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How to Start a CBD Business in 2021: A Guide to Your Success

Are you looking to get into the CBD industry but don’t know where to begin? Well, don’t worry! We’re here to help answer all of your questions.

With CBD’s popularity on the rise, many people are trying to make it in this new industry by starting their very own CBD business. But as with starting anything, there are always a lot of questions.

We’ll cover topics like the laws and regulations of the CBD industry, marketing your products and more. So, whether you’re just getting started or want some tips for making your business even better, this blog post has something for everyone.

Starting a new business in the CBD industry can be scary at first with all the initial barriers you face, but with a bit of help and guidance, you’ll get the hang of it in no time.

What is the CBD Industry like in 2021?

As we learn more about CBD’s potential health benefits (like anxiety, chronic pain and insomnia relief), the demand for CBD-based products grows each day.

It’s now estimated that the CBD market will reach 2,740 million USD by the end of 2021, and is further projected to receive 51% more investment returns during the 2030 forecast period.

As you can see, the CBD market is expanding quickly and rapidly, so why not try out in this promising industry?

Why Should You Start a CBD Business?

The CBD industry has unmatched growth opportunities. Since the 2018 Farm Bill passage, CBD products have been increasing in the market at a rapid rate. As a result, it’s safe to say the cannabis industry is one of the quickest growing business sectors.

With the customer base increasing, the rate of profit return rising and the trend in normalizing cannabis consumption, now is the time to start a CBD business.

Many people are also trying to join the CBD industry for good reasons, so why can’t that be you? With a combination of persistence and creativity, you’re on your way to setting your business for success in the CBD industry.

What Should I Keep in Mind before Starting a CBD Business?

Starting is often the most challenging part, especially when it concerns your new business. If you’re feeling lost, we’ve gathered a few things you should consider before starting a CBD Business:

a.    Know the CBD laws and regulations

Anywhere you go, businesses must follow various local and state laws and regulations related to employment, salaries and insurance. Likewise, you need to know the laws and regulations around selling CBD products.

With the passing of the Farm Bill in 2018, the commercial production of hemp was legalized in the United States, meaning you can grow industrial hemp and legally sell products containing hemp-derived CBD across the country in all 50 states.

This doesn’t mean there are no restrictions for CBD, as the regulatory process gets complicated when it comes to cannabinoids. There’s also a certain amount of THC (below 0.3%) allowed in the products, which varies by state and their legislation.

Just remember to be careful during the production stage so you won’t run into any legal barriers.

b.    Be unique

Remember that your business is one-of-a-kind. You just need to communicate that to your future customers. You may have common products with people already in the CBD business, but there are ways for you to stand out in the market:

  1. Click-and-Collect: Certain jurisdictions have made it possible for cannabis retailers to offer click-and-collect or curbside pickup ordering. This lets retailers fulfill online orders swiftly while customers can pick up their orders faster as well.

  2. Menus: In addition to automatically updating information about product availability and pricing, digital menus can also offer essential information about different strains, including detailed lab results, high-quality images and compelling product descriptions. Pretty neat, huh?

  3. Gift Cards: With new clients, gift cards can convert them into loyal customers. The cards can also boost your brand awareness through the cards themselves, as they could be acting as “mini-billboards.”

Identify your company’s niche and broaden your horizons by trying new and interesting things. Seek out new unique products that have never been seen on the market or have interesting, eye-catching packaging. Whatever you do, that’s definitely up to you! Just make sure you stand out in the sea of new CBD businesses.

c.    Market your business

Before you start your business, you need to do some market research. You should:

  1. Know your target audience

  2. Identify your selling proposition

  3. Develop your business brand

  4. Pick your marketing line

After you’ve done some leg work, it’s time to start advertising and promoting your business. Get organized – get a website, use Google Ads, leverage social media, create local awareness and establish a network.

While there are still some strict policies around CBD advertising, these are ways around them. You can partner up with CBD influencers who will allow you to foster their audience’s loyalty and give them a reason to choose you over the other CBD brands.

d.    Understand your business model

A business model is an outline on how your company operates to generate profit in the market. At its core, a business model should explain:

  1. What products you are selling

  2. How you are marketing the products

  3. What the company’s expenses are

  4. How you are expecting profits

Understanding your business model helps you gain more insights into your company operation and develop a business plan that is best suited for your company.

What are the Key Challenges Facing My CBD Business?

Now that you’ve learned all the laws and regulations, created a great CBD marketing strategy and developed a solid business plan, you’re anxious to get started.

Unfortunately, starting a business in the CBD industry comes with its unique challenges. Most of these challenges relate to the regulatory environment, but as federal agencies like the FDA detail specific rules and guidelines, things should stabilize soon enough! However, for now, you may want to keep these challenges in mind:

  1. Finding a suitable payment processor. Payment processing is an essential component for any business. In addition to in-store cash transactions, your future customers should be able to use their debit or credit cards for both online and in-store CBD purchases. Unfortunately, selecting the right payment processor can be a hassle. Even though CBD is legal in all 50 states, CBD transactions are considered high-risk and aren’t supported by many payment processors. You need to find someone who has experience working with regulated businesses, as we do here at Merrco.

  2. Potential banking issues. It’s no surprise that banks are hesitant to do business with the CBD industry. With regulatory uncertainty looming over every company in this space, CBD companies find themselves in an untenable position with the banks. This can often force them to switch banks or have their merchant accounts abruptly closed, which can severely disrupt the operations of your CBD business. This is why CBD businesses have difficulty accessing capital from the banks, so you will have to look for alternatives such as bootstrapping, outside investors or any alternative lenders.

  3. Affordable insurance. CBD businesses are in a tough spot regarding insurance, both for product and liability insurance. Even with the legalization of industrial hemp back in 2018, prices remain elevated since CBD is still considered a high-risk business. So, just as with payment processors, make sure that you pick an insurance company educated in CBD that has experience working with clients like you.


The growth opportunity in the CBD industry is unparalleled. With the passage of the 2018 Farm Bill, hemp CBD products are increasingly popular, and there’s no sign that this trend will stop anytime soon.

This means you have an excellent chance to start your own business in these cutting-edge markets. Follow these tips, and your business is set on the track to success!

If you want to get started with selling or distributing hemp-based CBD products, contact Merrco for all your payment processing needs. We’re happy to answer any questions about our services – just enter your information using our “Get Started” form, and one of our experts will be in touch with you shortly.

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