The CBD industry is relatively new but is already witnessing huge market growth. The industry is projected to reach a $20 billion sales mark by 2024. CBD is entering the market through various products, including tinctures, topicals, edibles, etc.
With the growth witnessed in this industry, many entrepreneurs are looking for ways to enter the market. This desire was even fueled further by the passing of the 2018 Farm Bill that legalized the sale of hemp products. If you’re one of the people looking to venture into the CBD industry, then here is a brief guide for you.
What Is CBD?
Cannabidiol (CBD) is among the 100 compounds of cannabinoids extracted from the hemp plant. One commonly known compound of cannabinoids is THC, which makes its users feel high after taking it.
On the other hand, CBD doesn’t produce a high effect because it’s non-psychoactive. CBD is known for its therapeutic effects and plenty of health benefits and is still undergoing lots of research on its medical benefits.
CBD is sold in the market as a concentrate or infused in various products. The most common CBD products include creams, infused edibles, gels, and tinctures.
How CBD Works
CBD is known to create a feeling of relaxation and calmness. It helps people handle stressful situations and reduce symptoms of depression. CBD is also used to curb various health problems without making you feel high.
CBD works with two cannabinoid receptors, CB1 and CB2, which are scattered throughout the body. CB1 receptors are found in the brain and facilitate memory, pain, emotions, thinking, mood, coordination, movement, and appetite. CB2 is associated with the immune system and also helps to deal with pain and inflammation.
When you consume CBD, it will stimulate the body to release cannabinoids. It will then bind with the receptors in the body to give you the feeling of calmness.
CBD Industry Growth
According to industry analysts, the CBD market in the U.S. will record $20 billion in sales by 2024. This shows a huge growth potential and a major improvement from the $1.9 billion recorded in 2018.
Since CBD legalization in 2018, society is appreciating the benefits of CBD products. Many people turn to CBD products for stress management, pain relief, fighting insomnia, and more.
CBD oil distributors are cropping up everywhere, including restaurants, gas stations, malls, and local CVS stores. The industry is continuing to see more brick-and-mortar shops, CBD websites, pharmaceutical products, and e-commerce shops everywhere. The online sales of CBD are currently at 60% of all the sales channels.
All these CBD industry trends are proof enough that the future is bright. You have great potential to succeed in the market if you begin CBD business today. More and more products come up every day, and you won’t run out of ideas on what to focus on.
How to Start a CBD Business
While CBD has huge potential for business people, it comes with its share of challenges. It faces various regulations and goes through market uncertainties like any other business. Starting this business needs a lot of investment, effort, and hard work.
There are various steps and procedures that you must follow to get your feet into the industry. You need to carry out your market research, understand your target market, write a business plan, register, and get insurance. You cannot just wake up one day and open a CBD store without prior preparation.
The Legality of CBD Industry
Before you even think of opening a CBD store, you have to understand your legal obligations. CBD was removed from the federal Controlled Substances Act following the passing of the 2018 Farm Bill. The governance of the hemp industry and CBD oil passed over to the FDA.
But that doesn’t mean that the regulations are not there because various FDA regulations on CBD are still coming up. One of the regulations pertains to marketing CBD as having health benefits as this is not accepted. FDA has also forbidden the sale of CBD-infused beverages and foods.
The regulations in the CBD business are still very complicated, and you might land in trouble if you don’t take caution. You must understand all the legal obligations and stay safe if you wish to succeed in the industry. Stay updated with all the new developments as far as FDA regulations are concerned, so you always comply.
CBD Industry Challenges
Like any other industry, CBD has its share of challenges, and you can only survive if you’re strong enough. You must know about CBD because it faces some unique challenges due to the controversies surrounding the products. Most of the challenges are related to regulations since agencies like the FDA keeps devising rules and regulations to govern the industry.
CBD business people also have a pretty hard time getting access to reliable banking services. Many banks don’t want to do business with CBD companies as they consider it a big risk. CBD companies always face abrupt closure of merchant accounts, which paralyze their operations.
The insurance world is another great challenge as the prices remain high even with hemp legalization. Payment processors impose high fees on CBD businesses, and the ones that process the payments are minimal. CBD has little access to capital as many financial institutions are hesitant to fund the companies.
There’s Great Potential in CBD Business
While the CBD industry is still new and faces great challenges, there’s no denying that the future is bright. The industry is continuing to record great growth opportunities making it one of the quickest growing. The passing of the 2018 Farm Bill has given the CBD industry excellent growth potential.
Do you want to join many entrepreneurs looking to venture into the CBD business? We’re here to hold your hand and see you succeed in the industry. Read other blogs on this site to understand everything that’s there to know about CBD.
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