Do You Need A License To Sell CBD Oil

CBDISTILLERY

Buy CBD Oil Online

CBD products have been gaining a lot of interest nowadays. Most CBD oil distributors have been active in the market due to continually evolving regulations about the cannabis industry legalization. Navigate the legalities of selling CBD oil online in this complete guide to marketing CBD products and shipping ecommerce store orders. CBD products are used to treat anxiety, stress, and pain. There is no doubt that you can make a great profit selling CBD products. But how do you get started?

Sell CBD Products: A Comprehensive Guide on How to Legally Sell CBD Online

CBD products have been gaining a lot of interest nowadays. Most CBD oil distributors have been active in the market due to continually evolving regulations about the cannabis industry legalization. Are you interested in getting in selling CBD online? This article will guide you through the entire process – from licensure and marketing to order fulfillment and financing.

CBD for Business

Entrepreneurs who focus on CBD Products have infused it into almost everything. The growing popularity of the product is taking the world by storm. You can find CBD for humans, for pets, in your coffee drinks, bath bombs, body creams, chapstick, and a whole lot more. The market sales of CBD in the US are expected to grow by nearly $2 billion by 2022. CBD-infused products have been accessible to the public, and because of the continuous evolution of the industry, they will invent more of these products.

However, before you start to sell CBD oil, you should first know how to sell CBD legally. Knowing things that you need to know and what to expect will help you successfully market your CBD products. Keep reading to find out how to start a CBD business.

What Is CBD?

Cannabidiol, also known as CBD, is a natural substance used to help with various health conditions. It became popular through CBD-infused products like oils, edible food such as gummies, body products, and more.

It’s different from other cannabis because this will not make you high. The WHO (World Health Organization) has stated that CBD has no effects on any abuse and that there is no evidence of public health-related problems associated with its use. With this information, CBD has gained popularity in the market.

You might be one of the people who are thinking, “How can I start my own CBD oil company?” Well, there are few things you need to know before starting the business. Deciding to enter the CBD industry could be difficult and draining, especially if you didn’t research properly beforehand. Nonetheless, with hard work and properly handling the business, you might achieve your goal.

Legal Terms for a CBD Distributor

As we all know, the legalization of CBD usage is still under debate across the world. In the recent issue of the 2018 Farm Bill, the legalization of hemp production across the US was approved; that’s why CBD products are now available to the market. However, serious restrictions on how companies are producing it are still present. Here are a few laws that you need to know:

Federal Regulations

In the US, any type of cannabis plant should contain no more than 0.3% THC. Take safety precautions by being aware of the state of legalization of cannabis products because laws can always change at any time. In addition to this, keep in mind that the Food and Drug Association has also stepped in to call out unapproved products with false health claims.

Statewide Regulations

Statewide regulations on CBD legality are different in each state. Some states allow marijuana-produced CBD, and there are also that only allow the standard choice in this industry, the industrial hemp-produced CBD. The THC level of industrial hemp-produced CBD is not high and is accepted nationally. For extra precaution, try to contact some local representatives to know which type of CBD is allowed in your target state.

How to Sell CBD Online

If you’re interested in selling CBD products, you might be thinking about where to put up listings for your hemp oil for sale, CBD extract for sale, or other business products of the same variation. Online shopping is one of the most popular ways to buy products from the comfort of your own home. You can sell CBD oil products through Shopify, Amazon, or other online shopping platforms. Setting up your shop online and starting selling online is a great way to establish your brand. Here are a few things to take note of before selling CBD online:

Get Licenses

People who are new to the CBD business might think, “Is it legal to sell CBD?” or “Do you need a license to sell CBD Products?” The answer to both questions is yes. To legally sell CBD products, you need a pair of licenses such as a business license and a resale license.

A business license is obviously required for every business. Researching your preference on the business license on your local government website is a great way to know which type will fit your business more. Commonly, small businesses go for an LLC, and it usually costs around $100.

You will also need a resale license if you plan to purchase your products from wholesalers or distributors. Resale license permits are under the state, so handling this license can vary state-to-state. Try to research the requirements on your state ahead of time so you’ll be aware if you still need a resale license and how you can get one. Getting these licenses is important, and you should not skip this step when starting a CBD business.

Look For a Certified Supplier

A legit supplier of high-quality CBD products is a vital part of the business. In addition to this, they must be certified to sell by the state or nationally. Getting regular tests by third-party companies is required to ensure the quality of the products because it will help you produce high-quality products to achieve your target market.

Accept and Ship Orders From Customers

Whether you build your website or list your products through online shopping platforms, you’ll be needing a warehouse system for your CBD products to effectively manage the inventory. You can start accepting and shipping orders from your home if you’re starting small. However, if your brand is starting to grow, you might need to expand your space and sign a warehouse lease.

With your warehouse expansion, you should also ensure that your shipment methods should also level up. You can do this by sourcing for the best order fulfillment company that will fit your terms and preference when handling the products.

How to Maintain High CBD Online Sales

CBD products are no longer limited in our current time, and you can easily spot them in your local drug stores or online stores. It’s important to know that once you’re aware of how to sell CBD oil online, you need to start making excellent marketing strategies that will help you maintain high sales and outdo your market competitors. Making sure that consumers will buy from your brand instead of the competitor’s product should be part of your priority. So how will you do it?

Tip 1: Produce High-Quality Products

The popularity of CBD products is why many businesses have been popping into the industry nowadays. Aside from the fact that some business-minded people produce low-quality fake CBD products, consumers have been ill severely due to these products. Knowing this, it’s now your part to source proper high-quality products that will make consumers trust you and your brand.

Once you’ve started producing high-quality products, there will be a high chance that your consumers will help you market it by telling their friends and family members. This way, your products will become more popular and will also help your consumer’s health at the same time.

Tip 2: Know How CBD Marketing Works

It’s important to know how to market CBD products. There might be advertisement restrictions with social media networks that you should note. Make efforts in marketing your products by using various marketing strategies such as e-mail, newsletters, discounts, online stores with easy access for consumer’s comfort, and paid advertisements.

Tip 3: Interactive Connection With Consumers

Creating ways to actively interact with your community will help you earn consumers’ trust and know their needs and wants when it comes to the product. Actively interacting with your consumers will help you create a great community and foster good relationships. This strategy will differ from other brands because you’ll be the one in charge of knowing and understanding your community as well as meeting their standards.

Tip 4: Wholesale Selling

If you’re wondering how to become a CBD distributor, this will be the answer. Focusing on business-to-business will help you achieve and exceed your target sales. It’s great to start selling CBD wholesale because you’ll be interacting with fewer people rather than running your online store and spending energy on attending to each product inquiry.

How to Sell CBD Online: Information and Tips on Selling CBD From Home

The cannabis industry continues to legalize and explode before our eyes. And it didn’t take long for its more legal archetype, Cannabidiols (otherwise known as CBD), to become a hot commodity.

You can find CBD products in nearly every large retailer these days, including Walgreens, CVS, Ulta, and even teen brands like American Eagle and Abercrombie & Fitch. But just as fast, it’s become a viable ecommerce solution for those who want to sell and buy it online.

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If you follow ecommerce product trends, you know that CBD is everywhere — for humans, for pets, in your drinks, in your chapstick. It seems as though there is CBD-infused everything.

Of course, it’s not as simple as throwing up a website and watching the buyers flood in. If you decide to sell CBD at all — let alone online — you’ll face a complicated industry with complex legal and marketing challenges.

Before you start selling CBD products online, you should know exactly what to expect and how to prepare. Read on to get the full rundown on how to navigate building a CBD income stream in today’s climate.

Note: This article is solely for informational purposes and does not constitute legal advice.

What is CBD?

You may hear CBD being described as “cannabis oil but without THC,” and that’s close but not entirely accurate. CBD, or Cannabidiol if you’re using the scientific term, is an active component of Cannabis — a small, effective part of the larger whole.

Cannabis is made up of different cannabinoids. Cannabidiol is one of them. According to users, this is the ingredient that helps alleviate an array of symptoms, including pain, anxiety, and even epileptic seizures.

What helped CBD boom into its own segment of the larger cannabis market though is the fact that it doesn’t contain THC (tetrahydrocannabinol). THC is the ingredient in cannabis that causes the widely-known psychological effects: the euphoria, short-term memory loss, increase in appetite, paranoia, and more.

THC is the ingredient that many governments around the world have fought to keep illegal, whereas CBD is the ingredient that simply acts as a natural medicine without any psychological effects.

Because of this, CBD is ahead of the game in the cannabis industry in the sense that it’s more widely accepted and legalized — in most cases.

The CBD market is booming

The number one rule of going into business is “Go where the market is.” One clear way to tell that is by gauging where consumers are already spending their money.

You might look at the explosive evolution that the CBD industry has undergone in the past couple of years and find yourself intimidated by market saturation and competition. Fret not — there are still plenty of pieces of the pie for everyone who wants to try and partake.

Just how big is the opportunity, exactly?

The CBD market is worth billions

The CBD industry is projected to be worth $20 billion by 2024. To put this into perspective, ice cream was only worth $2.27 billion in 2018. CBD is well on its way to being a household item for frequent buyers who will come back again and again as long as you can fulfill the product.

But it’s not that simple. What about the legalities of selling CBD products?

New legal terms for CBD oil

CBD has definitely undergone its share of legalization battles and still has some opposition, but there has been major progress along the way. The 2018 Farm Bill legalized hemp production across the US, which is great for sellers because CBD is produced from industrial hemp.

The bill essentially states that as long as your CBD product has less than 0.3% THC in it, you’re free to sell it, with caution.

Legality of selling CBD

For obvious reasons, the legalization of CBD has been widely disputed across the board. As long as it’s a controversial topic, you’ll want to prescribe to your favorite news channels and set up alerts for updates to CBD laws. With that being said, a plethora of laws have been put in place that you need to be aware of, both federally and at the state-level.

Federally

In the United States, there aren’t any concerns at the moment other than making sure your products contain less than 0.3% THC. CBD is otherwise legal nationally. It is recommended that you stay aware of the state of legalization as laws can always be overturned.

It’s worth noting that the FDA has stepped in on occasion to call out unapproved products that market false health claims.

Statewide

Statewide laws will of course vary by state. Some states allow marijuana-produced CBD, while others only allow industrial hemp-produced CBD. Your best bet is to simply sell the industrial hemp-sourced CBD, as it won’t have high THC levels and is accepted across the nation. Otherwise, you’ll want to get in touch with local representatives or research laws in your state to see what you’re allowed to sell.

From that information, build a list of products that you know are legal for you to sell and stick with your regular inventory to avoid any legal mishaps.

How to start selling CBD oil online

Once you’ve dialed in your legal allowances, it’s time to start setting up shop. There is a simple game plan you can follow to get set up and start selling online. From there, you can start refining your product, marketing, and ecommerce fulfillment strategies to grow your business.

1. Obtain licenses

In order to sell CBD, you’ll need to get a couple of licenses. One is a business license. Usually, small businesses go for an LLC. Research your preference at your local government website. Registration usually costs about $100 in most cases.

You’ll also want to get a resale license if you plan to purchase your product from wholesalers. Much like business licenses, resale licenses and permits are handled at the state-level, which can be handled differently state-to-state. Discover what your state requirements are to determine if you need a resale license and how to acquire one.

2. Find a certified supplier

You’ll want to find a reputable supplier that will sell you high-quality products (such as tinctures, oils, hemp products, and more) and is also certified to sell by the state or federally. They’ll also need to get regular tests performed by third-parties to make sure the quality is assured and you’re selling quality products. Many CBD companies have their own hemp farms.

3. Build your website

Now that you have the paperwork and selection process out of the way, it’s time to build your website. First, you need a domain name (or a “www.yoursitename.com” web address).

One of the most popular platforms to buy domains from is GoDaddy.com. But you can just as easily get your domain name from most web building platforms. There’s no shortage of platforms out there that make it incredibly easy for you to build an ecommerce site.

For example, BigCommerce offers full-featured solutions for merchants of all sizes, with no additional fees for selecting your own payment gateway.

Be careful to cover the terms of service and community policy to make sure you’re advertising and selling your products within the boundaries set by the platform.

You’ll need to find reliable credit card payment processing, which can be tricky for CBD products as the payment gateway landscape has been changing a lot in this industry.

CBD is not currently approved by all payment processors (e.g., PayPal), so you’ll need to make sure you’re working with a company that can do this. Note: Credit card fees with CBD gateways may vary by merchant based on a risk assessment done by the processor.

4. Market your CBD products

Now that your website is live, it’s time to bring in the buyers. You might think the “build it and they will come” mantra rings true here. Sorry to say, that’s not the case.

In a land where it’s difficult to market CBD using a lot of popular methods (as Facebook Ads, YouTube Ads, and other common ecommerce marketing channels ban these products from their advertising platforms), there are still two viable options that have the potential to bring in a lot of profit if you play your hand right.

The first is SEO, or the art and science of getting Google to rank your site above others in search results to show potential buyers your website first. In order to succeed with SEO, you’ll want to get an SEO professional to audit your site. They can make sure that Google views things like your site speed, meta data, image optimization and other components favorably. These things help Google trust that your website is worthy to show visitors.

You’ll also want to start a blog, master the skill of keyword research, and put out fresh content that captures the intent of what people are searching for. Make sure you’re targeting terms that bring in potential buyers and not just visitors looking for information on the topic.

Once you start getting organic website visitors through your SEO efforts, you’ll want to start an email list and use your website to grow it. In exchange for an email address, you can offer discounts or even free informational PDFs and trainings on CBD.

When visitors provide their email address for your freebies, they’re giving you permission to nurture the relationship and inform them of more promotions moving forward (e.g., having a sitewide sell for 4/20 or a Black Friday/Cyber Monday deal).

You can also look elsewhere and try partnering with marketplaces like CBD Oils, Ganjapreneur, and Pot.com, or CBD-specific ad platforms like Traffic Roots.

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5. Fulfill and ship customer orders

You’ll need a system for warehousing your CBD products and managing inventory over time. When you’re first getting started, this may be done in your home. After experiencing growth, you’ll want to expand into a fulfillment center by either signing a warehouse lease or outsourcing fulfillment.

Just make sure your fulfillment technology syncs up well with your ecommerce platform, payment processor, and other software. For example, ShipBob is tech-enabled fulfillment company with warehouses across the US to help you spend less time worrying about packing and shipping orders and more time on growing your brand.

“Our fulfillment is on autopilot. ShipBob saves us so much effort, and the opportunity cost savings has been substantial. ShipBob’s platform is easy to use and navigate, the interface is intuitive, and the analytics are very clearly laid out. Today, our health and wellness brand sells three CBD products in the United States.”

Yannick Crespo, Co-Founder & President of Pot d’Huile

Take CBD company Nature’s Ultra. Last year, they started to experience a surge in orders. They were managing CBD shipping and logistics themselves but didn’t understand just how massive and difficult retail fulfillment was. They were getting so deep into the logistics and supply chain side that they didn’t have time to focus on their core products.

They knew they’d be doubling and then quickly tripling their order volume, so they wanted to get help on the front-end to ensure a long-term relationship with a lot of room for scalability. They searched for companies that could give them something similar to Amazon’s delivery capabilities for their website orders, so they partnered with ShipBob.

“Now that we’re working with ShipBob, we can easily ship to all 50 US states with ease. We use ShipBob’s fulfillment centers in Dallas, Texas, Chicago, Illinois, and Bethlehem, Pennsylvania. They help us to maximize our shipping and ultimately our growth potential.”

Andrew Hardy, COO of Nature’s Ultra

Challenges of selling CBD online

Once you get your CBD store up and running, you will likely face a new set of challenges as you grow. Here are a few considerations to help you break through the crowded space and set your business up for success.

Standing out in the market

In a saturated market, you must consider your competitors. Think through the following:

  • Which keywords are your competitors ranking for and how can you write better content to outrank them?
  • What kinds of products are they providing and how can you stand apart?
  • What can you do differently from your competition that your customers will love?

Think through the entire customer experience to uncover where you can differentiate, whether that’s selling unique products, providing custom packaging or a branded insert, or even offering free 2-day shipping.

Managing regulations

As mentioned earlier, you’ll want to go through the proper state channels to figure out what your regulations are so you can abide by them. Your best bet is to take inventory of any regulations, rules, and restrictions, and create company policies around them to make sure you’re following them. With the industry continuing to evolve, be sure to stay updated on these regulations.

As selling CBD becomes more widely accepted, you may eventually be able to sell internationally, ship to other countries, and build out an international shipping strategy. In the mean time, don’t ship products to destinations where they’re not allowed.

Fulfilling orders

Without the proper support and systems in place it can become really difficult to fulfill your orders especially as demand picks up. When you can no longer go at it by yourself, you’ll need to find a solution that will ensure you’re able to deliver the products your customers buy in a timely fashion.

“We place considerable expectations and pressure on shipping so we can get close to what Amazon does. With ShipBob, 100% of our orders are going out via 2-day shipping. We see that people are far more likely to order and keep ordering from us when 2-Day Express Shipping Program is an option.”

Andrew Hardy, COO of Nature’s Ultra

Fulfillment options

Ecommerce shipping can be very challenging and order fulfillment boils down to three common options. What works for one business may be cost-prohibitive or inefficient for another.

In-house fulfillment

There are plenty of CBD brands that fulfill orders by themselves. They keep inventory at home and run to the post office, or use local warehouse space to pack and ship each order by investing in the infrastructure and running operations. This option is often best when getting started or if order volume isn’t too much to handle. As your store grows, you need to scale seamlessly and find a more streamlined solution.

Dropshipping

Dropshipping is when a manufacturer handles both product procurement and shipping orders. All you do is market the product without touching inventory. This can work well for some products, but is often difficult for CBD oil because you have less control over quality, product selection, and speed of shipment.

3PL (third-party logistics) solutions

3PLs are a happy medium as you don’t have to purchase land or hire a team to pack boxes, but you still have control over selecting a manufacturer. The 3PL is the middleman that stores your inventory close to your end consumers, while helping you quickly and seamlessly get the products shipped out.

“We were shipping a dozen orders per day, and now we ship hundreds per day. ShipBob has allowed us to scale up and become successful — we have gone from $70,000 in sales in 2018 to over $7 million in sales in 2019. When it comes to delivery, accuracy and timing are the most important to us, and ShipBob helps us execute on that.”

Andrew Hardy, COO of Nature’s Ultra

Conclusion

Starting an online CBD business might have some legal and marketing challenges involved, but with the growth of the industry and continued legalization, now is the time to get in. Since it’s still a young industry, you can still get ahead of the curve.

Already running a CBD store or anticipating a huge launch? Get in touch to learn how ShipBob can handle your CBD fulfillment so you can focus on your brand — not packing boxes . Request fulfillment pricing today.

Kristina Lopienski

Kristina is the Director of Marketing Communications at ShipBob, where she writes various articles, case studies, and other resources to help ecommerce brands grow their business.

Do You Have To Have A License To Sell CBD?

CBD products are used to treat anxiety, stress, and pain. There is no doubt that you can make a great profit selling CBD products. But how do you get started? Do you have to have a license to sell CBD?

You do not need a license to sell CBD products. However, you must form a business such as an LLC and acquire a resale license if you purchase CBD products from wholesalers. You can legally sell CBD if the oil is sourced from industrial hemp and the THC content of the product is below 0.3%.

Let’s explore the sale of CBD and the requirements to sell these products legally. Learn more about the top three states where the sale of CBD products is skyrocketing, and understand some key factors regarding starting a CBD business. There are important rules and regulations CBD sellers must abide by to run their business smoothly.

Table of Contents

Do You Have To Have a License To Sell CBD?

It is legal to sell CBD products without CBD-related licenses. However, businesses are still required to obtain a business license, and, if you plan to purchase CBD from wholesalers, you need a resale license. These two licenses are mandatory whether you have a walk-in or an online store.

Prospective CBD sellers must research the requirements of selling CBD products since the regulations can vary, depending on the state. However, the sale of CBD hemp products is legal if you comply with the rules and regulations as set out in the 2018 Farm Bill regulations.

Hemp-extract CBD products should contain no more than 0.3% THC. CBD products with more than 0.3% THC are considered to be marijuana and possession of them is a federal crime. [1]

States With the Most CBD Sales and How To Get the Licenses

It cannot be stressed enough that there is a big market for CBD, and businesses selling these products are growing and expanding daily to accommodate their customers. California, Florida, and New York are the states with the most cannabidiol sales in the US. [2] Here is how you can acquire a license to sell CBD in these three states:

How To Get a CBD License in California

It is mandatory in California to acquire a state license (which allows you to run a CBD establishment) before operating a CBD business. The state also requires approval from your local jurisdiction or proof that you received a Conditional Use Permit. [3]

If the local jurisdiction forbids trading cannabis, it will not provide the licenses. Knowing the state laws and regulations is necessary since they often change, so make sure you obtain the correct permits and licenses if you want to sell CBD in California.

After implementing the 2018 Farm Bill, California instituted the AB 228 Bill, which affirms the legal status of hemp-derived cannabis and CBD without limitation. Nevertheless, this bill prohibits the sale of unregulated CBD products that do not adhere to the FDA cannabis regulations.

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How To Get a CBD License in Florida

Florida does not require a license to consume CBD hemp products, but licensing is necessary if sellers grow and sell CBD hemp products. If you plan to sell edible CBD products, you must obtain a food establishment permit. [4]

You may also be required to register for additional licenses if you sell frozen or dairy products. Cultivating hemp plants means you must be willing to provide your fingerprints, transportation plans, and environmental containment plans, and obey hemp cultivation site statutes.

How To Get a CBD License in New York

To sell CBD hemp goods in New York, you must apply for a Cannabidiol Hemp Retail License. You can easily apply for the license via the New York Business Express website. [5]

Distributors of CBD hemp products require a Cannabinoid Hemp Distributor Permit before selling and distributing CBD produced outside of New York to CBD hemp retailers. This requirement guarantees that all outside CBD products meet the requirements of the Cannabinoid Hemp Program. [6]

What About Delta 8

Delta 8 is made from CBD, so you may be wondering if your CBD license will work for delta 8. Many but not all states have similar licensing rules for delta 8 as CBD. Follow this link if you’re wondering, “do I need a license to sell delta 8?”

States That Prohibit Hemp- and Marijuana-Based CBD Products

Unfortunately, in nine US states, you are not allowed to start a CBD business. All states have their own Controlled Substance Act (CSA), but these nine states prohibit the sale of CBD products, making it illegal to consume or distribute CBD products in that state. These states are:

  1. Texas
  2. North Carolina
  3. Kansas
  4. Indiana
  5. Kentucky
  6. Tennessee
  7. South Carolina
  8. Mississippi
  9. South Dakota

You must have a valid reason to use cannabis products, including CBD, which means you can only use them for medical purposes in these states. Doctors who approve the use of cannabis and CBD will provide you with a licensed medical card for purchases. In these nine states, you cannot obtain licenses to sell CBD online or in-store. [1]

The remaining states have legalized the sale and purchase of CBD products, allowing businesses to open CBD stores and pharmacies to sell CBD. In these states, you can possess, buy, and use hemp-based products without restrictions. Products that can be legally sold in these states include hemp capsules and CBD oils.

However, states such as Nebraska and Michigan are in the process of making regulatory decisions and evaluating the 2018 Farm Bill changes. Therefore, sellers and consumers in these states cannot open or purchase CBD products from stores, but luckily consumers can legally buy CBD from online retailers.

Essential Licenses That May Be Required To Sell CBD

It is mandatory to obtain a license to sell CBD hemp products in some states. If you have a CBD store in one of these states, it is important to familiarize yourself with what you need to acquire when establishing a business: [7]

  • Tax ID Number – An Employer Identification Number is a tax ID number that assists the IRS in recognizing your business for tax-related matters.
  • Business License – We have already established that a business license is required to operate your CBD business. The license is renewed annually and is proof that your business is legally allowed to operate in the country. Though this license has nothing to do with selling CBD, it is required for all businesses.
  • Business Formation – A business formation with the state aids in protecting potential liabilities and debts that may occur. It also protects your personal assets.
  • Sales Tax Permit – When collecting local sales and state taxes, you must have a permit.
  • Permits – Businesses need different permits depending on the products and services they offer. For example, a CBD business might need a permit from the health department if they sell food or treats.

How To Obtain a CBD Certification

A CBD certification signifies that the CBD products you sell to your customers have been third-party tested, are safe to consume and use, comply with FDA regulations, and adhere to the legal level of THC (0.3%). This certification assures buyers that the CBD is of a high standard.

If your business complies with the certification requirements, you will get a stamp of approval featured on all your CBD-infused goods and/or your CBD website. Many organizations, such as NSF, US Hemp Authority, and BSCG, provide sellers with CBD certifications. Let’s look at one top-rated organization that can thoroughly assist you:

LegalScript for CBD Certification

LegalScript is meticulous when it comes to product credibility. The organization evaluates and ensures that you have the necessary documentation to start the application process for running a CBD business. [8]

Sellers must prove that their CBD products meet the federal and state regulations to be certified, and product labeling should accurately state that the goods contain CBD. To meet the standards of LegalScript’s certification process, you must always be transparent with customers and regulators.

The content of the products must not consist of ingredients that LegalScript has prohibited. To have the LegalScript stamp on your CBD website, your domain name must be clear and accurate and not be privacy-protected. Your website must be simple and easy to navigate so that customers can easily find your contact information and location of your CBD store (if applicable).

LegalScript only allows applicants to market LegalScript-certified CBD goods. There are numerous standards CBD sellers must be willing to meet, including agreeing to on-site inspections by LegalScript, supplying unexpired and usable samples for testing, and consenting to background and history checks for criminal offenses or civil violations.

You can simply apply on the LegalScript website to create an account and pay the once-off application fee (the annual subscription fee is only payable after sellers have been successfully certified). [9] Applicants must complete a questionnaire (you can return to the questionnaire anytime you want), and the LegalScript team will review it.

LegalScript may ask for additional information, underline flaws in the application, and have CBD sample products at their disposal for testing. Once the grueling process ends, you pay the subscription fee and become certified.

It is important to have all the required documents ready before starting the application process, be completely clear and truthful in the questionnaire, quickly respond to the company’s requests, and instantly pay the subscription fee.

Investing in CBD certification is costly. Be prepared to pay a substantial fee for LegalScript’s services.

Total of CBD Products Application Cost Per Product Annual Monitoring Cost Per Product
1-5 $1,495 $3,495
6-10 $1,395 $3,295
11-20 $1,295 $3,095
21+ $1,095 $2,895
CBD Website Once-Off Application Fee Per Website Annual Fee Per Website
Website $1,495 $3,495
Probationary Website $1,495 $4,995

Disadvantages That CBD Businesses Face

CBD businesses must deal with a few hurdles that other companies typically do not face. So, consider these challenges before you make your final decision to sell CBD products: [10]

  • Insurance – CBD businesses have difficulty finding affordable and quality insurance. Even though it’s legal to sell CBD and hemp products, insurance for such a business is expensive. Many people are not adequately educated about CBD and hemp products, making certain aspects of running the business challenging.
  • Banking – Another challenge for CBD sellers is access to reliable banking services. Banks are hesitant to provide services and capital to CBD businesses due to the probability of facing issues and risks associated with CBD sales. Owners of CBD companies face unexpected hurdles because they may have to switch to another bank or deal with the sudden closure of merchant accounts. These problems can be time-consuming and interfere with day-to-day work tasks.
  • Payment Processing – Recently, Visa announced that it would not do business with CBD companies and sellers. Payment processors ask for hefty fees. A few of the best payment processors include Mastercard, Discover, SMB Global, PayWize, and USAePay.
  • Funding and Resources – Funding and resources are difficult to acquire from banks, mainly because banks believe the CBD business is too perilous and there are no apparent regulatory requirements. Sellers have turned to outside investors or willing lenders to obtain the desperately needed growth capital.

Conclusion

The CBD industry is booming. You can make a large profit from selling these products. California, Florida, and New York are the states that have the most CBD sales. If you are opening your own CBD business, research the requirements of the state where you plan to sell the products. Not all states have favorable laws regarding the sale of CBD.

There is no specific license required to sell CBD products; however, a business license, sales tax permit, business formation, other permits, and a tax ID number may be necessary to obtain. A resale license is required if you’re planning to resell CBD products from wholesalers. There are no definite costs for the permits, licenses, or additional paperwork necessary for CBD sales.

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