The Key Challenges of Owning a CBD Business in 2022
CBD is already a big thing, and it will become even bigger. Experts estimate that the global CBD market is bigger than 5 billion USD. But, that is not all. It is a market that is bound to grow at an excellent pace for the next decade or more. Thus, it is expected to grow at the rate of 15-20% each year, which is a very high growth rate.
However, again, that is not all to the story. After all, the size of the market or its growth rate does not provide a complete picture. What is good about CBD is the massive profit margins. When compared to other health supplements, one can still sell CBD products at a premium price.
There are many growth drivers of CBD sales. It is worth understanding that still the majority of the world population still has to explore the benefits of CBD products. Another excellent thing about CBD is that it can be added to just any product from foods, supplements, or cosmetics. And thus, the possibilities are almost endless.
Moreover, the covid-19 pandemic has only positively influenced the CBD market. It is because now, more and more people are looking for natural remedies to stay healthy and safe.
Many people wonder if it is the right time to enter the CBD business or if it is not too late?
First and foremost, it is never too late to enter any business. However, one needs to create the right kind of business strategy depending on the market trends. For example, marketing strategy in countries where CBD products are just starting to take off would differ considerably from more mature markets.
How To Start Up a CBD Business
It could not be easy for those inexperienced in the health supplements business to understand a few things. However, first and foremost, one must know that the healthcare products market is more regulated than some other products.
Thus, the starting point for CBD business should be exploring the legal regulations regarding CBD products in the nation. For example, in the EU, CBD oil is considered to be a novel food, and thus one must get CBD oil registered as a novel food with health authorities or the European Commission. However, laws in other countries may vary greatly, and some nations are yet to legalize CBD.
Additionally, one should also understand other laws regulating the food products, packing, advertising of the healthcare and food products, and more.
Once the person has fully understood the legal requirement for getting started, the next step should be deciding on the product profile. First, one must determine what kind of segment to enter, like CBD oil, CBD-infused foods, CBD cosmetics, hemp oil products, and more.
Once a person has taken a decision about entering the specific CBD segment, let’s say CBD products for physically active individuals, sports people, products helping them stay focused and train better. First, one would need to think about differentiating the product from competitors. This may is done in many ways, like adding different ingredients to the product.
Next, one should decide on sales channels and product promotion. For example, some may choose to sell their product through Amazon, while others do so through a dedicated Shopify store or WooCommerce store. Finally, depending on the choice of platform, one would need to come up with a product promotion plan.
The Top 3 Challenges CBD Business Owners Face
Starting any business is never going to be a straightforward task. Therefore, initial plans require frequent reassessment and changes. This is especially true for relatively more regulated businesses like food supplements, medications, or novel foods. Below are some of the challenges most CBD business owners face.
Challenging Public Perceptions of CBD
It is true that CBD seems to be everywhere and in everything. But, nonetheless, there are still many people who know almost nothing about CBD. Even worse, they still think that since CBD is from the cannabis plant, it means that it retains some properties of marijuana. Thus, they often consider it as something addictive and harmful to health.
There are many ways to overcome these issues, like sponsoring more clinical research into the subject and sharing scientific information with clients. It also means creating the right kind of promotional campaigns that help clients learn more about CBD.
Dealing With the Legality of CBD in Different Countries
This may often turn out to be the biggest challenge to overcome. Many CBD businesses never turn into reality, as startups find it too difficult to overcome regulatory hurdles. In countries like the US, things may seem pretty straightforward. Nonetheless, laws differ in every state.
Similarly, in the EU, edible CBD products must now get novel food approval, which is quite a tedious process. It means preparing a massive dossier, going through lots of documentation, and investing time and money to get the approval.
Additionally, there are significant differences between how various laws are implemented and interpreted in various nations. For example, some may allow the import of CBD products but not allow their retail sale through online platforms.
Navigating eCommerce Challenges of Selling CBD Online
These days most of the sales come through online platforms, and brick and mortar stores contribute little to the overall sales of CBD products. Moreover, distributing products to traditional stores is quite challenging for a new business. Thus, the best way to sell their products is through e-commerce platforms for new businesses.
However, most people find it quite challenging to get started with eCommerce. Making products available on any online platform is one thing, but a much greater challenge is sales generation. Here the ways of product promotion are almost endless, from Google Ads to social media marketing. All these things are easy said than done. Online advertising requires the allocation of massive resources and prolonged effort to achieve any considerable sales.
Getting started with the CBD business indeed requires much learning, but it is true for just any business. Thus, these challenges should not be a cause for canceling the business plans. Instead, it only demonstrates the value of proper planning. Additionally, one can readily overcome many of these challenges by finding the right business partner who can help you get started.