5 Items to Add to Your Starting-A-CBD-Business Checklist!

CBD saved my friend’s life, she was living in chronic pain for years

and nothing helped until she found CBD, thank you for selling it…

This?

This is our WHY.

A few months after establishing our company, our team was at a vendor event. A woman who we hadn’t met before came up to our table, waited in line, and said this simple sentence. The woman’s friend had used another company’s product, but that did not make a difference – what mattered at that moment to our team was hearing that the woman had found a product that worked for her and had changed her life. The best part? This is not an uncommon occurrence. The absolute best part of our jobs is receiving testimonials and feedback like this, and for our team, the why behind starting Eunomia CBD, LLC was clear very early on. Each time someone tells us about the difference that a CBD product has made for them, a family member, a pet, or a friend, it is a reminder of why we work so hard at what we do. Every day new customers are reading about how CBD has reportedly helped others with a variety of symptoms, from sleeping troubles, to anxiety, pain relief, and beyond.

Interest in CBD and the Cannabis market has never been higher. Financially speaking, it is an excellent time to begin a career in the Cannabis Industry as well. According to The Hemp Business Journal 1 , as sales of CBD products continue to increase, it is forecasted that the entire market for US CBD will increase to nearly $2 billion by 2022 (it is anticipated that Hemp sales will account for over a third of this total, with the remainder coming in from marijuana and pharmaceutical sales).

Once you find your Why, you have reached an important milestone – You’ve found what drives you! Starting a CBD business is a worthwhile and exciting road but it is a long one, and despite all of our efforts we just couldn’t find that perfect CBD-Businesses-For-Dummies book. But from one entrepreneur to another, I would like to use this as an opportunity to share a checklist of items that my partners and I came up with, as well as some very valuable resources for you to bookmark.

With that, let me be the first to welcome you to the Cannabis Industry – We look forward to seeing you succeed! When you are ready, we also are here to help with establishing your product line!

  1. Education is Key
    • The regulatory environment in our industry is inconsistent and ever-changing. You’ll find that one week hemp products are legal in a particular state, and the next week all food items containing hemp in that state have been banned. You’ll also find that regardless of the legal status at the federal level, each state holds the right to impose their own regulations and laws surrounding CBD and other cannabis products which means that you’ll have quite a lot of reading to do in order to be kept up to date with where you can and cannot sell your goods. We recommend consulting with and continuing to work with an attorney who specializes in Cannabis Law – For our team this has made a huge difference.
    • Terpenes, and strains, and Endocannabinoid System oh my! For the majority of us, cannabis as a plant was not covered very well in Biology. We also don’t recall many details about the history of cannabis in the US in our textbooks, or hearing about how the body naturally produces cannabinoids in Health Class. This means that there is much to learn for your team to confidently understand and teach others about your CBD products. Becoming a walking-talking cannabis resource will only help you to succeed in this industry – It will truly set you apart. The internet is a valuable resource, but so too are the conversations that you will hold with other professionals in the industry. Network, network, network!
  2. Selecting a Business Model
    • We couldn’t say it any better than the US Small Business Administration 2 : “The business structure you choose influences everything from day-to-day operations, to taxes, to how much of your personal assets are at risk. You should choose a business structure that gives you the right balance of legal protections and benefits.
      • Remember at the beginning of this article where we mentioned resources to bookmark? This is one of them! The SBA provides you with an extensive amount of information to help you through this process. From defining the various types of business structures that you will need to choose from, to providing links for you to apply for licenses and permits and tax ID numbers, and providing you with a breakdown of various types of insurance that you can choose from for your business… the SBA has nearly everything that you’ll need!
    • A big piece to consider when choosing your Business Model is what and where you plan to sell. Will you be selling online? Will you have a retail store? Will you be selling as an MLM representative? Will you be selling direct to consumers, or will you be only selling in bulk to wholesale clients? Will you be reselling other companies products, or will you be creating your own brand?
    • The answers to each question above come with their own line of additional questions – Starting with step one, educating yourself about the industry, should help to guide you in these decisions as well as all of the decisions for the steps below.
  3. What Products Will You Offer?
    • Is it important for you to offer only THC free products? Would you prefer to offer products created from a CBD isolate, or would you like a full or broad spectrum line of products? Will you be providing additional hemp products in addition to your CBD products?
    • Are you interested in providing hemp products for humans, animals, or both? If you are seeking to provide a line of products for animals, will you be focusing your efforts on household pets, or will you also be offering CBD and hemp products for large animals (products such as pellets for horses, and hemp bedding for chickens)?
    • Do you have a resource to direct customers to when they ask you about hemp plastics, building materials, crude oil, and terpene purchases? Even if you do not plan to carry such items, it is imperative that you continue to educate yourself about the various product offerings that exist, and network to help guide your customers in the right direction.
  4. Banking is… well… still evolving. Quick trivia time! Eunomia has three founding members – What industry did each of these representatives work in prior to diving into the Cannabis Industry? The Financial Industry! Combined together the trio had about twenty years of experience in the Financial Industry, so you’d think this would be the easy part for them, yes? Nope! This was (and for the foreseeable future will continue to be) surprisingly difficult.
    • The passage of the 2018 Farm Bill was a historic milestone for the CBD industry; however, financial regulations, state laws and regulations, and vendor contracts between a financial institution and their partners are not able to be updated overnight. Our team learned that it is imperative that your paperwork be organized, clear, and extensive.
    • The more paperwork that you have, the better off you will be. Most associates that you contact are not experts in your industry, and most financial institutions that you contact will likely have outdated policies or documents that are geared towards a specific segment of our industry such as medical marijuana dispensaries or farms that grow hemp. Bring copies of all of your documents so that they can easily be sent to the financial institutions Risk Management Team, Anti-Money Laundering Department, Senior Management Team, or in some cases even the Board of Directors. Be clear about your business, ask questions, clear up any confusion, and then be patient. You may be approved right away, you may be turned away, you may even be welcomed as an exception but be subject to various account limitations. When approved for an account, our team recommends asking as many questions as you have, but we have found the following to be especially important for our business: Can the account have a debit card? What fees are associated with this type of business account? Can my company accept and send payments through ACH, domestic, and international wires? Can I have full access to online banking, including the bill payer, remote deposit, and account alerting features?
    • Do you intend on accepting payments via credit/debit cards? If so, do you plan to sell vape products in person and online? Here is a tidbit that our team had learned when it was almost too late – Online vape sales is a deal breaker with most credit card processors.
    • Do you plan to allow customers to use their checking account and routing number on your website? Will doing so impact your shipping time to allow for the payments to fully clear through the Federal Reserve?
    • Do you wish to use a service such as PayPal or Square? As of our last calls with each company (which we make regularly for status updates), neither company will allow CBD companies to utilize their services. Of course, this could change at any moment, but at the current time, this is not an available option.
    • Be honest with those who you are hoping to do business with. This will prevent future frustrations and surprises from coming your way, and is well worth it in the long run.
  5. Paperwork Is Your New Best Friend, Don’t Leave Home Without It!
    • Permits and licenses will vary from state to state, and town to town. Are you looking to sell locally at a market or event? In one town, you’ll likely be welcomed with open arms while in another you may be required to obtain a permit to sell within that particular city, you may need to provide a copy your sales tax license, and you may even need to list the event on your insurance policy. Before paying to become a vendor, always speak with the organizers first, and be honest and very clear about the type of products that you will be selling. Our team has also learned to obtain all approvals in writing, to help clarify any misunderstandings that may take place on the day of an event.
    • If you are an online retailer, visit your local Post Office, discuss with them the types of products that you will be selling, bring along your paperwork (just like you did at your financial institution) so that you can help to educate their team and answer any questions they may have. This will serve you well when it comes to changes in regulations, and helping to ensure your packages make it to their destinations. (Here’s a quick story for you – One of our founders was working with his local Post Office for one of our very first orders, and the associate was very hesitant to ship the product. Multiple teammates came over to hear our representative explain about the products we offer, to review the paperwork he had brought, and to hear his explanation surrounding the legality of shipping our CBD products. Out of nowhere, a voice came from behind him stating “He’s absolutely correct”. Our representative turned around to find a Department of Homeland Security agent, badge in hand and a smile on his face confirming that the product was a-okay to ship out. As luck had it, he had just happened to stop in that day to ship a package and had overheard the entire conversation! This just goes to show again why education, honesty, patience, and having your paperwork in line are all keys to your success!)
    • 3rd party lab testing – This is tremendously important as it pertains to transparency with your customers, and the safety and purity of your products. While this can come as an added cost for your business, this is an expense that is well worth the value.

While these five steps are important, depending on your specific interests, products, location, and business, you’ll find that you’ll carve out a path that is unique and will continue to develop as your company grows. You’ll also find that the Cannabis Industry is very cooperative. We do everything in our power to support one another, share information, and partner whenever possible. I’ll leave you with one final resource that our team has come to rely on – The Hemp Industries Association 3. While the HIA is not specific to the CBD side of the industry, they are a great resource for those of us who offer hemp-derived products.

If I haven’t stressed this enough times to this point, let me again say this – There are changes taking place in our industry each and every day… regulations… laws… financial restrictions and opportunities… vendor possibilities… everything seems to be in flux, and it can be a confusing world which is why it is essential for your team to keep up to date, ask questions, obtain details in writing whenever possible, and have partners such as a CPA, Attorney, and Lab that specializes in our industry.

Interested in partnering with Eunomia CBD to offer your clients a 100% THC Free Nano-Amplified CBD? We’re here to help you through the private and white labeling process, and we can even help with wholesale orders of our Eunomia products so that you can carry our line on your store shelves! Simply fill out our Request Form. Also make sure to sign up for our free mailing list so you can keep up to date with our blog, specials, promotions, and much more!

References:

1     https://www.hempbizjournal.com/

2     https://www.sba.gov/business-guide/launch-your-business/choose-business-structure

3     https://thehia.org/

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