The market for CBD products is growing constantly and offers a great opportunity for entrepreneurs who want to open their own shop, either physical or online.
However, starting such a business involves several important steps and things to consider, from researching applicable laws and regulations to identifying reliable suppliers and creating a detailed business plan.
In this article, we provide a brief guide on the steps to follow to open a shop selling CBD products, so that those entrepreneurs interested in the sector can get an idea of how it works.
Research on the laws and regulations applicable to the marketing of CBD
Before opening a shop selling CBD products, it’s crucial to research local, regional, state, and even international laws and regulations if you intend to sell products in several countries. The legal status of CBD products varies from region to region and can be confusing and complex.
It’s important to keep in mind that the legal status of CBD may depend on the type of product being sold (such as oils, creams, edibles, etc.), as well as the intended use of the product.
When we start a company, as we’re in charge of the business, we must make sure that the CBD products we want to sell are legal and that we’re aware of the regulations applicable to them.
For example, it’s important to know that, in general, the maximum percentage of THC allowed in CBD products is 0.2 or 0.3% in most countries, although there are exceptions. There may also be specific labelling requirements, such as indicating on the packaging of flowers that they aren’t intended for consumption.
In addition, there are also often age restrictions, with consumers needing to be over 18 to be able to purchase CBD products.
Properly researching the legal aspects related to the sale of CBD and having the legal support of a specialised lawyer is necessary and will help to avoid legal problems in the future.
Creating a detailed business plan
The business plan is a document that describes the business project, analysing its feasibility and outlining how it will develop in the first few years.
It helps to define your aims, identify the necessary resources, and assess the project’s feasibility. Below you’ll find some of the key points to include.
- Executive summary describing the business in general. It should include the company’s mission, target audience, the products you plan to sell, and an overview of growth plans.
- Detailed market research to identify competitors, target audiences, and growth opportunities. We recommend including a SWOT analysis to assess the strengths and weaknesses of the business, as well as the opportunities and threats in the market.
- Marketing strategies to attract and retain customers online and offline.
- A sound financial plan including start-up and ongoing costs of the shop, as well as projected income and expenses, along with an estimate of sales and costs of products, marketing, rent, staff, etc.
- An operating plan describing how operational aspects such as inventory management, opening and closing times, staffing requirements, sales processes, supplier management, etc. will be handled.
- Attachments: include any relevant documents that support your business plan, such as your CV, marketing budget, and inventory plan.
The key to success: CBD of the highest quality
At The Tree CBD, as pioneers of CBD in Europe, we know how important it is to have a good quality product. No matter how well planned a CBD business venture is, it won’t succeed without a good product.
For this reason, it’s always worth opting for reliable suppliers with a proven track record in the sector. In our case, we’re proud to be a brand that is among the best known by users, which is one of the reasons why, in the midst of our expansion process, we opted to open a line of business offering wholesale CBD to other distributors and shops.
Various types of companies, such as pharmacies, tobacconists, grow shops, and online CBD shops trust us and sell our products. It’s this emphasis on quality that has allowed us to create multiple synergies with our clients at a business level.
In addition, we also distribute our products under a private label and we have several options, either bulk purchasing of products without labelling, or customising them with your brand.
Key aspects in selecting CBD providers
CBD is a natural compound that has become increasingly popular due to its potential health benefits. The CBD industry as such has grown rapidly in recent years, and with so many suppliers to choose from, it can be difficult to know which ones to trust. Here are some key points to consider when selecting a CBD supplier:
Product quality: One of the important factors is to find a supplier that offers quality CBD products on a continuous basis.
- Quality of flowers: The quality of products often changes from harvest to harvest. It’s therefore important to work with suppliers who continuously offer the same quality.
- Extraction method: to ensure good quality in non-organic products, such as CBD oil or cosmetics, always look for a supplier that works with CO2 extraction. The optimal method for extracting CBD from the hemp plant can have a significant impact on the quality of the final product.
Type of CBD: There are three types of CBD: full spectrum, broad spectrum, and isolate. Full spectrum CBD contains all the compounds found in the hemp plant, including THC (although the amount is less than 0.3%), while broad spectrum CBD contains all compounds except THC. CBD isolate is pure CBD without any other compounds. Find a supplier that offers the type of CBD that meets your needs.
Documentation and legal status: As we’ve mentioned, CBD is a sector in which regulations and legal aspects are very important. When selecting suppliers, it’s therefore very important to have suppliers that have all the necessary documentation up to date and can support you at all times. The documents you should request are:
- Product analyses: these must be no more than six months old and must bear both the genetics of the seed certified by the EU and a batch number to ensure the traceability of the product.
- Invoice: With all the product information and the batch number linking it to the analytics.
- Certifications: Ask the supplier for certifications that ensure the conformity of the products, such as the CPNP registration of topical and cosmetic products like CBD oil.
Customer service: a good CBD supplier must have excellent customer service. Look for companies that guarantee a good service and after-sales support and that tend to solve problems and not just make sales. To do so, always ask about their return and/or restocking policy.
Reviews and reputation: Good suppliers are those that have and take care of their online reputation and have a good average number of reviews. Look for reviews and comments from other customers to get an idea of your supplier’s reputation. To do this, visit their profile on Google, Trustpilot, and other consumer review websites. You can also visit the supplier’s social media profiles and see what their customers are saying.
Price: CBD products can vary in price depending on their type, strength, and quantity. Always consider the value/quality of the product compared to its price to ensure that you get an acceptable markup for a quality product that is in demand in the market. Normally as a retailer, your markup between the purchase price and the RRP should be between 35 and 60% depending on the product.
By carefully reviewing these key points, you can select a CBD supplier that meets your needs and provides high-quality, safe, and effective products.
In short, to open a CBD shop, as with any other business project, you must start with a business plan. However, this sector has its own specific characteristics, and it’s particularly important to always be up to date in terms of the regulations concerning this substance, as well as to have high-quality CBD products available.