saves us so much effort, and the opportunity cost savings has been substantial. ShipBob’s platform is easy to use and navigate, the interface is intuitive, and the analytics are very clearly laid out. Today, our health and wellness brand sells three CBD products in the United States.”
Yannick Crespo, Co-Founder & President of Pot d’Huile
Take CBD company Nature’s Ultra. Last year, they started to experience a surge in orders. They were managing CBD shipping and logistics themselves but didn’t understand just how massive and difficult retail fulfillment was. They were getting so deep into the logistics and supply chain side that they didn’t have time to focus on their core products.
They knew they’d be doubling and then quickly tripling their order volume, so they wanted to get help on the front-end to ensure a long-term relationship with a lot of room for scalability. They searched for companies that could give them something similar to Amazon’s delivery capabilities for their website orders, so they partnered with ShipBob.
“Now that we’re working with ShipBob, we can easily ship to all 50 US states with ease. We use ShipBob’s fulfillment centers in Dallas, Texas, Chicago, Illinois, and Bethlehem, Pennsylvania. They help us to maximize our shipping and ultimately our growth potential.”
Andrew Hardy, COO of Nature’s Ultra
Challenges of selling CBD online
Once you get your CBD store up and running, you will likely face a new set of challenges as you grow. Here are a few considerations to help you break through the crowded space and set your business up for success.
Standing out in the market
In a saturated market, you must consider your competitors. Think through the following:
- Which keywords are your competitors ranking for and how can you write better content to outrank them?
- What kinds of products are they providing and how can you stand apart?
- What can you do differently from your competition that your customers will love?
Think through the entire customer experience to uncover where you can differentiate, whether that’s selling unique products, providing custom packaging or a branded insert, or even offering free 2-day shipping.
As mentioned earlier, you’ll want to go through the proper state channels to figure out what your regulations are so you can abide by them. Your best bet is to take inventory of any regulations, rules, and restrictions, and create company policies around them to make sure you’re following them. With the industry continuing to evolve, be sure to stay updated on these regulations.
As selling CBD becomes more widely accepted, you may eventually be able to sell internationally, ship to other countries, and build out an international shipping strategy. In the mean time, don’t ship products to destinations where they’re not allowed.
Without the proper support and systems in place it can become really difficult to fulfill your orders especially as demand picks up. When you can no longer go at it by yourself, you’ll need to find a solution that will ensure you’re able to deliver the products your customers buy in a timely fashion.
“We place considerable expectations and pressure on shipping so we can get close to what Amazon does. With ShipBob, 100% of our orders are going out via 2-day shipping. We see that people are far more likely to order and keep ordering from us when 2-Day Express Shipping Program is an option.”
Andrew Hardy, COO of Nature’s Ultra
Ecommerce shipping can be very challenging and order fulfillment boils down to three common options. What works for one business may be cost-prohibitive or inefficient for another.
There are plenty of CBD brands that fulfill orders by themselves. They keep inventory at home and run to the post office, or use local warehouse space to pack and ship each order by investing in the infrastructure and running operations. This option is often best when getting started or if order volume isn’t too much to handle. As your store grows, you need to scale seamlessly and find a more streamlined solution.
Dropshipping is when a manufacturer handles both product procurement and shipping orders. All you do is market the product without touching inventory. This can work well for some products, but is often difficult for CBD oil because you have less control over quality, product selection, and speed of shipment.
3PL (third-party logistics) solutions
3PLs are a happy medium as you don’t have to purchase land or hire a team to pack boxes, but you still have control over selecting a manufacturer. The 3PL is the middleman that stores your inventory close to your end consumers, while helping you quickly and seamlessly get the products shipped out.
“We were shipping a dozen orders per day, and now we ship hundreds per day. ShipBob has allowed us to scale up and become successful — we have gone from $70,000 in sales in 2018 to over $7 million in sales in 2019. When it comes to delivery, accuracy and timing are the most important to us, and ShipBob helps us execute on that.”
Andrew Hardy, COO of Nature’s Ultra
Starting an online CBD business might have some legal and marketing challenges involved, but with the growth of the industry and continued legalization, now is the time to get in. Since it’s still a young industry, you can still get ahead of the curve.
Already running a CBD store or anticipating a huge launch? Get in touch to learn how ShipBob can handle your CBD fulfillment so you can focus on your brand — not packing boxes . Request fulfillment pricing today.
Kristina is the Director of Marketing Communications at ShipBob, where she writes various articles, case studies, and other resources to help ecommerce brands grow their business.
Do You Need a License To Sell CBD Products in Texas
Cannabis is approved by the FDA as a prescription drug and according to CBD federal laws, these prescription drugs cannot be added to any food, dietary supplements, or cosmetics. The ingredients of food, dietary supplement, and cosmetics are also regulated by the FDA. The selling and buying of CBD products are legal in Texas and are approved by the state health department of Texas in the year 2019. The cannabis-derived from industrial hemp is legal and is removed from the list of schedule I controlled substance list.
Under the Texas controlled substance act hemp is removed from the definition of marijuana and is now legal for buying and selling but it should come from a licensed hemp grower or producer. Another important thing is the content of THC in CBD products. The legal range is less than 0.3% of THC.
Is the License Required to Sell CBD Products in Texas?
A house bill 1325 was signed by the Governor of Texas in the year 2019 that permitted the manufacturing, production, sale, and retail of industrial hemp-derived CBD products. The products include those for human consumption like CBD.
The retailers and distributors who want to sell the cannabis are allowed as per section 11 of House Bill 1325. For the selling of CBD license is required as per the current CBD Texas laws. For selling it is to make sure that consumable hemp products are safe for consumption and the products sold do not contain 0.3% of the THC content
Yes, a license is required to sell CBD products in Texas. Those who wish to start a business selling CBD products are required to register with the Department of state health services.
Application For Licenses to Sell CBD Products
Department of state health Services provides an online platform for the registration and license sing application for the retailers and distributors for CBD products. These applications are submitted in the business and professional license category. When you apply for licenses then there is a set of documents that are needed to submit with the application.
How To Get a License For Selling Consumable Hemp Products?
- First, you need to submit the documents online at the Department of state health services website for the license to sellCBD products in Texas.
- The fingerprint submission process will start
- You will get the email from the fingerprint service code of Texas
- From the email, you need to print the FBI authorization form and fill it
- Then your fingerprint submission appointment is a scheduled and this can also be done using the phone number as well
If you are to work from various locations in the state then you need to add them all during the registration process
Role of the Department of State Health Services
Department of state health services Texas has the responsibility of controlling the manufacturers, resellers, and distributors of food, cosmetics, and medical manufactures of CBD derived from hemp. The local jurisdiction also regulates the sale of CBD products but does not prohibit the sale of these products. The Department of state health services Texas also do not regulate the private possession and use of food, dietary supplement, and cosmetic product. House bill 1325 has also designated some roles under its bill like
- For consumable CBD products manufacturing licensing program initiation.
- For retailers selling CBD products, it has a role in creating a registration program
- Working for the testing of CBD products that are available for selling.
Some Important Information For the Sellers
If you are planning to sell CBD products like CBD oil then you must assure that the products are from the licensed distributors which have third-party testing labs and also make sure that those products are derived from industrial hemp and not from marijuana. The reason is marijuana contains high THC content and is illegal for selling and buying. FDA has not approved any CBD product to be sold over the counter that’s why some companies can cut corners in the testing of CBD products and other quality checks.
Author – Noah Nicholls
Noah Nicholls is a full-time Writer, Traveler, and Marketing Expert who is Currently Working for CBD-Boxes. Noah Nicholls writing relates to a range of subjects such as CBD and health.