business plan for cbd shop

Writing a CBD Business Plan: A Step-by-Step Guide & Projections Template

August 22, 2022

Adam Hoeksema

As the madness surrounding the reefer industry fades into corporate interest, companies supplying everything hemp are tripping over themselves to keep up with the high demand. But the CBD industry isn’t all pun and games, it’s a legitimate business opportunity for many entrepreneurs. 

There are several good reasons to start a CBD business, and we’ll cover a lot of them in this article, but without a solid business plan, it’s going to be very hard to compete. What’s more, there are unique challenges to the CBD industry that relate to old stigmas and prejudices. 

So, if you’re looking to take it seriously, take a look at our guide to writing up a CBD or hemp business plan below. 

Thinking of Starting up a CBD business? 

The first thing to point out, in case you don’t know already, is that hemp CBD and cannabis CBD have very different regulations. The THC in cannabis is what makes it different than the hemp source, so if you’re going to be making anything with that, get your federal laws down. It’s still Schedule 1, so you can’t trade between states. 

It’s also worth mentioning that the laws around CBD in general are not fully formed, so be sure to get legal counsel from the start. 

Otherwise, let’s take a look at some encouraging statistics :

• CBD is rapidly gaining in popularity as a treatment for pain, concentration, and as a dietary supplement. 
• The industry is expected to hit $20Bn in sales in the next couple of years
• Hemp and CBD are finally federally legal since 2018after a long battle against widespread hysteria 
• Sales hit $4.6Bn in 2020 , just two years later.
• There’s still a stigma around the use of CBD, so marketing and funding can be tricky to come by. 

Okay, the last one isn’t particularly encouraging, but it does mean that there are fantastic opportunities and niches available for people who want to lead the trend away from the fear and terrible puns of the mainstream and into the new and exciting world of CBD applications. 

These challenges also mean you will have to do even better on your business plan than you would with another, more generally accepted enterprise. 

The Importance of a CBD or Hemp Business Plan

Regardless of the casual and easy-going associations that many people have with all things hemp, all business is serious business, and if you think you can approach your CBD business in the same way you might make money at a festival, you’ll be caught off-guard by people who know what they’re doing and are trying a lot harder. 

irrespective of the commodity, the fact is you’re running a legitimate business, and without a business plan, you’re going to be taking shots in the dark against people a lot more prepared than you are. 

Further, as we mentioned, not everyone shares those casual attitudes, and the CBD world comes with its own struggles when relating to funding and marketing; there’s a lot of false and misleading information out there, and, quite frankly, dinosaur-era thinking when it comes to hemp products. 

While these attitudes are shifting steadily, there’s a lot of catching up to do, both legally and socially, and this means you’ll have to provide an outstanding and professional example in order to compete. 

A business plan will include a compilation of your market research, financial projections, and overall business direction. And if compiling it, you’ll have a much clearer path toward your goals in business

A business plan will help you develop your growth strategy, understand what is realistic, get to know your market and the specifics of your customer base, and show you how to reach them with your marketing and outreach. It will also show you what you’re up against; part of a business plan involves thorough research into your competitors! 

One of the most important reasons to have a business plan, however, is to illuminate the areas in which your intuitions are entirely false. Without putting in the work, you’re likely to have ideas that aren’t based on reality and it will be far too late for you to find out once you’re fully invested.  

Perhaps most importantly, though, a well-made business plan is the only way you’re ever going to convince sensible people to support you with funding, especially in the hemp industry. 

We’re going to go into more detail about where to look for funding later on, but before that, take a look at our CBD business plan template to help you get an idea of what you’ll need before you start asking. 

Step-By-Step CBD Business Plan Template

The business plan for your CBD company will need to be able to describe your business model. Business models and business plans are not the same things, and you’ll need to learn the difference before you get started! 

In case you don’t know already, a business plan is the framework of your company, and the business plan is the strategy you’re going to use to work with that framework. For example, with CBD you’ve got loads of models you can use to make money:

• Grower – you can supply the raw material for making CBD products
• Producer – you can manufacture CBD or hemp consumables
• Dispensary – you can buy and sell CBD products
• Marketer or Commentator – You can promote or discuss various aspects of the industry or the chemicals themselves 

There are plenty of other models for making money with CBD and hemp. Each will have a more detailed business model attached to it, and each will need a business plan to form the strategy, moving forward. 

So, once you’ve got your business model down, here’s the step-by-step route to forming a business plan for it: 

Step 1. Executive Summary

This will be the first page of your business plan document. Much like the intro to an online article, it will typically be written last (so it’s a bit disingenuous to call it step 1) because it will be a summary of, and lead into the contents of the rest of the document that follows it. 

luckily, it’s very easy to complete once you’ve done your research. 

Step 2. Company Description 

Now that you know your business model, you’re going to work on articulating the motives for your company, who you are, and why you’re here. If you have a lot to think about in this regard, you might not be ready to get off the ground just yet, as your business plan will require you to adhere relatively closely to a certain direction, and if you have none, the plan isn’t going to come together. 

If you know what you’re about, start this section with a pitch. Remember, as much as this whole document is an exercise in strategy, it’s also going to be a marketing device for investors or funders if and when you decide to start making money. 

Don’t be afraid to show your enthusiasm and excitement here, but – as it is with any step in this document – don’t make outlandish claims and don’t make promises you have no intention of fulfilling. 

3. Products and services 

In this section of your business plan, you will be identifying and itemizing everything you’ve got as a revenue stream. Oils, gummies, raw hemp, sprays, candles; whatever you’ve got in mind that you’ll be selling, needs to go in here. Describe what they are and what they do. 

Alongside these items, you’ll want the prices for them, including any discounts and thresholds for change. I.e., if you will do a summer discount on hemp baskets, list the lowest sale price alongside the standard. 

Step 4. Market Research

This is where it begins to get tricky. You will compile your market data in this section and it needs to be accurate and comprehensive. You should have an ideal customer profile for every item you sell. 

If you don’t have the data for this yet, you need to get out there and find it. Before compiling a business plan, you should know who your customers are, what they want, and how what you’re selling is providing that in a way that is different from their current options (your competition). 

Market research takes many forms, and that’s a story for a different article, but you can read up on how to go about it online. Just be sure that investors will be scrutinizing your process closely, so do it right.

Step 5. Business Strategy

With all these plans, strategies, models, etc. It can get a little bit blurry when it comes to understanding exactly which synonym you’re following, but in this context, your business strategy page will display the roadmap you’re expecting to take to reach your potential customers. 

This will include marketing strategies, your sales funnel, your prospect nurturing processes, and your overall path to customer conversions and follow-up. This might also be a good place to demonstrate you know the laws, and that you have a deep understanding of the licensing, taxes, and other limitations you may face when selling your products. 

Step 6. Human Resources

This isn’t just about making a list of everyone you’re going to be employing; in fact, that’s probably not necessary. But you should have a profile of the key players in your company and what their roles are. 

Again, don’t hype them up to unreasonable proportions; investors will spot this immediately and lose trust in your judgment. A simple and short blurb on their roles, responsibilities, and experience is enough. Make sure these aspects reflect what they’re hired to do. 

Step 7. Financial Papers

And here we are at the unavoidables. There’s a good chance an interested party will skip straight to this section since it’s a litmus test of your competence, honesty, and preparedness. 

Your financial documents are only as good as your research and without real-life reports and the subsequent accuracy of your projections, you’ll be laughed out of the room when it comes to applying for funding. 

These documents paint a picture of the financial future of your company, and even if you have accurate data, if you’re too optimistic with your projections, again, your judgment will come under fire. 

There’s not much we can do to help you with the research that goes into these figures but we can provide specialized, personalized templates for you to store them. ProjectionHub’s Dispensary Financial Projection Templates let you plot five years into the future and come with free support if you need any guidance with them. 

They’re also fully customizable to the specific needs of your business, whether CBD or cannabis and can vastly improve your chances of succeeding in investor pitches or loan applications. 

And that’s more or less all there is to building your business plan. Easier said than done, of course, but once you’ve got that down it might be time to start looking for funding.

Who Wants to Pay for a CBD Business?

In order to determine your financial needs, you’re going to have to understand all of the factors listed above and more. You’ll need a robust business plan, and a good sense of direction and you’ll need to know how to hit your waypoints between rounds of funding. 

One thing you might struggle with is finding funding from mainstream sources who have no experience in the industry. This is doubly so if you also have no experience in the industry. So to begin with, research your potential income sources or individuals and try to make a short list of those you want to approach based on their history. 

You’re going to save yourself some trouble if you already know where to look for this funding before you leave the house. From the beginning, there are various options to find startup money:

Bootstrapping – Do it Yourself

With this funding source, you’re essentially self-funded. You might be able to build your startup as a side gig and channel funds from your main job into the new project, or you might be using savings or credit cards to get the initial kick-start to your business. 

There are a few other ways, but essentially what it comes down to is you taking on full financial responsibility for your seed funds, and that obviously comes with 100% of the equity share, but at 100% of the responsibility and effort to come up with the money, and usually a slower growth curve, so choose wisely with this one. You need to be able to pay your staff and rent, even if you’re not profitable. 

Loans – Get a Bank to Fund It

Banks and other financial institutions are a good way to take on plenty of capital without handing over any equity in your company. This leaves the direction up to you and allows you to get a huge boost to your startup funding. 

Unfortunately, they will want that money back, and with substantial interest; especially if you’re not even established yet. In fact, they might not lend you anything at all until later funding rounds, and whatever they do lend may be attached to your house or your car, or something else you’ll end up losing if you default. 

Further, banks demand their money back regardless of your company condition, so if you go under, you’ll still be on the hook. 

Investors – Be Charming

Investors come in many forms and are a common source of funding for every stage of your company. Early-stage investors, e.g. angels, will be more than happy to take on your project if it’s got a persuasive business plan and looks to be on the right track for profitability. Also, if your company fails, they’ll take the hit – not you!  

However, investors will want a share of your equity so that when you do make it big you’ll have certain people demanding things from your company and potentially diverging from your desired path and towards their own. 

The process of selecting investors should bear this in mind, as you would ideally want someone with the same ideals and same vision for your company. 

The CBD industry shows no sign of slowing down, and as attitudes change towards hemp and marijuana and governments acknowledge the medical, financial, and cultural implications of many of the compounds that comprise it, it’s becoming a more and more appealing industry to get involved with. 

However, the industry is still rife with legal, ethical, and societal challenges that hold the hemp industry back, and this increases the risk of any venture related to it. Still, for the right entrepreneurs, this also creates large markets and plenty of occupiable niches.

In order to best take advantage of these, you’re going to need a solid CBD or hemp business plan. Not only does it have to be complete, but it also has to be accurate and outstanding to help make sure your investors consider the risk worthwhile. And, hopefully, now you’re on the right track to designing it. 

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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CBD Business Plan Template

Written by Dave Lavinsky

CBD Business Plan

You’ve come to the right place to create your CBD business plan.

We have helped over 1,000 entrepreneurs and business owners create CBD business plans and many have used them to start or grow their CBD businesses.

Below is a CBD business plan template to help you create each section of your own CBD business plan.

CBD Business Plan Example/h3> Executive Summary

Business overview.

The New Haven Natural Health is a startup CBD company, offering natural health and healing products and located in New Haven, Connecticut. The company was founded by Jackie Trentham, a natural health and healing advisor for over 5,000 social media customers. Jackie has now reached the point where she wants to extend her services and products to a larger audience to help individuals throughout Connecticut feel better and experience life free from pain, stress and anxiety through CBD and naturally-healing products and services offered by New Haven Natural Health.

New Haven Natural Health will provide a comprehensive array of products and services designed to “build better health naturally” for patrons of the naturopathic center. Products include pain and stress relief via cannabidiol (CBD) products, including tinctures, capsules, topicals, and edibles. In addition, nutritional supplements, organic body and beauty products, prescriptive products and naturally-healing remedies will be offered.

Product Offering

The following are the products and services that New Haven Natural Health will provide:

• Wide variety of premium CBD products, including tinctures, capsules, topicals and edibles.
• Complete product line of natural health solutions for common problems: sleeplessness, aches and pains, allergies, colds and sinus infections, and other ailments.
• Complete line of body care products, including skin creams and lotions, detox bath bombs, body-conscious empowerment tools, prescriptives using CBD for specific health-related complaints, and other tools to help the body naturally improve from injuries, illness or stress.
• Naturopathic Doctor (ND) on staff to answer questions during store hours.
• Consultations and recommendations for better health, healing, stress and anxiety relief.

Customer Focus

Our CBD company will target former and current clients who use CBD for pain relief, stress and anxiety relief and general well-being. They will target patients of area doctors who need pain management for chronic or terminal conditions. They will target the residents of New Haven. They will target social media customers who have had interactions with Jackie Trentham previously or posted on one of her social media platforms. They will also target former customers of naturopathic or chiropractic associates within the New Haven area.

Management Team

New Haven Natural Health will be owned and operated by Jackie Trentham. She has recruited a naturopathic physician, Dr. Jerry Freeman, to assist in the wellness center and advise patients on a one-on-one basis, charging clinic fees for those who request consultations. Jackie has also recruited an associate, Sherylle Mathis, formerly an administrative assistant for Jackie, to become the Administrative Manager for the New Haven Natural Health.

Success Factors

New Haven Natural Health will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly-qualified team at New Haven Natural Health
• Complete line of premium CBD products, including tincture, capsules, topicals and edibles.
• Comprehensive menu of products and services that focus on wellness and naturally good health, rather than on illness and problems.
• New Haven Natural Health will offer substantial discounts on products for patients who visit the center for consultations.

Financial Highlights

New Haven Natural Health is seeking $200,000 in debt financing to launch its New Haven Natural Health. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

• Office space build-out: $20,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph outlines the financial projections for New Haven Natural Health.

Company Overview

Who is the new haven natural health.

New Haven Natural Health is a newly established full-service natural health and healing center in New Haven, Connecticut. New Haven Natural Health will be the most reliable, cost-effective, and proactive choice for residents in New Haven and the surrounding communities. New Haven Natural Health will provide a comprehensive menu of CBD products and naturopathic services for any adult to utilize. Their full-service approach includes a comprehensive menu of CBD tinctures, capsules, topicals and edibles..

  New Haven Natural Health will be able to offer a helpful selection of products and services for anyone seeking pain relief, treatment, and natural solutions to stress or anxiety. The team of professionals are highly qualified and experienced in natural health and healing and CBD products and qualities that ensure customers receive the premium CBD needed for effective pain relief or management. New Haven Natural Health removes all headaches and issues of their clients and ensures all issues are taken care of expeditiously while delivering the best customer CBD products and service.

New Haven Natural Health History

The New Haven Natural Health will be owned and operated by Jackie Trentham, a social media consultant and natural health and healing advisor for over 5,000 social media customers. Jackie has now reached the point where she wants to extend her services and products to a larger audience to help individuals throughout Connecticut feel better and experience life free from pain, stress and anxiety through naturally-healing products and services offered by New Haven Natural Health.

Since incorporation, New Haven Natural Health has achieved the following milestones:

• Registered New Haven Natural Health, LLC to transact business in the state of Connecticut.
• Has a contract in place at one of the office buildings, where Jackie Trengtham oversee the setup of an office within 10,000 square feet.
• Reached out to numerous contacts to include naturopathic physicians, physician assistants, clinic health care workers and spiritual healers.
• Began recruiting a staff of six individuals, plus a naturopathic doctor for consultations as needed.

New Haven Natural Health Services

The following will be the services New Haven Natural Health will provide:

CBD Industry Analysis

According to market research, the CBD industry and natural health industry is expected to grow during the next five years to over $1 billion.

• The growth will be driven by an increased use of CBD by individuals who want natural solutions and potential health benefits, including pain relief, anxiety reduction, and sleep improvement.
• The growth will also be driven by individuals who utilize CBD for pets.
• The growth will also be driven by medical doctors who increasingly utilize CBD in pain management for chronic or terminal illnesses rather than traditional prescriptives
• The growth will also be driven by a rise in interest due to expanded sales territories and enhanced customer education regarding the effective properties of CBD.
• CBD Industry Costs will likely be reduced as bulk purchase options become normalized.
• Costs will also be reduced by increased production and a further-developed methodization for separating premium strains that are effective in pain control and management.

Customer Analysis

Demographic profile of target market.

New Haven Natural Health will target former and current clients who use CBD for pain relief, stress and anxiety relief and general well-being. They will also target former customers of naturopathic or chiropractic associates within the New Haven area.

Customer Segmentation

New Haven Natural Health will primarily target the following customer profiles:

• Current and former social media followers and clients who use CBD
• Individuals who use CBD for pain management, stress and anxiety relief
• Residents of New Haven, Connecticut
• Patients of medical physicians and natural health and healing companies

Competitive Analysis

Direct and indirect competitors.

New Haven Natural Health will face competition from other companies with similar business profiles. A description of each competitor company is below.

Serene CBD is a retail business owned by Stacy Owens, a former CBD sales manager, located in New Haven, Connecticut. The business focus is on customers who want to purchase CBD for sleep improvement and to reduce stress and anxiety levels. Stacy has been in sales of CBD for over ten years and teaches courses in using CBD for pain management.

The business is located on a busy street in midtown New Haven, where heavy foot traffic ensures a constant supply of customers. The business focuses on casual users of CBD rather than those who need pain management and the business also offers a product line of aromatherapy products. The retail shop has a small footprint, but also includes various artwork and jewelry products on displays for sale at retail prices.

Herbal Bliss Supply

Herbal prescriptions are included in the products this wholesale company offers to retail sellers of CBD. Premium strains of CBD are offered, along with mid-grade CBD and Native American indicia for those who use the products in ceremonies. In addition to the CBD product line, Herbal Bliss Supply offers proprietary nutritional supplements, including a vitamin and mineral line of supplements, and condition-specific supplements.

Terry and Janice Sturman own the wholesale store, which services New Haven and the region surrounding the area. They have been in business for five years and have quickly expanded their business from the initial small offerings of CBD to customers, to the bulk quantities they now offer to retail stores and those who need bulk supplies.

Happy Jack’s CBD Dispensary

Happy Jack is a well-known figure throughout New Haven, as he was one of the 1960s “flower children” who roamed the streets of the city discussing issues of the day. He eventually left his group of “hippies” and established the small CBD Dispensary, Happy Jack’s, in 2019. His products are consistent and his flair for the comedic side of CBD eases any uncomfortable moments for newcomers to his CBD dispensary.

In addition to the retail CBD dispensary, Happy Jack’s is a regular provider of CBD products at the New Haven County Fair each year, as well as the Christmas Light Parade and other New Haven events for the entire county. Participants can always find Happy Jack with a smile on his face and recommendations for his favorite weed.

Competitive Advantage

New Haven Natural Health will be able to offer the following advantages over their competition:

• New Haven Natural Health will offer substantial discounts on products for patients who visit the center for consultations. In addition, New Haven Natural Health will offer package promotions for those who seek long-term pain management solutions.

Marketing Plan

Brand & value proposition.

New Haven Natural Health will offer the unique value proposition to its clientele:

• Highly-qualified team of skilled employees who are able to provide expertise in the selection of CBD products to meet condition-specific pain needs. This includes sleep improvement, stress and anxiety relief.
• Naturopathic physician on-site when the center is open
• Consultations and referrals as needed
• Product line that complements the CBD treatments and pain management tools
• Package bulk offerings that are discounted for pain management for chronic or terminal illness.

Promotions Strategy

The promotions strategy for New Haven Natural Health is as follows:

Word of Mouth/Referrals

Jackie Trentham has built up an extensive list of contacts over the years by providing exceptional service and expertise for her clients. Her social media clients have indicated they will follow her as she introduces the New Haven Natural Health and they will help spread the word of this new business, along with offering referrals to the company.

Professional Associations and Networking

Jackie Trentham and Dr. Jerry Freeman will continue to network among associations and build industry contacts through national trade shows and naturopathic conventions.

Social Media Marketing

Through the efforts of Jackie Trentham, there are 5,000 social media followers who can be encouraged to refer the New Haven Natural Health to their friends and family members. The social media platforms used, Facebook and Twitter, will continue to provide a wide swath of current and potential customers, patients and clients for the startup company.

Website/SEO Marketing

New Haven Natural Health will utilize their website efficiently. The website will be well organized, informative, and list all the product lines and services that New Haven Natural Health is able to provide. The website will utilize SEO marketing tactics so that anytime someone types in the Google or Bing search engine “CBD for sale” or “CBD near me”, New Haven Natural Health will be listed at the top of the search results.

The pricing of products at New Haven Natural Health will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their products and services.

Operations Plan

The following will be the operations plan for New Haven Natural Health. Operation Functions:

• Jackie Trentham will be the Owner and President of the Center. She will oversee all staff and manage client relations. Jackie has spent the past year recruiting the following staff:
• Sherylle Mathis- Administrative Manager who will manage the office administration, client files, and accounts payable.
• Dr. Jerry Freeman – Staff Naturopathic Physician will provide advice and consultations on-site during business hours.

Milestones:

New Haven Natural Health will have the following milestones completed in the next six months.

• 5/1/202X – Finalize contract to lease office space
• 5/15/202X – Finalize personnel and staff employment contracts for the New Haven Natural Health
• 6/1/202X – Finalize distributor contracts for New Haven Natural Health
• 6/15/202X – Begin networking at industry events
• 6/22/202X – Begin moving into New Haven Natural Health office
• 7/1/202X – New Haven Natural Health opens its office for business

New Haven Natural Health will be owned and operated by Jackie Trentham. She recruited her associate Dr. Jerry Freeman, to be the on-site Naturopathic Physician at the New Haven Natural Health and help manage the office and operations.

Jackie Trentham, a social media consultant and natural health and healing advisor for over 5,000 social media customers, has now reached the point where she wants to extend her services and products to a larger audience to help individuals throughout Connecticut feel better and experience life free from pain, stress and anxiety through naturally-healing products and services offered by New Haven Natural Health.

Financial Plan

Key revenue & costs.

The revenue drivers for New Haven Natural Health are the fees they will charge for products and services to the customers of their retail store.

The cost drivers will be the overhead costs required in order to New Haven Natural Health. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

New Haven Natural Health is seeking $200,000 in debt financing to launch its retail wellness center. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Customers and Clients Per Month: 205
• Average Revenue per Month: $ 47,360
• Office Lease per Year: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, cbd business plan faqs, what is a cbd business plan.

A CBD business plan is a plan to start and/or grow your CBD business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your CBD business plan using our CBD Business Plan Template here .

What are the Main Types of CBD Businesses? 

There are a number of different kinds of CBD businesses , some examples include: CBD-infused food and drink, CBD-infused personal care products, CBD-infused medicinal products, and CBD-infused pet products.

How Do You Get Funding for Your CBD Business Plan?

CBD businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a CBD Business?

Starting a CBD business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A CBD Business Plan - The first step in starting a business is to create a detailed CBD business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your CBD business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your CBD business is in compliance with local laws.

3. Register Your CBD Business - Once you have chosen a legal structure, the next step is to register your CBD business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your CBD business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary CBD Equipment & Supplies - In order to start your CBD business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your CBD business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful CBD business:

• How to Start a CBD Business

• 1-844-442-2369

[email protected]

• Updated - April 20, 2022
• One Comment
• CBD Business

CBD Business Plan Template

Katie Devoe

There are eight essential steps to a CBD business plan: [ 2 ]

• Executive summary,
• Business description,
• Market and competitive analysis,
• Operational structure,
• Product description,
• Raise capital,
• Financial analysis and projections,

Business plans are flexible and should ideally be drafted by professionals.[ 3 ] Following the above basic steps will help give both yourself and those assisting you an idea of your CBD business’s five-year plan. Let’s explore these steps now:

1. Executive Summary

Although this may be step one/the first section of a business plan, a lot of people recommend that you write your executive summary once you have fleshed out all other sections of your business plan.

There is a temptation to front-load the introduction of your business plan with extensive information. But, the purpose of an executive summary is to act as an introductory hook for why your business will succeed for investors.

• Business information and vision,
• Business opportunity (word this as a “problem” or “question” that your business will solve)
• Target market,
• Business model (very important, as retail, home, and online CBD businesses all have different rules and regulations!)  
• Competitors and your differentiators,
• Financial analysis (start-up capital, projected five-year earnings, etc.)
• Staff and management (positions and structures, not actual staff members you have employed/intend to employ.)

2. Business Description

Not to be confused with the executive summary, which highlights a business plan in its entirety, a business description allows you to go in-depth as to how your business will operate. This description contains in-depth details about the business, and why it will succeed.

3. Market And Competitive Analysis

Market analysis requires an open and honest reflection of your findings of the market your business will be entering into.

The reason for performing individual research is that you need to understand the market in terms of localized jurisdictions and direct competitors in whichever space you intend to operate, be it retail, online, or home businesses .

Therefore, market research must include objective and honest reflections of your competitors. It should include, but not be limited to, their successes, failures, and their place in the market.

4. Operational Structure

The operational structure includes the following:

• Day-to-day operations of your business
• Employer/employee structure
• Business hours
• How your business will distribute products
• Any/all legal obligations – important for CBD businesses

5. Product Description

Closely linked to “target markets” outlined above, product descriptions need to be detailed information about products such as the quantity of stock housed, the types of CBD products housed, the pricing of these products, etc.

6. Raise Capital

Be clear on exactly the funds you require as a clear figure rather than a vague, suggestive amount while as clearly highlighting a projected return on investment that you intend to outline in detail under “Financial analysis and projections”.

7. Financial Analysis And Projections

Financial analysis and projections should be an objective, easy-to-read breakdown of your five-year plan. It should be subject to realistic returns of investment relative to the findings of your market analysis (including where your business may be in a deficit.)

• Income statements (otherwise known as a profit and loss statement, which tallies projected income versus known/unexpected expenses)
• Balance sheets (a breakdown of the value and costs of your assets and liabilities)
• Cash flow statement (because this is a breakdown of the cash flow needed for you to being your business, this must be closely linked to your “raise capital” subheading mentioned above.)

8. Appendix

• Lease agreements,
• Purchase agreements with suppliers,
• Legal documentation/licenses,
• Insurance quotes,
• Equipment quotes.

Although business plans are evolving documents that should never remain static, having a clear, concise plan from the start, especially in an evolving industry like CBD, allows you to make altercations and changes organically and with ease!

Katie Devoe is an entrepreneur, educator, and cannabis thought leader. She has been a guest speaker at numerous conferences and developed the CannaCertified cannabis education platform.

• Cannabis and Hemp Enthusiast • One of the first female business owners in the hemp and cannabis industry • Co-founder of one of the largest and most established CBD manufacturers in the country • Spent the past decade leading brands in the hemp and cannabis industry • Developed a certification program Connect with Katie on LinkedIn

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How to Write a Successful CBD Business Plan (+ Template)

Creating a business plan is essential for any business, but it can be especially helpful for CBD businesses that want to improve their strategy and raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every CBD business owner should include in their business plan.

Download the Ultimate Business Plan Template

What is a CBD Business Plan?

A CBD business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a CBD Business Plan?

A CBD business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective CBD Business Plan

The following are the key components of a successful CBD business plan:

Executive Summary

The executive summary of a CBD business plan is a one- to two-page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your CBD company
• Provide a summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast.

Company Description

This section should include a brief history of your company. Include a short description of how your company started and provide a timeline of milestones your company has achieved.

If you are just starting your CBD business, you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your CBD firm, mention this.

You will also include information about your chosen CBD business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of a CBD business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the CBD industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, CBD business customers may include:

• People with chronic pain who are looking for natural relief
• People with anxiety disorders who want to try an alternative to medication
• Health-conscious individuals who are interested in the purported health benefits of CBD
• Pets owners who want to use CBD products to help their animals

You can include information about how your customers decide to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or CBD services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will differ from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your CBD business may have:

• Extensive Industry Experience
• CBD Product Offerings that Address Specific Needs
• Strong Customer Loyalty Program
• Robust eCommerce Platform
• Community Involvement

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. Or you may promote your CBD business via a PR or influencer marketing campaign.

Operations Plan

This part of your CBD business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a CBD business include reaching $X in sales. Other examples include adding new products or services, expanding to new markets, or launching a new marketing campaign.

Management Team

List your team members here, including their names and titles, as well as their expertise and experience relevant to your specific CBD industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup CBD Business

Balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : Everything you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup CBD Business

Cash flow statement.

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include cash flow from:

• Investments

Below is a sample of a projected cash flow statement for a startup CBD business.

Sample Cash Flow Statement for a Startup CBD Business

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your CBD company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

A business plan is an essential tool for any CBD company business owner. By having a well-thought-out business plan, you increase the chances of your CBD company being successful.  

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How to Start a CBD Business

Table of Contents

While still relatively new to the mainstream, cannabidiol, more commonly known as CBD, is becoming a household name. The purported therapeutic and health benefits of CBD — one of many compounds found in cannabis and hemp plants — have created a buzz. CBD oil has entered the marketplace in the form of tinctures, infused edibles, topicals and more. 

The CBD industry’s potential has prompted many people to explore launching a CBD business. However, the industry is not without its challenges, especially surrounding the evolving legal landscape. 

We’ll explain the CBD industry and the steps you need to take when starting your own CBD business. 

How to start a CBD business

Starting a business based on CBD will entail the following actions: 

• Narrow your CBD product offerings. What type of CBD product will you sell? You can sell more than one type of CBD product, but a clear understanding of your offerings will help you draft a business plan and execute a marketing plan .
• Research the CBD landscape. Monitor local and state legislative issues pertaining to CBD. Researching your target customers is also a good idea to inform your marketing efforts. For example, will you target athletes with muscle pain or pet owners who want to help calm their animals?
• Obtain all necessary permits and registration. If you need a special business license to sell CBD products in your state, obtain one before opening. This step is separate from registering your business’s legal structure (LLC, sole proprietorship, etc.), which you’ll also need to do for business tax purposes.
• Choose your external vendors. You may or may not make products in-house. But unless you’re growing everything, you’ll need a wholesale supplier for your CBD. You’ll also need a payment processor and other vendors a traditional business may need.
• Finalize your business plan. Just like any other new business, you must finalize the details. Determining your prices, confirming the logistics of shipping online products, and drafting an initial marketing strategy are essential steps before you can officially launch. 

Some of the best credit card processors are CBD-friendly and will work with you. Check out our review of North America Bancard to learn about one option.

Why start a CBD business?

Countless unique opportunities are emerging for new CBD businesses. Starting any business requires hard work and effort; however, entrepreneurs starting CBD businesses also face the uncertainty of a shifting regulatory landscape. Still, in a fledgling industry projected to undergo explosive growth, today’s heavy lifting might be well worth the trouble tomorrow. 

Cory Slovik, owner of Core Roots CBD, started his company after experiencing firsthand the healing properties of the cannabinoid. 

“I used to be a pro snowboarder … and I was always sore, my muscles were constantly in agonizing pain. I tried CBD, and it helped me tremendously,” Slovik shared. “Then, years later, cannabis … started coming to the forefront, and there was research and data backing up everything I felt on the mountain.” 

Realizing a business opportunity and a way to help others treat their pain, Slovik soon launched Core Roots CBD. He says starting a CBD company is like any other business — plus a bunch of added steps. 

“It’s like any other business; there are steps and procedures you need to go through, like getting insurance and writing a business plan,” Slovik explained. “But in this space, you have got to double- and triple-check everything, know your market and jump through regulatory hoops.”

CBD-related franchises are another possibility for entrepreneurs. In fact, Your CBD Store is considered one of the top franchising opportunities of 2024.

What is CBD?

CBD is one of more than 100 cannabinoids, or compounds found throughout cannabis and hemp plants. The most famous cannabinoid is undoubtedly tetrahydrocannabinol (THC), which is responsible for the intoxication associated with the consumption of cannabis. CBD, however, does not produce an intoxicating effect; instead, it offers potential therapeutic and health benefits, though research into its potential medical applications is ongoing. 

CBD products are generally created in several steps:

• Harvest raw material. The raw material must be cultivated and harvested. For example, if you plan to use industrial hemp to create your CBD products, you’ll need to cultivate or purchase a large amount of the plant.
• Extract CBD oil. CBD oil is extracted from the plant using various methods. Again, you can do this yourself or outsource the process to an extraction company.
• Create the product. Once you’ve extracted the CBD oil, you can sell it as a concentrate or use it to infuse various products. Some of the most common CBD products include sublingual tinctures, infused edibles and topicals, like gels or creams.

Hemp CBD vs. cannabis CBD

CBD is found in both cannabis and hemp plants. CBD oil can be extracted from either plant and used to create products. However, there is a key difference between hemp CBD oil and CBD products derived from cannabis: THC. 

• Hemp: Industrial hemp contains less than 0.3 percent THC. As such, it is considered legal under federal law to cultivate, harvest and process into finished products. 
• Cannabis: Cannabis contains more than 0.3 percent THC (often much higher levels) and remains federally illegal. 

Hemp and cannabis are closely related; in fact, industrial hemp is actually Cannabis sativa L . The difference in name is primarily a function of a legal definition setting the threshold for THC content. A hemp plant’s flowers contain little to no THC, whereas the flowers of a cannabis plant (commonly referred to as marijuana) contain much higher THC levels. 

The federal government considers marijuana a Schedule I drug under the Controlled Substances Act, making it illegal for interstate commerce — even as dozens of states legalize it for adult use. In contrast, industrial hemp was recently removed from the Controlled Substances Act altogether, opening the way for its cultivation and harvest in the U.S. for the first time since 1937. 

Legislation to move marijuana from a Schedule I to Schedule III classification has been introduced to Congress several times since 1972 but has yet to pass a vote. 

Employers face shifting laws regarding the legal use of cannabis . Some maintain zero-tolerance policies, while others are relaxing their restrictions unless they notice productivity issues.

Full-spectrum CBD vs. CBD isolate

If you’ve done any research into the CBD market already, you’ve likely encountered the terms “full-spectrum” or “isolate.” 

• Full-spectrum CBD: Depending on the extraction methods used, the CBD oil obtained from the plant might contain other cannabinoids and compounds found in the source plant. This is called full-spectrum CBD. Full-spectrum CBD also contains compounds known as terpenes, which are responsible for creating the plant’s flavor profile, aroma and specific effects. 
• CBD isolate: As the name suggests, CBD isolate contains only CBD with no other cannabinoids or terpenes. While the purity of CBD isolate might sound desirable, some evidence suggests that full-spectrum CBD promotes an “entourage effect;” that is, the compounds in a full-spectrum hemp extract work together to promote more significant effects. The entourage effect is still under investigation by researchers studying CBD and other cannabinoids.

Understand your legal obligations when starting a CBD business

The 2018 Farm Bill federally legalized industrial hemp and, by extension, hemp extract products like CBD oils. However, entrepreneurs must be aware of significant regulatory considerations surrounding the industrial hemp industry. 

FDA oversight

The 2018 Farm Bill essentially removed CBD from the federal Controlled Substances Act and the oversight of the Drug Enforcement Agency. Instead, it placed governance of the hemp industry and CBD oil in the hands of the FDA. 

The FDA is still devising regulations , which leaves the CBD industry in a gray area. So far, the federal agency has signaled that marketing CBD as having health benefits will not be tolerated. It has also initiated a crackdown against CBD-infused foods and beverages in some instances. 

Further complicating the regulatory landscape is the 2017 approval of the CBD-based pharmaceutical Epidolex, an epilepsy medication approved by the FDA. Since CBD is a primary ingredient in an FDA-approved drug, using it in food products without FDA approval could be illegal. 

Clearer guidance expected

Clearer guidance is sorely needed for CBD businesses to operate in compliance with federal regulations. In 2023, the FDA issued a statement that a new regulatory pathway for CBD products must be established because current frameworks are too limiting. The regulatory body indicated it will work with Congress to establish an appropriate regulatory strategy moving forward. 

“I think the FDA does have to step in, and they will,” said Slovik. “I expect a lot of changes to labels; we’re seeing a lot of businesses out there now using the term ‘hemp extract’ instead of CBD, or they’re not thinking of health benefits so much. Many companies are doing different things, but no one really knows [what the regulations will be] until it happens.” 

It is crucial to understand your legal obligations and play it safe in this highly scrutinized industry. While CBD businesses everywhere await more explicit regulatory guidance, consider the following:

• Ensure you don’t craft your marketing strategy around the supposed benefits of CBD.
• Stay apprised of new developments as the FDA moves forward with emerging regulations.

Marketing and selling your CBD products

Marketing and selling CBD products is tricky. While the passage of the 2018 Farm Bill liberalized the industry a little (CVS and Walgreens now carry CBD products, for example), selling CBD products on major online platforms like Amazon or eBay is still challenging. Likewise, social media advertising is virtually nonexistent; paid ads for CBD products risk account suspensions or bans. All your growth must be driven through organic content that falls under the guidelines of each platform. 

“In today’s day and age, if someone is looking to sell a product, the normal avenues are Amazon, eBay, Alibaba or paid ads on social media,” Slovik explained. “In this industry, it’s way, way, way different. You can’t do any of those things.” 

To successfully advertise and sell your CBD products, you must be creative. Consider the following: 

• Establishing your own e-commerce store or carrying your CBD products in a brick-and-mortar location is a must. 
• Marketing your product with an organic search strategy and customer loyalty programs is always safer than engaging in paid advertising. 
• Every market is different, so do your research and understand your local and state laws.

Magic mushrooms may form the basis of the next cannabis industry as scientists continue exploring the potential medical benefits of psilocybin and other psychedelics.

How to gain a competitive advantage

The key to gaining a competitive advantage with staying power in the CBD industry is to develop a high-quality product that will withstand the coming scrutiny of regulators and educated consumers. According to Slovik, if you want to differentiate yourself from other CBD businesses, you must provide third-party lab testing results — through creative means like QR codes — to validate your product’s quality.

“We want to be more transparent by putting QR codes on all our bottles, so anyone in the store can use their phone to get lab results right then and there,” Slovik shared. 

In addition, Slovik said pursuing certifications like USDA Organic, Good Manufacturing Practices and FDA facility registrations are critical moves to instill confidence in consumers about the quality of the products they buy. 

Overall, Slovik said, the formula for success is simple, even if the process is complicated.

“I would recommend double-, triple-checking everything. Know there will be changes. Research as much as you can, and recognize what the future opportunities are by thinking outside the box,” Slovik advised.

Key challenges facing CBD businesses

The CBD and cannabis industry faces unique challenges that other industries don’t. Most relate to the regulatory environment; as federal agencies like the FDA detail specific rules and guidelines, things should stabilize. For now, though, if you want to start a CBD business, you must be aware of these significant considerations: 

• Banking: Access to reliable banking services can be complicated due to the fluctuating regulatory landscape. Many banks are hesitant to do business with CBD and cannabis companies because they fear significant risk or burdensome oversight. Frequently, CBD businesses are forced to switch banks or experience the abrupt closure of a merchant account , which can seriously disrupt operations.
• Insurance: Finding affordable insurance for a CBD business is another significant challenge. Prices remain elevated despite the legalization of industrial hemp as the industry takes time to catch up to the developments. Education remains a key obstacle.
• Payment processing: Some payment processors present high fees and other challenges to CBD businesses. Slovik said Visa cut off all CBD businesses, leaving him capable of only accepting Mastercard and Discover for payments.
• Access to capital: Banks and other lenders are reluctant to fund CBD companies because they view the industry as too risky without clear regulatory requirements. So far, the CBD industry has relied on bootstrapping , outside investors or alternative lenders to find the growth capital it needs. 

These challenges will likely be cleared up as more concrete regulations appear. However, in the meantime, CBD businesses must remain adaptable and well-informed. Changes in the industry come daily, so preparing backup plans could save you a lot of time and money should the worst come to pass.

The CBD industry is projected to grow immensely

Industry analysts predict the U.S. CBD market will reach $22.05 billion in sales by 2030. This would be a major surge from $7.7 billion in 2023 and represent a compound annual growth rate of 16.2 percent. 

Needless to say, society is growing more open-minded and accepting of CBD. Many individuals are turning to it for pain relief, stress management, better sleep and more; many gas stations, restaurants, and local CVS stores now sell CBD products. 

The CBD market will likely experience the following trends in the near future:

• Increased product potency 
• More access to CBD products in big-box stores
• More pharmaceutical CBD products
• More access to products online through CBD websites and e-commerce shops

Selling online has become the primary way people purchase CBD products.

CBD product types to consider

The CBD industry is introducing new products all the time. If you want to start a CBD business, you’ll have a wide range of product types to consider selling. Here are the most popular types of CBD on the market right now: 

• Sublingual tinctures: A sublingual tincture is CBD oil that generally comes in a small bottle with a dropper. Sublingual products are ingested by placing them under your tongue and allowing the oil to absorb.
• CBD edibles: CBD edibles are a rapidly growing industry sector that includes baked goods, candies and foods. CBD edibles have faced significant regulatory scrutiny from the FDA but remain commonly found products.
• Vape concentrates: Vaporizer concentrates, such as CBD oils and waxes, are another common product. These can be used with an electronic device to vaporize and inhale the CBD product.
• CBD topicals: CBD topicals include gels, creams and sprays for aches and pains. These products are placed directly on the skin to target a localized region of the body.
• Capsules and pills: Many patients who experience seizures or digestive issues take CBD capsules or pills to treat their conditions.

Additionally, CBD isn’t just for humans. Animals also experience calming effects when given small doses, and many businesses offer CBD products for pets like dogs or cats.

The overall cannabis industry growth is projected to reach $72 billion annually by 2030.

CBD is a huge business opportunity if it’s approached correctly

The growth opportunity in the CBD industry is unparalleled. The cannabis industry is one of the fastest-growing in the nation, and CBD is one of the quickest-growing sectors of that industry. If you want to start a CBD business, you’re not alone. 

“This industry has been more or less illegal for the past century,” said Slovik. “At this point, there’s major, major momentum. Many people are trying to break in, so don’t follow the herd. You want to be a leader.” 

A combination of due diligence and creativity will set your business up for success in the CBD industry. Now is the time to get in on the ground floor and build a company that will last. However, you must differentiate yourself with a quality product that stands out from the crowd. 

Natalie Hamingson contributed to this article. Source interviews were conducted for a previous version of this article. 

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How to Start a CBD Business: The Ultimate Guide to Getting a Green Light

Tomas Laurinavicius

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Nearly four thousand years ago a Chinese Emperor Shen Nung, also known as the Father of Traditional Chinese Medicine, wrote in his The Great Herbal book that hemp can have theoretical powers for gout issues, rheumatism and absentmindedness among a variety of other ailments.

Fast-forward to present digital-ridden days: you can now purchase a growing lineup of CBD goods both online and in-person, at convenience stores and in luxury celebrity-owned boutiques, all across the US and abroad too.

But, despite a long history of usage and current popularity, CBD and the hemp plant it’s derived from remain largely misunderstood.

So What is CBD?

Cannabidiol, or CBD for short, is a ‘wallflower’ cousin of the more reactive delta-8-tetrahydrocannabinol (THC). These two compounds are found in the Cannabis plant, along with some 100 other types of cannabinoids.

Unlike marijuana, CBD is obtained from industrial hemp — an MJ plant variety that must contain less than 0.3% of THC on a dry weight basis to be cultivated under a USDA-approved license. Meaning that it does not cause the feeling of ‘high’, but instead is said to carry a number of wellness and therapeutic benefits.

CBD Industry by the Numbers

Partially due to the advertised health benefits, partially because of the close affiliation with the cannabis plant, consumer interest around CBD products has been on a steady rise since 2016.

Source: Atlas

2018, specifically, was named as the “breakout year” for CBD by EAZE, a San Francisco-based cannabis delivery platform.

In 2018, the number of US CBD consumers doubled, from 2.6% to 4.8% with *drumroll*…Baby Boomers leading the pack.

EAZE data suggests that female Boomers were among the most likely CBD users, opting for these products to deal with anxiety, sleep issues and pain relief.

A survey by Consumer Review further states more than a quarter of people in the U.S. say they’ve tried CBD at least once in the past two years.

That makes sense as CBD oil is now infused in loads of products across the board, especially in the wellness, food, beverage and beauty industries. From tinctures and topicals to gummies and even lattes, consumers now have a bevy of CBD products to explore.

So what makes them tick the most? According to Brightfield Group, regular CBD users prefer to use vaping products, followed by the use of high-CBD flower:

Source: Brightfield Group

Growing interest? Checked. Overall consumer awareness? Rising! What about market growth prospects? Well, these seem to be solid too.

By 2025, the retail market for CBD products in the US is expected to hit $16 billion , up from $2 billion in 2018.

Compound the above with the fact that, among those who are familiar with CBD, 80% support its usage (even if they are not personally using it) and it becomes clear that CBD is a very promising niche for starting an online business.

9 Steps for Starting a CBD Business Online

Hyped products often have a short shelf life. But Inferring from above, the interest in CBD is here to stay.

So if are interested in exploring this high-growth niche, here are the main steps for starting an online CBD business :

Identify your CBD niche and products.

Understand the laws and regulations around CBD.

Generate a thorough CBD business plan.

Get your business documents in order.

Find your CBD supplier.

Discover the perfect ecommerce platform.

Build up your site.

Determine shipping and payment terms.

Market your business.

Identify Your CBD Niche and Products

A quick sweep through the (digital) shelves of any wellness store will prove that you can now buy CBD-anything. Creams and ointments, human and pet chewies, hemp clothes and accessories — when the consumer interest is high, loads of entrepreneurs try to capitalize on the hype.

What should you sell then: the trendy stuff or the “classics”? Well, that’s for you to decide. When assessing the overall market prospects, look into the general niches first. Here are the most popular ones:

CBD-infused foods/beverages.

Supplements/wellness products.

CBD-based cosmetics.

CBD pet products.

Next, you should zoom in on your product types. Most of these differ, based on the CBD consumption method:

Drops and sprays: The key ingredient in both is CBD oil, decarboxylated from hemp/hemp flowers and mixed with a carrier oil. Drops and sprays can also include flavoring agents and other compounds that make them more pleasant to ingest.

Pills and capsules: Wrapping a dose of cannabinoid in gelatin or soft gel capsule makes it more digestible. Also, since many people take CBD as an alternative to over-the-counter medicine, this form may seem more familiar and thus appealing, to them.

CBD vapes and cartridges: Inhalation products tend to be popular among recreational MJ users and people who enjoy the social aspect of vaping. Also, this method is often preferred by consumers using CBD for pain relief as it gets absorbed faster to the blood system through inhalations.

Tinctures: Just like medicinal tinctures, CBD-based ones are made by combining cannabinoids with alcohol or another strong solvent. Sometimes CBD tinctures also contain extra herbs. While most don’t have great flavor, tinctures are popular with people who want to feel the effects of CBD quickly.

Topicals and patches: Best suited for targeted action such as joint, back, or menstrual pain, topical ointments and CBD patches appeal to consumers who don’t like hemp flavor or prefer external applications for other reasons.

CBD edibles: Gummies, candy, chocolate, honey sticks, there’s a huge variety of munchable CBD products on the market. Most of them make hemp look less ‘medicinal’ and more of a wellness treat. In 2019, 3 out of 4 chefs identified CBD-infused food as a hot trend. 

Understand the Laws and Regulations Around CBD

The Farm Bill , passed at the end of 2018, legalized the commercial production of hemp in the United States. Specifically, you can grow industrial hemp and then legally sell products containing hemp-derived CBD across the country.

But there are some restrictions too:

The hemp you are using to produce CBD cannot contain more than 0.3% of THC . Any cannabis plant with a higher concentration of THC is automatically considered a marijuana plant and stronger regulations kick in.

CBD, produced from marijuana plants, is legal in 15 states for recreational cannabis usage and in 36 states for medical use.

Now when it comes to cannabinoid as a substance, the regulatory matter gets complicated. To date, FDA has approved only one CBD-based prescription drug, Epidiolex. Meaning that no other CBD brand can make health claims regarding their CBD products. Also, the FDA prohibits adding cannabinoids into food, or marketing anything with it as dietary supplements.

Wait, but what about an array of edible CBD products that are on the shelves? Are they illegal? It’s a gray area.

Because the stance on CBD legality status isn’t consistent across federal and state regulators. As PBS writes : Federal provisions have a blindspot whereby a store can sell as much CBD as it wants, as long it doesn’t make any health claims about its products, put it in food nor add it to dietary supplements.

While FDA doesn’t allow CBD in food, they are not taking any action against CBD sellers either, except for issuing warning letters for falsely-advertised health claims.

Now let’s recap:

1. Selling federally.

Federal laws allow legal CBD sales nationwide. So long as your products contain less than 0.3% THC, you are good to go to market.

2. Selling statewide.

Statewide laws differ. In general, all states should allow sales of hemp-sources CBD with the right THC threshold. But specific favorable or not-so regulations may kick-in in states where recreational marijuana usage isn’t legal. So it’s best to cross-check with a local legal specialist if there are any restrictions regarding CBD product sales in your state.

Create a Thorough CBD Business Plan

Jumping into a business without a solid business plan is like driving without a rearview mirror: you can do it, but you may miss a huge obstacle heading your way.

When it comes to the CBD niche, your business plan is also your navigator for staying atop of changing regulatory policies, conflicting operational priorities and new business opportunities, fueled by the market demand. Plus, it’s the document your financial supporters and other stakeholders will want to see.

Here’s what should go into your business plan for ecommerce CBD operations:

Start with market analysis: The goal of a market analysis is to supply you with sufficient information about your industry size, customers, competitors and other market variables. So that you could make more informed decisions regarding your product positioning, pricing and overall go-to-market strategy.

Pick your brand name and confirm product range: Explain how your brand name, along with other brand assets, differentiates you from the competition. Recap which CBD niche you plan to target and why. briefly describe your product range, focusing on the product quality and competitive parameters.

Determine your financing: Estimate how much cash you’ll need to launch your operations. Break them down as one-time pre-launch investments (e.g commerce website development , inventory purchase, product design/branding) and ongoing monthly costs ( e.g. inventory restock, handling/packaging, shipping, marketing, taxes, etc.). Always add extra padding for ‘unplanned’ expenses because these will surely happen. Then look into how much time and how many sales you’ll need to make to break even monthly. If you are self-financing, estimate how much of a runway you’ll end up having. If you are planning to secure investment later on, prepare more figures describing your anticipated expenses vs profits, plus set targets for CPA (cost per acquisition), AOV( Average order value), sales conversion rates, customer retention rate, customer lifetime value (CLV).

Include a realistic marketing plan: A marketing plan details your strategy for growing awareness around your CBD brand, acquiring new customers and fostering repeat purchases. It’s a cornerstone document that should be a) data-backed b) realistic c) channel-specific. Yes, writing a solid marketing plan will take a ton of time and research. But this early investment pays off in terms of reduced budget waster and better marketing results later down the road.

You can also learn more about business plan writing for ecommerce from our previous guide!

Get Your Business Documents in Order

To sell CBD online you need to obtain two types of licenses:

A regular business license: get incorporated and register a business with your state to start operations. Also, request an EIN/TIN for your newly created company from the IRS.

Reseller license: If you plan to purchase CBD from wholesalers, you may also need to get a Reseller’s license (certificate) from your state. This document is hugely important because it allows you to buy products wholesale without paying sales tax. The license also lets you collect sales tax from your customers afterward.

Find Your CBD Supplier

Arguably, the most important step of your ecommerce operations is finding a reliable CBD supplier. There are a few reasons for that.

First, if you are selling nationwide, you need to ensure that you are selling CBD , derived from hemp plants, not marijuana ones. The latter contains a higher THC dosage, making them legal only in a handful of states. The wrinkle, however, is that there’s no affordable testing for determining the levels of THC in the plant. This can make purchasing raw materials from a farmer challenging if neither you nor they have the capabilities to test the crop.

Reputable wholesalers, on the other hand, typically do lab testing and can provide certificates of analysis (COA), detailing the product content. Not being able to provide one is a major red flag.

(Sample certificate of analysis of a CBD product. Source: Alphagreen )

Apart from the general product contents, you should also ask to see the results of:

Pesticide testing (you’ll want to have a ‘clean’ product).

Microbiological testing (showing there’s no bacteria or mold inside the sample).

Residual solvents testing (prompts if there any stray chemicals remaining from the extraction process).

Secondly, your product quality will impact customer satisfaction and your CBD brand reputation. After all, 24% of CBD users named the ability of the product to generate the “desired effect” as their primary purchase driver. When your product fails to deliver on the ‘effects’ promise due to poor content, you’d struggle to win repeat business. Other buying priorities include ingredients quality, price, concentration and consumption method (e.g. oil, edible, vape).

Considering that CBD production remains underregulated, many ‘fake’ products end up on the shelves: ones containing no cannabidiol inside.

Such sham brands and manufacturers , speculating on the CBD sweeping popularity, are making it harder for the honest CBD companies to break into the industry. As The New York Times feature on the origins of CDB popularity sums it up:

“As a result, the compound is often caricatured as snake oil, a scam, even as promising research into the full potential of CBD is starting to pick up.”

As a new CBD brand, you don’t want to end up on the sham side. Again, this is another reason why you should do careful due diligence when assessing different CBD manufacturers. Beyond requesting or performing an independent certification of analysis, also evaluate a potential wholesaler based on the following criteria:

Hemp sourcing method and origin.

Extraction method.

Reviews from other entrepreneurs.

Extra services (e.g. labeling, dropshipping).

Discover the Perfect Ecommerce Platform

Apart from finding a trustworthy CBD supplier, you’ll also need to identify the (best) ecommerce platform for your operations. Just like quality products, your tech infrastructure will positively contribute to your customers’ satisfaction with your brand.

But, not every ecommerce platform allows creating an online CDB store due to opaque regulatory status. Still, you have some really good options!

1. BigCommerce.

BigCommerce offers a bevy of B2C and B2B ecommerce features for CBD retailers , wholesalers and manufacturers. From drag-and-drop page builders to limitless customization opportunities to 0% transaction fees and 99.9% uptime, we provide global CBD businesses an integrated ecommerce solution they need to start their operations fast and scale without constraints.

2. Shopify.

Shopify only allows US-based merchants based in certain states to sell CBD or hemp-derived goods on their platform. If you are eligible, you gain access to a nice set of core commerce features for launching your digital operations including design templates, integrated shipping, marketing tools and payment processing. But the proprietary Shopify Payment method isn’t available for CBD products. So you’ll need to get approved by a third-party payment processor**.**

3. Shift4Shop.

Shift4Shop is another ecommerce platform that allows hosting digital CBD and vape-related businesses. They offer similar ecommerce solutions — shopping cart software, embedded ‘buy’ button and full-scale ecommerce website builder , featuring themes, unlimited bandwidth, payment processor support and more. However, their website backend comes with a bit of a learning curve, so Shift4Shop may not be the optimal choice for non-coding beginners.

Build Up Your CBD Website

By opting for an ecommerce platform, over open-source ecommerce tools, or custom development, you reduce the website development timeline. Since the solution provider handles hosting , infrastructure and all that jazz, all you have to do to get your CBD operations off the ground is work on your store design and list products.

1. Customize your design.

Have you ever painted by numbers? Design experience on modern ecommerce platforms is pretty similar to that. Instead of starting with a blank canvas, you rely on a website theme — your set of pointers, pre-mapping the final store look.

You can still be creative though, changing colors, layouts, fonts and other visual elements or even adding new elements to your online store.

When it comes to CBD ecommerce store design make sure that:

Key product information has a prominent spot: Most of your customers will want to know the key product specs: dosage/strength, hemp origin, extraction method, and possible benefits. Make sure all of this information is displayed in a digestible manner for each type of product. CBDistillery goes straight to business and highlights product ingredients and suggested use:

Mind the navigation: Since CBD is still a somewhat new niche, expect to see an influx of first-time buyers. These folks will need some extra hand-holding, unlike regular users. Design your on-site navigation to accommodate their customer journey. Create descriptive product categories and sub-categories, organizing your products by consumption method, strengths, use cases. You can also create a quick self-assessment quiz and place it in the header area, to make more personalized product recommendations.

2. Add products and descriptions.

In the CBD space, your product descriptions should be more than just convincing. They also need to be:

Accurate and fact-based.

Devoid of any health claims.

Cliche- and jargon-free.

When it comes to CBD marketing , FDA does not allow businesses to suggest that any of their CBD products can “diagnose,” “cure,” “treat,” or “prevent” any type of medical condition. Even if it’s tempting, don’t go making any big claims.

What you can do though is reference actual medical research done around CBD usage. Also, you can leverage the voice of customer data — public/private reviews, first-hand accounts/stories, general feedback — in your product listings.

Lastly, don’t write overly complex product descriptions. Not every store visitor will be a CBD connoisseur, familiar with the industry lingo. So while you should always provide ‘technical’ product information, avoid niche chemical terms, industry jargon and odd CBD pop culture references.

3. Shoot and upload product photos.

Ecommerce photos do two important things:

Act as an extension of your brand.

Help sway customers’ purchase decisions.

For example, 90% of Etsy shoppers said that product image quality is a purchase trigger for them. 

If you have the budget, hire a professional photographer to shoot a series of product-only and lifestyle images for your brand. Those short on cash can also snap amazing ecommerce pictures on a budget .

Determine Shipping and Payment Terms

After you designed your store layout and organized your product catalog, you need to sort out how your products will reach their new owners.

1. Determine your shipping policy.

Shipping is important to ecommerce consumers. So you don’t want to let them down in that department. To work out the optimal shipping policy for your CBD business ask yourself these questions:

What’s the threshold I set for ‘free shipping’? For 79% of US consumers “free shipping” is a strong prompt to buy online more. But do people get upset when there isn’t such an option? In general, yes, over a third of consumers will be upset if there’s no complimentary shipping for an order valued above £135 ($150). Determine a reasonable threshold for your brand based on anticipated average order value.

Do you plan to offer a variable fee? Destination-based or weight-based shipping fees can help a smaller retailer reduce logistics costs. But they may alienate some customers too: 50% of abandonments happen when the shipping/tax costs are too high. The fix? Provide estimated shipping costs or a delivery calculator option pre-check out if you plan to use variable fees.

What delivery timeline is feasible? Most people are spoiled by Amazon Prime next-day deliveries, but few smaller brands can pull off the same levels of service nation-wide. So choose your battles. Limit same-day delivery to your city/state only. Set the right expectations regarding priority/express delivery if you plan to offer such.

Which logistics carrier works best? Not all carriers have straight policies regarding CBD shipments. Do your research carefully. For example, while UPS allows shipping hemp and CBD-infused products, they also state that “[we] reserve the right to dispose of any shipment containing Marijuana, Hemp or Hemp products tendered for shipment which Shippers are prohibited from shipping, which UPS is not authorized to accept, which UPS states that it will not accept, or which UPS has a right to refuse.” That’s not very reassuring.

2. Select an ecommerce shipping solution.

Your next step is to select supporting shipping and fulfillment software — a tool that will help you set shipping rates, manage logistics, print labels and auto-dispatch updates to customers. To minimize hassle and mistakes, your app should integrate directly into your ecommerce platform. You can discover different shipping and fulfillment apps on the BigCommerce marketplace . Don’t forget to check if your pick also iterates with the carrier you plan to use!

3. Choose a payment processor, fit for CBD.

CBD industry is deemed as “high risk” due to the ongoing regulatory debacle. Thus, many payment processors choose to exclude CBD sellers to minimize their operational risks. But you are not completely out of options. To accept payments from customers, you can work with a specialized payment processor who knows how to handle high-risk business.

BigCommerce, for example, lets CBD businesses choose among 65 payment gateways that can be used to do business in over 100 countries, using some 250 local payment methods. Get to know more about how payment processing works for CBD companies .

Market Your CBD Company

Now that you are up and operational, you need to focus on customer acquisition. While the CBD industry is trendy right now, shoppers won’t flock to you on autopilot. Unless you set yourself up with a solid marketing system.

1. Focus on content.

CBD products are still largely misunderstood often, due to shady marketing from other brands or bogus medical claims made by self-proclaimed gurus. Build your initial customer base by seeding accurate content. Educate the interested, but cautious, buyers about:

Different product types.

CBD extraction methods.

Possible benefits and results.

Potential side-effects.

Correct usage/dosage.

The hemp industry as a whole.

Invite industry experts and use claims from verified sources to create more comprehensive content than your competition. Focus both on your blog and social media especially, as that’s where most younger consumers go looking for both product inspiration and info.

2. Leverage SEO.

Publishing well-research content is key to dominating the search engine results. Especially with the latest Google update called ‘ passage indexing ’. By honing its AI algorithms, Google now indexes individual passages from a web page (rather than just the entire page) to help users find needle-in-a-haystack info.

So for instance, if I’m googling something like “What’s the best strength of CBD oil?”, I’m redirected to a highlighted result on the page:

Source: Way of Leaf

For CBD businesses this SEO change is a great opportunity to attract top-of-the-funnel customers and convert them with educational content.

Since SEO-competition around CBD-related keywords is pretty intense, going after long-tail, less-searched keywords can help you build the initial traffic, while you work on further optimizations .

3. Partner with influencers.

Much of CBD’s current popularity comes as a direct result of patients’ advocacy and evangelism. First-hand stories from people, whom CBD helped cope with chronic pain and seizures, initially spurred the mass-interest in the plant both for therapeutic and wellness purposes.

Today, a ton of celebs are outspoken fans of the CBD. Some of them even launched their CBD businesses. So finding credible advocates for your brand shouldn’t be an issue. Just ensure that you are partnering with people who share your brand beliefs and can speak about CBD with authority. Also, don’t forget about mandatory FTS disclosures.

Lastly, keep close tabs on the latest FDA regulations (as these change as we speak) to make sure your communication stays in line with the requirements. Also, individual states have different regulations when it comes to CBD advertising. Be sure to verify local rules too.

4 Evergreen Issues CBD Businesses Are Facing

While entrepreneurs in the CBD industry can capitalize on the industry’s rapid boom, they should also brace themselves for a set of unique challenges. With a lack of FDA guidelines and differences in CBD regulations on the state level, running a CBD business can feel particularly gruesome at times. Especially when it comes to:

1. Banking and financing.

Sadly, CBD businesses are considered ‘high-risk’ by many financial service providers due to the aforementioned gaps in state laws and regulations. So prepare to do some walking and negotiating when opening a merchant account. Securing extra financing via business loans can be challenging too, again thanks to the bad rep the cannabis industry has among certain FIs. But don’t despair. There are some hemp-friendly banks and investors in the field too.

2. Payment processing.

Payment processors aren’t making life easier for CBD sellers either. Most wrongly stigmatize such companies, unlike BigCommerce. Since 2019, we are offering our customers access to an array of hemp-friendly payment processors, along with other essential tools for building an ecommerce store.

3. Business insurance.

Insurers are slow to act on the recent legalization of hemp and hemp-derived products. Just like conservative banks, they are often barring CBD companies altogether or burden them with crazy-high premiums. But having a solid insurance plan is crucial for your company’s liability. So don’t skim on getting a good plan from a CBD-friendly insurer.

4. Differentiation from the competition.

With a slew of businesses touting ‘cannabis’ as a customer attractor, it may be difficult to stand out even when you sell genuine, high-quality cannabis products. A 2017 Penn University study , found that 70% of cannabinoid products sold online had issues with labeling. Over 42% of CBD products were under-labeled, meaning that they contained more CBD than stated. Some 26% were over-labeled — they had a lower condensation of cannabinoid than stated.

Such happenings, along with misleading marketing and grossly overstated claims regarding CBD’s effectiveness are making new customers skeptical towards recent market entrants. Gain their trust by being positively different when it comes to:

Transparency : From telling where your hemp plants grow to display proper certification of analysis, explain to your customers what they are about to purchase and munch.

Accuracy : Avoid unverified scientific statements (even if they look promising for marketing). Check your sources, invite known experts to help you create content and educational brochures. Make honest, no-nonsense claims to set yourself apart from the sleazier types.

Storytelling: Some of the most successful CBD businesses were launched by long-term CBD evangelists and regular folks, whose chronic health condition was majorly alleviated by CBD. Your unique story, cementing your brand mission and values, can help you build a stronger emotional connection with your target audience. For example, CBD for Life tells a story of how their founder concocted a CBD cream to help her alleviate the back pain.

Source: CBD for Life

3 Core Tips for Nurturing Your CBD Business

New ecommerce companies are very tender. If you want your CBD business to grow, evolve and always be ripe, here are three things you should consider doing.

1. Ask for help.

Between murky regulations and operational issues, new CBD business owners will have a lot of their platter. While everything is searchable on Google these days, you shouldn’t underestimate the value of a mentor aka someone who already walked the same walk before you.

As Andre Bourque said on Forbes :

“That’s the rub of excelling in the cannabis industry: there’s no model of excellence right now. It’s a fluid and shifting industry that didn’t really exist just a few years ago.”

That makes finding a good industry mentor somewhat challenging. Yet, not impossible. AngelList has 1,210 marijuana investors and that’s just one place. Non-profit organizations such as CBD Alliance , National Hemp Association and Vote Hemp are also great places to find new industry connections and support.

2. Have patience.

Fast traction is often viewed as a given in the ecommerce industry. You sure have heard literally overnight success stories where some “$500 Instagram ad drove $50,000 in sales in a day”.

In the CBD industry, paid ecommerce ads are not an option. Click-bait marketing can cause compliance issues, while content marketing and SEO both take time to work. So take a deep breath and prep several buckets of mental patients to methodically work through the different kinks of running CBD operations.

3. Understand the industry.

Despite (or because of) slow FDA response, the CBD industry keeps evolving in somewhat contradictory directions. While some states e.g. Texas removed the ban on selling edible CBD products in 2019., others banned CBD-infused foods and beverages last year.

Subsequently, market trends and consumer trends change from week to week too. Especially, when some celebrity like Gwyneth Paltrow announces her involvement in a new CBD venture or throws a CBD-themed baby shower as Kim Kardashian did.

For sure, no CBD business can or should stay atop of all the latest trends and fads. But they do need to keep close tabs on emerging tendencies among their clients, changes in compliance requirements, along with other major industry happenings.

Wrapping Up

CBD is an interesting product to trade. On one hand, you can make a genuine difference by supplying your customers with life-improving goods. On the other, you also need to constantly educate the general public (along with some B2B partners and other stakeholders) about your products’ actual benefits, their legality status and lack of connection with THC-dominant marijuana.

That can be a tough battle. But well worth it when you look at the CBD industry sales prospects again. Grandview Research estimates that the CBD market will swell by a compound annual growth rate of 22.2% between 2019 and 2025.

And you can be part of that revenue pool too if you launch your online CBD business today!

This material does not constitute legal, professional or financial advice and BigCommerce disclaims any liability with respect to this material. Please consult your attorney or professional advisor on specific legal, professional or financial matters.

Tomas Laurinavicius is a co-founder of Content Writing Jobs, lifestyle blogger, content marketing consultant, and BigCommerce researcher from Lithuania. He writes about lifestyle design, productivity, and entrepreneurship on his blog and lifestyle design newsletter.

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How to Start a Successful CBD & Hemp Retail Business

How to start a successful retail CBD and Hemp Business

The CBD industry is going mainstream in the United States and is growing exponentially. Experts estimate that CBD sales in the U.S will exceed an incredible $20 billion by the beginning of 2024, so now is the perfect time to open a CBD business. The industry is going from strong to stronger as recent changes in legislation have contributed to the dispersion of stigmas surrounding the hemp plant and CBD products and allowing the products to be accepted and gobbled up by the general public. Strike while the iron is hot! And right now its heating up!

This step-by-step guide will tell you everything you need to know about how to sell CBD and help you get started opening a CBD store of your very own.

Step 1. Go with a CBD Franchise or Create your Own CBD Brand Name

You're probably not surprised to find out that the hard work begins well before you open your business's doors to the public. One of the first things you'll have to do is decide whether you're going to create your own CBD brand or open a CBD franchise store.

If you're planning on creating your own brand, you'll have a lot more work to do. Whereas if you decide to opt for opening a franchise, a lot of the hard work has been taken care of for you. Trust in a brand's identity and supply chain issues won't be of concern to you when opening a franchise. Opening a franchise gives you the independence of opening a small business but with the benefits of a large business's network and resources.

Hemp Geek is a good example of a franchise model. By becoming a franchisee, you gain access to use of the company's trademark, ongoing support from the franchiser, and the ability to sell their top-quality goods.

Step 2. Sourcing Wholesale CBD Products

Where are you going to buy your wholesale cbd products from? It's vital for all CBD businesses to have a consistent source of top-quality products. This can only be achieved by working with a reputable provider. HempWholesaler.com is an industry-leading provider of all things related to CBD and Hemp. We carry the widest selection of CBD brands and products anywhere and boast an impressive range of products that are constantly updating. The team at HempWholesaler.com are experts in helping start-ups furnish their store with all they need to flourish. Also, HempWholesaler.com can also finance inventory purchases for buyers who meet their requirements and who are looking to buy CBD products for their store.

Step 3. High-Quality Signage

High-quality signage is a must for any new CBD business. Don't cheap out on a sign as it's one of the first things a potential customer will see. It's a cost-effective marketing tool that helps create a positive first impression and landmarks your business in the area. Bright lights are the best as they're eye-catching and help to relay important information to your customers about what products you provide.

Step 4. Retail Displays & Layouts

Step 5. Filing and LLC and other Legal Work

Filing an LLC and starting a business is easy now-a-days! Using a company such as Legal Zoom can help you get your business legally prepared to open with minimum effort and expenditure on your behalf. It's a cheaper alternative to hiring a lawyer and is just as effective. Filing an LLC is important and is definitely something you should consider doing sooner rather than later.

Step 6. Location, Location, Location

One of the most important aspects of opening a store is where you're going to open it. If it's in the middle of nowhere or on the outskirts of your city, you may struggle to keep it open. As people from all walks of life are using CBD products, you should focus on an area with high foot traffic, preferably in a plaza with an anchor store or in an area of high retail traffic. As they say, location is everything in business. 

Choosing the right area is only the first step of finding your perfect retail location to open a CBD store. The physical location may seem right, but what about competition in the area? If there are a ton of CBD stores near you, you'll have to give it some serious thought about whether this will help or hinder your business.

Other questions you should ask include:

Is there parking for staff and customers?

How easy is it to access?

Is it visible from the road or is it tucked away from everything?

When you've considered these factors, the last thing to consider is the size of any available units. If it's too small, you could be losing out on revenue from being unable to stock a full range of products. If it's too large, your rental fees may be far greater than your initial profit and your business may sink as a result of this. Finding a retail unit that's the right size is a keep aspect of opening a CBD store.

Step 7. Advertising

Local radio stations are definitely your most effective means of advertising your CBD store. Local radio equals local listeners, and most people like checking out a new store that's just opened in their area. Unfortunately, Facebook and Google don't accept ads for CBD-related businesses, so instead you must opt for more traditional means of advertising your new CBD business.

Step 8. Grand Opening Promotions

Ready to open? Want a ton of free advertising? Throw a grand opening event and contact the local news. They'll make a story out of the opening and will get the attention of tons of new potential customers!

There's no better way to entice customers into a new store than with promotions. Small discounts or a free low-value product when you X amount of money is spent, are both great ways of getting people to make a purchase.

One of the best ways of converting one-time customers into returning customers is with a loyalty program. Whether you decide to implement a points program, a spend program, or even a paid-for VIP program, you'll notice an increase in regular customers that's guaranteed to boost your business's turnover.

Step 9. Get Your CBD Business Listed on Google and Apple Maps

Making your business easily discoverable by registering for Google Maps and Apple Maps helps people track you down more easily. It can also help drive customers your way who may not have known of your existence. For example, if someone was to search for "CBD store" while using Google or Apple Maps, your business will pop up to them and they could decide you're the store for them. To get listed on Apple maps go to https://mapsconnect.apple.com/ and to list your business on google maps go to https://www.google.com/business/

Step 10. Create a Rockin' Social Media Presence

A social media presence is a must for local businesses. Creating Facebook, Instagram, and Twitter profiles can help you to stay fresh in the mind of locals and attract them to your store. By sharing meaningful content and information regarding any special discounts or offers your business has, you can ensure your social media accounts will gain traction with locals.

Step 11. Prioritize Customer Service

Ensuring your customers leave your store happier than when they come in a vital part of retail. Providing customers with a positive experience can help your store stand out as well as benefit from one of the most important forms of advertising that money simply can't buy - word of mouth recommendations.

Customers are the foundation of your business's success, so it makes sense to keep them as happy as possible. Answer questions, make recommendations, provide a service with a smile and you'll have customers flocking to your new CBD store.

Step 12. Competitively Price Your Products

If you're pricing things to high, they simply won't sell. Price them too low, however, and you run the risk of not being able to afford business-related expenditures thanks to having a low profit margin. The key is to price things in a manner where you still make a comfortable profit on each sale, but where you're not the most expensive option in your area.

These days, people are looking to save as much money as possible and won't hesitate to go elsewhere or shop online if they feel your prices are too steep. If there are other CBD stores in your area, it may be worth paying them a visit so you can gauge how much they're selling their products for.

Step 13. Only Hire Knowledgeable Staff

There's nothing worse than asking a question and not getting a direct answer. Hiring staff who know the ins and outs of CBD is essential for any new CBD retail business. In an industry as complex as CBD, it's likely that virtually every customer will have questions to ask, and by having staff who know the products inside out, you can increase the strength of your brand's identity and the relationship with customers.

Step 14. Creative Marketing is Crucial

Creative marketing is so much more than just making your customers smile, it's a way of shaping your business's identity and helping it stick in the minds of local residents. Taking a creative approach to marketing your CBD business can have a big impact on your business in the long run. It's safe to say, when it comes to marketing, it pays off to be creative. Do something that will stick in the mind of potential customers and ensure that your store will be the first name that comes to mind whenever they hear CBD.

With the help of this guide, you should be well on your way to knowing how to open your own CBD store. It's a long road and it's guaranteed to be a challenge, but the feeling of satisfaction you get when your customers tell you how much your products help them will be more than enough of a reward.

Step 15. Let us Help!

HempWholesaler.com is not only here to provide the best selection of wholesale CBD products at the guaranteed lowest distributor pricing... but also to offer any sort of assistance and help you may need in opening your store, choosing products, choosing an initial order, deciphering CBD lingo or any other issues or opportunities that may arise. Your success means our success... and we want to succeed! Feel free to contact us with any questions or concerns!

Clifford Hurley

Journalist, professional researcher and CBD enthusiast

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How to open a CBD shop?

Are you keen to open a CBD shop but don't know where to begin? Then you're in luck because this guide will lead you through all the steps required to check if your business idea can be profitable and, if so, turn it into a reality. 

Our guide is for prospective entrepreneurs who are thinking about starting a CBD shop no matter how far they are in their journey - whether you’re just thinking about it or in the middle of market research this guide will be useful to you.

Think of this as your blueprint: we cover everything you need to know about opening a CBD shop and what key decisions you’ll need to make along the way.

Ready? Let’s get started!

In this guide:

• Understanding how a CBD shop works
• Assembling your CBD shop's founding team

Conducting market research for a CBD shop

• Choosing the right concept and positioning for your CBD shop
• Deciding where to base your CBD shop

Choosing your CBD shop's legal form

• Calculating the budget to open a CBD shop
• Creating a sales & marketing plan for your CBD shop
• Building your CBD shop's financial forecast

Finding a name and registering your CBD shop

Deciding upon the corporate identity of your cbd shop.

• Understanding the legal and regulatory steps involved in opening a CBD shop

Writing a business plan for your CBD shop

Financing the launch of your cbd shop.

• Launching your CBD shop and monitoring progress against your forecast

Key takeaways

What is the business model of a cbd shop.

Before thinking about starting a CBD shop, you'll need to have a solid understanding of its business model (how it generates profits) and how the business operates on a daily basis.

Doing so will help you decide whether or not this is the right business idea for you, given your skillset, personal savings, and lifestyle choices.

Looking at the business model in detail will also enable you to form an initial view of the potential for growth and profitability, and to check that it matches your level of ambition.

The easiest ways to acquire insights into how a CBD shop works are to:

Speak with CBD shop owners

Undertake work experience with a successful cbd shop, participate in a training course.

Talking to seasoned entrepreneurs who have also set up a CBD shop will enable you to gain practical advice based on their experience and hindsight.

Learning from others' mistakes not only saves you time and money, but also enhances the likelihood of your venture becoming a financial success.

Gaining hands-on experience in a CBD shop provides insights into the day-to-day operations, and challenges specific to the activity.

This firsthand knowledge is crucial for effective planning and management if you decide to start your own CBD shop.

You'll also realise if the working hours suit your lifestyle. For many entrepreneurs, this can be a "make or break" situation, especially if they have children to look after.

First-hand experience will not only ensure that this is the right business opportunity for you, but will also enable you to meet valuable contacts and gain a better understanding of customer expectations and key success factors which will likely prove advantageous when launching your own CBD shop.

Undertaking training within your chosen industry is another way to get a feel for how a CBD shop works before deciding to pursue a new venture.

Whichever approach you go for to gain insights before starting your CBD shop, make sure you familiarise yourself with:

• The expertise needed to run the business successfully (do you have the skills required?)
• How a week of running a CBD shop might look like (does this fit with your personal situation?)
• The potential turnover of your CBD shop and long-term growth prospects (does this match your ambition?)
• The likely course of action if you decide to sell the company or retire (it's never too early to consider your exit)

At the end of this stage, you should be able to decide whether opening a CBD shop is the right business idea for you given your current personal situation (skills, desires, money, family, etc.).

Create your business plan online!

Think your business idea could be profitable? Find out how with a business plan

Assemble your CBD shop's founding team

The next step to start your CBD shop is to think about the ideal founding team, or to go in alone (which is always an option).

Setting up a business with several partners is a way of reducing the (high) risk of launching a CBD shop since it allows the financial risk of the project to be shared between the co-founders.

This also allows the company to benefit from a greater diversity of profiles in the management team and to spread the burden of decision-making over several shoulders.

But, running a business with multiple co-founders brings its own challenges. Disagreements between co-founders are quite common, and these can pose risks to the business. That's why it's crucial to consider all aspects before starting your business.

To make an informed decision, we suggest asking yourself these questions:

How many co-founders would increase the project's chances of success?

Do you and your potential partners share the same aspirations for the project, what is your plan b in case of failure.

Let's examine each of these questions in detail.

The answer to this question will depend on a number of factors, including:

• Your savings compared with the amount of initial capital needed to launch the CBD shop
• The skills you have compared with those needed to make a success of such a project
• How you want key decisions to be taken in the business (an odd number of partners or a majority partner is generally recommended to avoid deadlock)

Put simply, your partners contribute money and/or skills, and increasing the number of partners is often a good idea when one of these resources is in short supply.

One of the key questions when selecting your potential partners will be their expectations. Do you want to create a small or large business? What are your ambitions for the next 10 or 15 years?

It's better to agree from the outset on what you want to create to avoid disagreements, and to check that you stay on the same wavelength as the project progresses to avoid frustration.

Of course, we wish you every success, but it's wise to have a plan B when setting up a business.

How you handle the possibility of things not working out can depend a lot on the kind of relationship you have with your co-founders (like being a close friend, spouse, former colleague, etc.) and each person's individual situation.

Take, for instance, launching a business with your spouse. It may seem like a great plan, but if the business doesn't succeed, you could find yourself losing the entire household income at once, and that could be quite a nerve-wracking situation.

Similarly, starting a business partnership with a friend has its challenges. If the business doesn't work out or if tough decisions need to be made, it could strain the friendship.

It's essential to carefully evaluate your options before starting up to ensure you're well-prepared for any potential outcomes.

The next step in launching a CBD shop is to carry out market research. Let's take a look at what this involves.

The objectives of market research

The objective here is very simple: to assess the level of demand for your business and whether there is an opportunity for it to thrive in your chosen location. 

The first step will be to check that the market is not saturated with competing offers and that there is room for a new player: your CBD shop.

Your market analysis will also help you identify a concept and market positioning that has every chance of being successful in your target market, thereby helping increase your business's chances of success.

Carrying out market research for your CBD shop will also enable you to better understand the expectations of your future customers and the most effective ways to communicate with them in your marketing plan.

Analyse key trends in the industry

Your market research should start with an industry analysis in order to gain a good understanding of the main players and current trends in your sector.

Once you've delved into the current state of the market, it will be time to assess what proportion of your target market can be seized by your CBD shop. To do this, you will need to consider both the demand and supply side of the market.

Assess the demand

After checking out the industry, let's shift our focus to figuring out what your potential customers want and how they like to buy.

A classic mistake made by first-time entrepreneurs is to assess demand on the global or national market instead of concentrating on their target market. Only the market share that can be captured by your company in the short term matters. 

Your demand analysis should seek to find answers to the following questions:

• Who are your target customers?
• How many are there?
• What are their expectations?
• What are their buying habits?
• How much budget do they have?
• What are the different customer segments and their characteristics?
• What are the main distribution channels and means of communication for reaching each segment?

The aim of the demand analysis is to identify the customer segments that could be targeted by your CBD shop and what products and services you need to offer to meet their expectations.

Analyse the supply side

You will also have to familiarize yourself with the competing CBD shops on the market targeted by your future business.

Amongst other things, you’ll need to ask yourself:

• Who are the main competitors?
• How many competitors are already present?
• Where are they located?
• How many people do they employ?
• What is their turnover?
• How do they set their prices?
• Are they small independent businesses or national players?
• Do they seem to be in difficulty or are they flourishing? 
• What is their market positioning?
• What types of products and services do they offer?
• What do customers seem to like about them?

The aim of the competitive analysis is to identify who your competitors will be and to gather information that will help you find a differentiating commercial positioning (more on that later in this guide).

Regulations

Conducting market research is also an opportunity to look at the regulations and conditions required to do business.

You should ask yourself the following questions:

• Do you need to have a specific degree to open a CBD shop?
• Do you need specific licences or permits?
• What are the main regulations applicable to your future business?

Given that your project is at an early stage, your focus should be to clear that there are no roadblocks from a regulatory standpoint before you deep dive into the planning process.

Once your project is more advanced, you will have the opportunity to talk about regulation more in-depth with your lawyer.

Concluding your market research

By the time your market research is completed, you should have either:

• Pinpointed an untapped business opportunity
• Or arrived at the realisation that the market is saturated, prompting the search for alternative business ideas or models.

If the conclusion is that there is an opportunity in the market to cater to one or more customer segments currently overlooked by competitors, that's great!

Conversely, if you come to the conclusion that the market is already saturated, don’t panic! The good news is that you won’t spend several years working hard on a project that has little chance of success. There is no shortage of business ideas either - at The Business Plan Shop, we have identified more than 1,300 potential business ideas!

Don't start from scratch!

With dozens of business plan templates available, get a clear idea of what a complete business plan looks like

Choose the right concept and position your CBD shop on the market

The next step to start a CBD shop is to choose the company's market positioning.

Market positioning refers to the place your product and service offering occupies in customers' minds and how it differs from how competitors are perceived. Being perceived as a high-end solution, for example.

To do this, you need to take the following considerations into account:

How can you make your business stand out from your competitors?

Can you consider joining a franchise as a way to lower the risks involved, is it better to start a new cbd shop or acquire one that is already up and running, how to make sure your concept meets customer needs.

Let's look at each of these in a little more detail.

When you decide to start your own CBD shop, you're facing an upward challenge because your competitors are already ahead. They have a good reputation, loyal customers, and a strong team, while you're just getting started.

Opening a CBD shop offering exactly the same thing as your competitors is risky and potentially doomed to fail: why would customers take the risk of choosing a newcomer rather than a company with a proven track record?

This is why it is advisable to avoid direct confrontation by adopting a differentiated market positioning wherever possible: in other words, by offering something different or complementary to what is available on the market.

To find a market positioning that has every chance of success, you need to ask yourself the following questions: 

• Can you negate direct competition by serving a customer profile that is currently poorly addressed by your competitors?
• Can your business provide something different or complementary to what is already available on the market?
• Why will customers choose your CBD shop over the competition? 
• How will your competitors react to your entry into their market?
• Is the market sufficiently large and fragmented (i.e. not dominated by a few large chains) to allow you to set up an independent business, or is it better to consider another avenue (see below)?

A good way of getting a market positioning that is guaranteed to seduce customers is to join a group with a proven concept.

Admittedly, joining a franchise is not necessarily as exciting as opening a CBD shop with a clean slate, everything to invent and total freedom to do so, but it is a proven way of reducing the risk of entering the market.

By joining a franchise, you will benefit from a concept that is successful with customers, the brand recognition of a large network, and operational support with regard to supplier relations, processes and operating standards, etc.

In return, you will have to pay an entry fee and an annual royalty (on your company's sales).

Joining a franchise is a trade-off where you need additional capital and get less freedom in exchange for a lot less risk. It's not for everyone, and it's not possible everywhere (franchise opportunities vary from region to region), but it is nevertheless an option you should explore.

Another way to benefit from a proven concept and reduce the risk of your project is to take over a CBD shop. 

Buying a CBD shop allows you to get a team, a customer base, and above all to preserve the balance on the market by avoiding creating a new player. For these reasons, taking over a business is a lot less risky than creating one from scratch.

Taking over a business also gives you greater freedom than franchising, because you have the freedom to change the positioning and operations of the business as you see fit.

However, as you can imagine, the cost of taking over a business is higher than that of opening a CBD shop because you will have to finance the purchase.

Once you have decided on your concept and the market positioning of your future CBD shop, you will need to check that it meets the needs, expectations and desires of your future customers.

To do this, you need to present it to some of your target customers to gather their impressions.

Where should I base my CBD shop?

The next step in our guide on starting a CBD shop involves making a key choice about where you want your business to be located.

Picking the ideal location for your business is like selecting the perfect canvas for a painting. Without it, your business might not showcase its true colors.

We recommend that you take the following factors into account when making your decision:

• Visibility and foot traffic - For a retail business like a CBD shop, it is important to be located in an area with high visibility and foot traffic to attract potential customers.
• Parking space, road and public transport accessibility - This is important for customers who may be driving or using public transportation to reach the CBD shop. Having easily accessible parking and public transport options can make it easier for customers to visit the store.
• Proximity to target customers - It is important for a CBD shop to be located in an area with a high concentration of potential customers, such as in a city center or near a college campus.
• Competitor presence - While some competition can be beneficial, it is important for a CBD shop to not be located in an area with an oversaturation of competitors. This can make it difficult to stand out and attract customers.
• Efficient logistics - For an industrial business like a CBD manufacturer, efficient logistics are essential for the production and distribution of products. This includes access to transportation and storage facilities.
• Storage space - As a CBD shop will likely have a variety of products, it is important to have adequate storage space to keep inventory organized and easily accessible.
• Availability of skilled labor - For an industrial business, having access to skilled labor is important for the production and operation of the business. This can include trained employees or contractors.
• Easy access to main roads - For a construction business, it is important to have easy access to main roads for transporting equipment and materials to job sites.
• Climate and soil quality - For an agricultural business, the climate and soil quality can greatly impact the success of the business. It is important to choose a location with suitable conditions for growing and harvesting crops.
• Adequate infrastructure - This includes access to utilities, telecommunications, and other necessary infrastructure for the operation of the business.
• Premises layout - For a hospitality business like a CBD restaurant or hotel, the layout of the premises is important for creating a welcoming and comfortable atmosphere for customers.
• Space to grow - For an e-commerce or online CBD business, having room to grow and expand operations is important for future success.
• Demographic of local population - This is important for a transportation business as the target demographic will determine the type of services needed and the most profitable routes to focus on.

This list is not comprehensive and will have to be adjusted based on the details of your project. 

The parameters to be taken into account will also depend on whether you opt to rent premises or buy them. If you are a tenant, you will need to consider the conditions attached to the lease: duration, rent increase, renewal conditions, etc.

Lease agreements differ widely from country to country, so it's essential to review the terms that apply to your situation. Before putting pen to paper, consider having your lawyer look carefully at the lease.

The next step to open a CBD shop is to choose the legal form of your business.

The legal form of a business simply means the legal structure it operates under. This structure outlines how the business is set up and defines its legal obligations and responsibilities.

Why is your CBD shop's legal form important?

Choosing the legal form for your CBD shop is an important decision because this will affect your tax obligations, your personal exposure to risk, how decisions are made within the business, the sources of financing available to you, and the amount of paperwork and legal formalities, amongst other things.

The way you set up your business legally will impact your taxes and social contributions, both at a personal level (how much your income is taxed) and at the business level (how much the business's profits are taxed).

Your personal exposure to risk as a business owner also varies based on the legal form of your business. Certain legal forms have a legal personality (also called corporate personality), which means that the business obtains a legal entity which is separate from the owners and the people running it. To put it simply, if something goes wrong with a customer or competitor, for example, with a corporate personality the business gets sued, whereas without it is the entrepreneur personally.

Similarly, some legal forms benefit from limited liability. With a limited liability the maximum you can lose if the business fails is what you invested. Your personal assets are not at risk. However, not all structures protect you in such a way, some structures may expose your personal assets (for example, your creditors might try to go after your house if the business incurs debts and then goes under without being able to repay what it owed).

How decisions are made within the business is also influenced by the legal form of your CBD shop, and so is the amount of paperwork and legal formalities: do you need to hold general assemblies, to produce annual accounts, to get the accounts audited, etc.

The legal form also influences what sources of financing are available to you. Raising capital from investors requires having a company set up, and they will expect limited liability and corporate personality.

What are the most common legal structures?

It's important to note that the actual names of legal structures for businesses vary from country to country . 

But they usually fall within two main types of structures:

Individual businesses

Individual businesses, such as sole traders or sole proprietorships, are legal structures with basic administrative requirements.

They primarily serve self-employed individuals and freelancers rather than businesses with employees.

The main downside of being a sole trader is that there's usually no legal separation between the business and the person running it. Everything the person owns personally is tied up with the business, which can be risky.

This means that if there are problems or the business goes bankrupt, the entrepreneur's personal assets could be taken by creditors. So, there's a risk of personal liability in case of disputes or financial issues.

It is also not possible to raise equity from investors with these structures as there is no share capital.

Despite the downsides, being a sole proprietorship has some advantages. There is usually very little paperwork to get started, simpler tax calculations and accounting formalities.

Companies are all rounders which can be set up by one or more individuals, working on their own or with many employees.

They are recognized as a distinct entity with their own legal personality, and the liability is usually limited to the amount invested by the owners (co-founders and investors). This means that you cannot lose more than you have invested in the business.

This separation ensures that in legal disputes or bankruptcy, the company bears primary responsibility, protecting the personal assets of the founder(s) and potential investor(s).

How should I choose my CBD shop's legal structure?

Deciding on the legal structure is usually quite straightforward once you know how many co-founders you'll have, whether you'll have employees, and the expected revenues for the business.

A good business idea will be viable whatever the legal form you choose. How businesses are taxed changes every year, therefore one cannot rely on specific tax benefits tied to a particular structure when deciding to go into business.

One easy way to proceed is to take note of the legal structures used by your top five competitors, and assume you're going with the most commonly chosen option. Once your idea is mature and you're prepared to formally register the business, you can validate this assumption with a lawyer and an accountant.

Can I switch my CBD shop's legal structure if I get it wrong?

You can switch your legal setup later on, even if it involves selling the old one to a new entity in some cases. However, this comes with extra costs, so it's better to make the right choice from the beginning if you can.

Assess the startup costs for a CBD shop

The next step in creating a CBD shop involves thinking about the equipment and staff needed for the business to operate.

After figuring out what you need for your business, your financial plan will reveal how much money you'll need to start and how much you might make (check below for more details).

Because every venture is distinctive, providing a reliable one-size-fits-all budget for launching a CBD shop without knowing the specifics of your project is not feasible.

Each project has its own particularities (size, concept, location), and only a forecast can show the exact amount required for the initial investment.

The first thing you'll need to consider is the equipment and investments you'll need to get your business up and running.

Startup costs and investments to launch your CBD shop

For a CBD shop, the initial working capital requirements (WCR) and investments could include the following elements:

• Storefront Renovation and Design: This includes any renovations or improvements to the physical appearance of your CBD shop, such as flooring, lighting, paint, and fixtures. These updates can help create an inviting and professional atmosphere for your customers.
• Equipment and Supplies: This category includes any necessary equipment and supplies for your CBD shop, such as display cases, packaging materials, and point-of-sale systems. These items are essential for the day-to-day operations of your shop.
• Inventory: As a CBD shop, your inventory will be a significant capital expenditure. This includes purchasing CBD products, as well as any other related items you plan to sell, such as accessories or merchandise. It is crucial to carefully plan and budget for your inventory to ensure you have enough to meet customer demand without overspending.
• Security System: A security system is a necessary investment to protect your CBD shop from theft and vandalism. This may include cameras, alarms, and other security measures. It is important to prioritize the safety and security of your shop and its contents.
• Furniture and Fixtures: This category includes any furniture and fixtures needed for your CBD shop, such as display tables, shelving, and seating. These items not only serve a functional purpose but also contribute to the overall aesthetic and atmosphere of your shop.

Of course, you will need to adapt this list to your business specificities.

Staffing plan of a CBD shop

In addition to equipment, you'll also need to consider the human resources required to run the CBD shop on a day-to-day basis.

The number of recruitments you need to plan will depend mainly on the size of your company.

Once again, this list is only indicative and will need to be adjusted according to the specifics of your CBD shop.

Other operating expenses for a CBD shop

While you're thinking about the resources you'll need, it's also a good time to start listing the operating costs you'll need to anticipate for your business.

The main operating costs for a CBD shop may include:

• Rent: This expense includes the cost of leasing or renting a physical space for your CBD shop.
• Utilities: This includes electricity, water, and gas costs for your shop.
• Inventory: This expense covers the cost of purchasing CBD products to sell in your shop.
• Staff Salaries: This includes the wages and benefits for your shop's employees.
• Accountancy Fees: You may choose to hire an accountant to help with bookkeeping and tax preparation for your shop.
• Insurance: This expense covers the cost of insuring your shop against potential risks or liabilities.
• Marketing and Advertising: This includes the cost of promoting your CBD shop through various channels such as social media, print ads, and events.
• Software Licenses: You may need to purchase software licenses for point-of-sale systems, inventory management, or accounting software.
• Banking Fees: This includes fees for maintaining a business bank account, processing credit card payments, and other financial transactions.
• Packaging and Shipping: If you offer online sales, you'll need to factor in the cost of packaging materials and shipping fees.
• Cleaning and Maintenance: This expense covers the cost of keeping your shop clean and well-maintained.
• Professional Services: You may need to hire outside help for legal, marketing, or consulting services.
• Training and Development: This includes the cost of training your staff and investing in their professional development.
• Office Supplies: This expense covers the cost of necessary office supplies such as paper, printer ink, and pens.
• Repairs and Maintenance: This includes the cost of repairing or replacing equipment, fixtures, or furniture in your shop.

Like for the other examples included in this guide, this list will need to be tailored to your business but should be a good starting point for your budget.

Create a sales & marketing plan for your CBD shop

The next step to launching your CBD shop is to think about the actions you need to take to promote your products and services and build customer loyalty.

Here, you'll be looking at the following issues:

• What is the best method to attract as many new customers as possible?
• How to build customer loyalty and spread word of mouth?
• What human and financial resources will be required to implement the planned actions?
• What level of sales can I expect to generate in return?

The precise sales and marketing levers to activate will depend on the size of your CBD shop. But you could potentially leverage some of the initiatives below.

Besides your sales and marketing plan, your sales forecast will be affected by seasonal patterns related to the nature of your business, such as fluctuations during the holiday season, and your competitive landscape.

Build your CBD shop's financial forecast

The next step to start your CBD shop: putting your financial projections together.

What is the financial forecast for a CBD shop?

A forecast is a quantified decision-making document that shows the initial investment required to open a CBD shop and the company's potential profitability and cash flow generation over the next 3 to 5 years.

As you think about your CBD shop idea, the main role of financial projections will be to help you decide whether it makes sense to create the company.

Building a financial forecast helps determine the amount of initial financing required to start your CBD shop.

In fact, creating financial projections is the only way to assess the amount of initial financing you'll need to open your CBD shop, and to make sure your project makes economic and financial sense.

Keep in mind that very few business ideas are financially viable. At The Business Plan Shop, we've seen nearly a million business start-up ideas, and we estimate that less than one in four is economically viable.

Your forecast will therefore require your full attention and constant revision, as your project matures. It's also a good idea to simulate different scenarios to anticipate several possibilities (what happens if your sales take longer than expected to ramp up, for example), so you're ready for all eventualities.

When seeking financing, your forecast will be incorporated into your business plan, which is the document you will use to present your business idea to financial partners. We'll come back to the business plan in more detail later in this guide.

Creating and updating your CBD shop's forecast is an ongoing process. Indeed, having up-to-date financial projections is the only way to maintain visibility over your company's future cash flow and cash position.

Forecasting is, therefore, the financial management tool that will be with you throughout the life of your company. Once you've started trading, you'll need to regularly compare the difference between your actual accounts and your forecasts, and then adjust them to maintain visibility over your future cash flows.

What does a financial projection look like?

Your CBD shop forecast will be presented using the following financial tables.

The projected P&L statement

The projected P&L statement for a CBD shop shows how much revenue and profits your business is expected to generate in the future.

The projected balance sheet of your CBD shop

Your CBD shop's projected balance sheet provides a snapshot of your business’s financial position at year-end.

The cash flow forecast

A projected cash flow statement for a CBD shop is used to show how much cash the business is expected to consume or generate in the years to come.

Which solution should you use to make a financial forecast for your CBD shop?

The easiest and safest way to create your CBD shop forecasts is to use an online financial forecasting software , like the one we offer at The Business Plan Shop.

There are several advantages to using professional software:

• You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
• You have access to complete financial forecast templates
• You get a complete financial forecast ready to be sent to your bank or investors
• The software helps you identify and correct any inconsistencies in your figures
• You can create scenarios to stress-test your forecast's main assumptions to stress-test the robustness of your business model
• After you start trading, you can easily track your actual financial performance against your financial forecast, and recalibrate your forecast to maintain visibility on your future cash flows
• You have a friendly support team on standby to assist you when you are stuck

If you are interested in this type of solution, you can try our forecasting software for free by signing up here .

The next step in starting a CBD shop is to decide on a name for your entity. 

For starters, you cannot take a name similar to a name already registered by a competitor or protected by a trademark without inevitably risking getting sued. So you’ll need to find a name available, and reserve it before others can.

In addition, you will probably want to use the same name for:

• Your company’s legal name - Example LTD or Example Inc
• Your trading name - Example
• A trademark - Example ® 
• Your company’s domain name - Example.com

The issue is that you’ll need to register your name in three different places almost simultaneously, but with each place having its own timeframes:

• Registering a domain name is instantaneous
• Registering a trademark takes at least 3 months (if your application is accepted)
• Registering a company depends on the country, but it's generally fairly quick

You will therefore be faced with the choice of either registering everything at once in the hope that your name will be accepted everywhere, or proceeding step by step in order to minimise costs, but taking the risk that someone else will register one of the names you wanted in the meantime.

Our advice is to discuss the strategy with your legal counsel (see further down in this guide) and to give priority to your domain names and your registered trademark. You'll always have the option of using a trading name that's different from your company's legal name, and that's not a big deal.  

To check that the name you want is not already in use, you should consult:

• Your country's business register
• The register of trademarks where you wish to obtain protection
• Your preferred search engine
• A domain name reservation company (such as GoDaddy)

If the name you want is available, you can go ahead and register it.

The next step in opening a CBD shop is to look at your company's visual identity. 

Your company's “visual identity” plays a crucial role in shaping your brand image. It helps you to be recognizable and to stand out from your competitors. 

Although you can define your visual identity yourself, it is generally advisable to call on the services of a designer or marketing agency to achieve a professional result.

At a minimum, you will need to define the following elements: 

Brand guidelines

Business cards, website theme.

Your CBD shop's logo allows others to quickly identify your company. It will be used on all your communication media (website, social networks, business cards, etc.) and official documents (invoices, contracts, etc.).

In addition to its design, it's important that your logo is available in a variety of colors, so that it can be seen on all media (white, dark background, etc.).

Having brand guidelines enables you to maintain consistency in formatting across all your communications media and official documents. 

Brand guidelines define the font (family and size), design and colours used by your brand. 

In terms of fonts, for example, you may use Roboto in size 20 for your titles and Lato in size 14 for your texts. 

The colours used to represent your brand should generally be limited to five: 

• The main colour, 
• A secondary colour (the accent),
• A dark background colour (blue or black),
• A grey background colour (to vary from white),
• Possibly another secondary colour.

Designing business cards for your CBD shop is a must, as they will allow you to communicate your contact details to your customers, suppliers, partners, potential recruits, etc. 

In principle, they will include your logo and the brand guidelines that we mentioned above.

In the same way, the theme of your CBD shop website will be based on your logo and the brand guidelines we mentioned above.

This involves defining the look and feel of your site's main graphic elements:

What legal steps are needed to start a CBD shop?

The next step in opening a CBD shop is to look in detail at the legal and regulatory formalities.

Although it is possible to do the formalities yourself and draft some of the documents detailed here, The Business Plan Shop recommends that you seek advice on these aspects from a law firm.

Registering a trademark and protecting the intellectual property of your CBD shop

One of the first things you need to do here is to protect your company's current and future intellectual property.

One way of doing this is to register a trade mark, as mentioned earlier in this guide. Your lawyer will be in a position to do the formalities for you and to help you select the classes (economic activities) and jurisdictions in which you have an interest in obtaining protection.

Your law firm can also advise you on other ways of protecting your company's intellectual property.

Preparing the legal documents for your CBD shop

Your CBD shop will need a set of legal and contractual documents to operate on a daily basis. 

Your exact needs in this respect will depend on the country in which you are launching your CBD shop and the size and legal form envisaged for the company. Once again, we highly recommend having these documents prepared by your lawyer.

As a minimum, we recommend that you have the following documents prepared: 

• Employment contracts 
• General terms and conditions of sale
• General terms and conditions of use for your website
• Privacy Policy for your website
• Cookie Policy for your website

Applying for licences and permits and registering for various taxes

Here too, the list of licences and business permits required for your business to operate legally will depend on the country in which you have decided to start your CBD shop.

Your law firm will be able to advise you on all the regulations applicable to your business.

Likewise, your accountant will be able to assist you and take care of the formalities involved in complying with the tax authorities.

The next step in opening a CBD shop is to draw up your business plan.

What is a CBD shop's business plan?

A business plan serves as a comprehensive roadmap outlining the objectives, strategies, and key components of your venture. 

There are two essential parts to a business plan:

• A numerical part, the financial forecast we mentioned earlier in this guide, which highlights the amount of initial financing needed to launch the business and its potential profitability over the next 3 to 5 years,
• A written part, which presents in detail the project of creating a CBD shop and provides the necessary context to enable the reader of the business plan to judge the relevance and coherence of the figures included in the forecast.

Your business plan helps guide decision-making by showcasing your vision and financial potential in a coherent manner.

Your business plan will also be essential when you're looking for financing, as your financial partners will ask you for it when deciding whether or not to finance your project to open a CBD shop. So it's best to produce a professional, reliable, and error-free business plan.

In essence, your business plan is the blueprint to turn your idea into a successful reality. 

What tool should you use to create your CBD shop business plan?

If you want to write a convincing business plan quickly and efficiently, a good solution is to use an online business plan software for business start-ups like the one we offer at The Business Plan Shop.

Using The Business Plan Shop to create a business plan for a CBD shop has several advantages :

• You are guided through the writing process by detailed instructions and examples for each part of the plan
• You can access a library of dozens of complete startup business plan samples and templates for inspiration
• You get a professional business plan, formatted and ready to be sent to your bank or investors
• You can create scenarios to stress test your forecast's main assumptions
• You can easily track your actual financial performance against your financial forecast by importing accounting data
• You can easily update your forecast as time goes by to maintain visibility on future cash flows

If you're interested in using our solution, you can try The Business Plan Shop for free by signing up here .

Once your business plan has been written, you’ll need to think about how you might secure the funding required to open your CBD shop.

The amount of initial financing required will of course depend on the size of your CBD shop and the country in which you wish to set up.

Financing your startup will probably require you to obtain a combination of equity and debt, which are the primary financial resources available to businesses.

Equity funding

Equity refers to the amount of money invested in your CBD shop by founders and investors and is key to starting a business.

Equity provides your company with stable, long-term (often permanent) capital. It also demonstrates the commitment of the company's owners to the project, since these sums can be lost in the event of bankruptcy.

Because the equity invested by the founders may be lost if the project doesn't succeed, it signals to investors and other financial institutions the founders' strong belief in the business's chances of success and might improve the likelihood of obtaining further funding as a result.

In terms of return on investment, equity investors receive dividends paid by the company (provided it is profitable) or realise capital gains by reselling their shares (provided they find a buyer interested in the company).

Equity investors are, therefore, in a very risky position. They stand to lose their initial investment in the case of bankruptcy and will only obtain a return on investment if the business manages to be profitable or sold. On the other hand, they could generate a very high return if the venture is a financial success.

Given their position, equity investors are usually looking to invest in business ventures with sufficient growth and profitability potential to offset their risk.

From the point of view of the company and its creditors, equity reduces risk, since equity providers finance the company and are only remunerated in the event of success.

From a technical standpoint, equity consists of:

• Share capital and premiums: which represent the amount invested by the shareholders. This capital is considered permanent as it is non-refundable. In return for their investment, shareholders receive shares that entitle them to information, decision-making power (voting in general assembly), and the potential to receive a portion of any dividends distributed by the company.
• Director loans: these are examples of non-permanent capital advanced to the company by the shareholders. This is a more flexible way of injecting some liquidity into your company than doing so as you can repay director loans at any time.
• Reserves: these represent the share of profits set aside to strengthen the company's equity. Allocating a percentage of your profits to the reserves can be mandatory in certain cases (legal or statutory requirement depending on the legal form of your company). Once allocated in reserves, these profits can no longer be distributed as dividends.
• Investment grants: these represent any non-refundable amounts received by the company to help it invest in long-term assets.
• Other equity: which includes the equity items which don't fit in the other categories. Mostly convertible or derivative instruments. For a small business, it is likely that you won't have any other equity items.

The main sources of equity are as follows:

• Personal contribution from the founders' savings.
• Private investors: business angels, friends and family.
• Crowdfunding campaigns to find investors or collect donations (usually in exchange for a gift).
• Government initiatives such as loans on favourable terms to help partners build up their start-up capital.

Debt funding

Another option for partially funding your CBD shop is to borrow.

By definition, debt works in the opposite way to equity:

• Debt needs to be repaid, whereas equity is permanent.
• Lenders get a contractually guaranteed return, whereas equity investors only generate a return if the company is a success.

When a company borrows money, it agrees to pay interest and repay the borrowed principal according to a pre-established schedule. Therefore, lenders make money regardless of whether the company is profitable and their main risk is if the company goes bankrupt.

To limit their risk, lenders are usually conservative and cautious in their approach. They only finance projects where they are confident that they will be repaid in full.

Companies borrow in two ways:

• Against their assets: this is the most common way of borrowing. The bank finances a percentage of the price of an asset (a vehicle or a building, for example) and takes the asset as collateral. If the company cannot repay, the bank seizes the asset and sells it to limit its losses.
• Against their future cash flows: the bank evaluates the company's financial forecast to estimate its borrowing capacity and assesses the conditions (amount, interest rate, term, etc.) on which it is prepared to lend, taking into account the credit risk posed by the company.

It's difficult to borrow against future cash flow when setting up a CBD shop, because the business doesn't yet have historical data to reassure lenders about the credibility of the forecasted cash flows.

Borrowing against assets is, therefore, often the only option available to entrepreneurs. What's more, the assets that can be financed with this option must be easy to resell, in the unfortunate event that the bank is forced to seize them, which may limit your options even further.

In terms of possible sources of borrowing, the main sources here are banks and credit institutions. Bear in mind, however, that each institution is different, both in terms of the risk it is prepared to accept and in terms of how the risk of your project will be perceived and what items it will agree to finance.

In some countries, it is also possible to borrow from private investors (directly or via crowdlending platforms) or other companies, but not everywhere.

Things to remember about financing a CBD shop

There are various ways you can raise the initial financing you need to open your CBD shop. A minimum amount of equity will be needed to give the project credibility, and bank financing can be sought to complete the package.

What to do after launching my CBD shop?

Launching your CBD shop is the beginning of an exciting entrepreneurial adventure, and the culmination of your efforts to turn your idea into a reality. But this is also when the real work begins.

As you know, nearly half of all new businesses fail, so you'll need to do everything you can to make your business sustainable right from the start.

Estimating the future financial performance of a CBD shop inevitably involves a degree of uncertainty. That's why we recommend simulating several scenarios: a central case with the most likely scenario, an optimistic case, and a pessimistic case designed to test the limits of your business model.

Normally, your company's actual financial performance, observed after you start trading, should fall somewhere between your pessimistic and optimistic cases.

The important thing will be to quickly measure and compare this actual performance with the figures in your forecast to see where you stand, then update the forecast to re-estimate the future cash flows and cash position of your CBD shop.

This forward-looking financial management exercise is the only way to know where you stand and where you're going. And, when your figures fall short of expectations, to quickly implement actions to turn things around before the company runs out of cash.

There's nothing more dangerous than waiting until you have your accounts, which takes up to nine months after the end of your financial year (if you are in the UK, abroad your mileage will vary), to then realize that you're not on the right track and that your CBD shop won't have enough cash to operate over the next twelve months.

This is where using a forecasting solution that integrates actuals vs. forecast tracking, like The Business Plan Shop's financial dashboards do, can simplify the financial management of your business and help reduce the risk associated with your start-up project.

• There are 15 key steps to opening a CBD shop.
• Your financial forecast will enable you to accurately assess your initial financing requirements and the potential profitability of your project.
• Your business plan will give your financial partners the context they need to be able to judge the consistency and relevance of your forecast before deciding whether or not to finance the creation of your CBD shop.
• Post-launch, it's essential to have an up-to-date forecast to maintain visibility of your business's future cash flows.
• Using a financial planning and analysis platform that integrates forecasts, business plans and actual performance monitoring, such as The Business Plan Shop, makes the process easier and reduces the risks involved in starting a business.

We hope this guide has helped you understand how to open a CBD shop. Please don't hesitate to contact us if you have any questions or want to share your experience as an entrepreneur.

Also on The Business Plan Shop

• Start-up business plan examples

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Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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Starting a CBD Business 2024: Understanding the Costs and Necessity of CBD Insurance

Launching a CBD business is exciting and nerve wracking — but we have insider information to help you get started and keep you on the path to profitability.

CBD is a flourishing industry. The only cannabinoid to enjoy federally legal status has become increasingly popular with consumers over the past few years, leading to a surge in CBD brands and products. Some are questionable (like infused pillowcases) but most products fill a gap in consumer lives and health and wellness goals.

This sector of the cannabis industry is also drawing in large numbers of inspired entrepreneurs who want to capitalize on the plant’s possibility and profitability. But the road to CBD profitability is not a straight line. It takes planning, budgeting, and a firm understanding of the pitfalls of start-up businesses.

And indeed, there are many costs associated with a CBD startup. There are typical startup costs and there are additional costs that come with being in the cannabis industry. With proper research, planning, and budgeting, however, dealing with the startup costs of a CBD business is no barrier to success. Let’s explore these costs.

Navigating the Costs of a CBD Business

Legal and compliance costs.

While CBD is a federally legal compound, there are still many rules and regulations around it. Depending on which side of the industry you’re looking to enter, there could be licensing fees to pay.

Whether or not you need a license for your CBD business is dependent on two factors: what state you’re located in, and whether you’ll be growing or processing hemp. Requirements for selling CBD products vary by state; some states have strict regulations and high license fees to sell any form of CBD, while others are more relaxed about the processed compound. However, most states require licenses for businesses that are growing hemp plants, or processing the plant matter itself.

To get a license, you’ll have to apply with the state department that governs CBD in your state, which usually has a fee. Some states only require you to pay the fee once, while others require an annual payment to maintain your license. You’ll need to research the exact requirements of CBD licenses in your state to make sure you’re in compliance.

Licensing Fees and Compliance

If the idea of doing that much research is overwhelming to you, you can also skip the DIY Googling and pay for a consultation with a regulatory expert in your state. These consultations can help you become acquainted with your state regulations and understand exactly what is required of you to remain compliant. You may want to consult with a lawyer who is versed in the CBD space as well while creating your business plan to ensure compliance from the state.

Annual Compliance and Legal Structure Costs

As mentioned above, many states require an annual payment to maintain your hemp license. Factor this into the budget section of your business plan. You may also want to plan for annual compliance monitoring to ensure your business falls in line. This is an additional expense, but the cost of an audit from a private business is far cheaper than the cost of the state regulatory department issuing a non-compliance ticket.

Legal fees also include any expenses involved in setting up your business structure. Creating a sole proprietorship usually involves a DBA form, but creating an LLC is more involved and expensive.

Product Development or Manufacturing

If you’re not growing or processing hemp, the first section may or may not apply to you. But if you’re selling CBD products, then you’ll need to spend some money on research and development.

If you want to bring a CBD product to market, it needs to be made in a cost-effective and sustainable way. Additionally, there are a lot of factors that go into creating a manufacturing process from the ground up.

“R&D?” You may wonder. “I don’t need that! I make my own topical balm/ tincture/ bath bombs/ edibles and all of my friends love it — who needs market research!” If that’s the case, congratulations on finding a great formula! But that’s still only part of the equation.

Consider the following questions:

• Have you secured a supplier of CBD?
• Are you getting it straight from the farm, or are you sending it off to be extracted and processed first? Do you know how the CBD is being extracted?
• Are you comfortable with the extraction method?
• How much will it cost to scale the production of your CBD product?
• If you’re making it by hand, you can’t do that forever.
• What kind of equipment do you need to invest in?
• Can you afford to buy this equipment or lease it?

Furthermore, think about these inquiries:

• Do you have space for it at your house, or will you need to invest in a dedicated manufacturing space?
• Will you lease this space or purchase it outright?
• Will you be able to run the manufacturing space yourself, or will you need help?
• Can you scale your product production by yourself with equipment, or will you need employees? What kind of product safety certifications do you need to produce your CBD product?
• Will you test the product yourself or send it to a lab to ensure product safety?
• What is the cost of the rough materials?
• What are you selling your product for, and what will your profit margins be?
• Can you afford these costs out of pocket, or will you need a loan or financing?

If you’re feeling overwhelmed by all of that — take a deep breath. It’s a lot to consider and you don’t need to tackle it all at once. But you do need to tackle it at some point before launching your product, and these are the types of questions that should be answered in your business plan, especially if you’re seeking outside funding. These considerations play a significant role in the financial planning of your CBD business.

Branding and Marketing Expenses

Once you’ve tackled the beast of manufacturing and established your backend processes, you have to turn outwards. Branding and marketing are two large pieces of the puzzle for any brand, but especially for a B2C brand. You need a brand that speaks to the soul of your business and catches a customer’s eye. You want it to be enticing and representative of your business, without being overwhelming, but also memorable. It needs to stand out on a crowded shelf full of CBD products — but in a good way.

Unless you’re a part-time designer and packaging engineer, you’ll likely want outside help for this part. Engaging a designer to help create your logo, brand color, and packaging design is the easiest way to move this piece of the puzzle forward, but it can come at a cost. You can work with the designer to choose how in-depth you get, but a logo, brand color scheme, and basic product packaging is an important place to start.

This is also the stage where you need to enter the digital world with a website and make important choices. Will your customers be able to shop online for your products? Will you host your own ecommerce site, or engage a third party to do the heavy lifting for you?

If you don’t want to host your own shop, you can build out a basic website with a home page, about page, FAQs, and contact page, and use the shop button to link to your ecommerce platform. This option is typically cheaper but comes with limited functionality since you don’t own the ecommerce platform. Conversely, hosting your own shop gives you greater control over all aspects, but it can also be more expensive and time-consuming, and you may need to hire a web developer to help you manage it.

You’ll also want to consider your marketing and advertising budget here. Will you try to gain a following organically through social media, or run ads to jump-start your business? How will you build an online presence, and which social media platforms will you try to manage? (Pro tip: don’t say “all of them.” Pick and choose where to spend your energy.) How will you grow your email list? What kind of promotions and discounts are you comfortable offering? Will you use print advertising, or stick with digital?

If you don’t have a marketing background, it may be helpful to engage with a marketing consultant to build out this part of your business plan. A one-time cost to get a comprehensive marketing plan is worth it for many business owners, but it is (again) an additional cost.

Distribution and Sales Channels

We’re still not done! Once you have answered the questions above, you must consider how your products will get to your customers. Do you want to get into retail stores, or offer your products exclusively online? Are you willing to pay shelving fees and offer freebies to store owners to entice them? How will you handle the restock process for retail locations?

Will you make each order as they come in or can you create batches of products to have on hand and ship out? Making the products for each order keeps you from holding onto inventory but it increases your daily production workload, and it could be unsustainable if you start to get too many orders each day (a good problem to have!)

Conversely, you can make products in batches to ship out as needed, but then you have to manage your inventory. If you’re going with this route, consider the storage needs of your product. Where will it live? Does it need to be kept within a specific temperature range? Can you invest in shelves for your spare bedroom, or does it need a dedicated fridge and freezer to keep? Can you stand your house being overrun by your products, or are you comfortable investing in a warehouse storage solution?

Consider too the cost of establishing your distribution network. Which shipping provider will you use? Do you need a dedicated agreement with them, or will you shop around for the cheapest option? You’ll also need to monitor your shipping costs and conduct regular audits to ensure you know where your money is going.

Insurance and Risk Management

Now we come to the question of insurance — what policies does a fledgling CBD business need? Every business is unique, but there are a few policies that we recommend every CBD business have under their cannabis insurance umbrella.

Cannabis insurance recommendations for nearly every new CBD business

General liability insurance.

General liability insurance , or “all-risk” coverage, protects your business from primary risks. This includes any claim arising from a harmful incident that took place within your CBD business premises. General liability safeguards your business from third-party claims, protects your customers from any personal (property or bodily) damages, and secures your assets against legal obligations.

Property Insurance

Property insurance reimburses for direct personal losses, covers renovation and repairs, and offers compensation for the losses business faced because of the incident (similar to Rented Premises insurance).

Product Liability Insurance

Cannabis dispensaries sell tangible products that can constantly be subjected to product liability claims. This puts dispensaries in a constant risky state, making CBD product liability insurance a must-have for every CBD business owner. Product liability insurance covers all settlement costs and defense fees even when the claims are ungrounded. It enhances your credibility and shows that you care about your customers.

Cyber Liability Insurance

Cyber insurance offers forensic investigations, helps with data recovery, covers financial losses, and helps with legal settlements.

Crime Insurance

Crime insurance protects your CBD business against all financial losses in cases of theft, employee dishonesty, forgery, and other fraudulent activities. It provides coverage for stolen cash, inventory, and damages resulting from criminal acts while ensuring your business can recover from financial setbacks.

Engaging a cannabis insurance broker is a good time to evaluate your risk management plan. You have policies in place, but is that enough to cover any exposures in your business? A new business owner can be overwhelmed by the number of details to manage, so working with a risk management professional can bring a fresh set of eyes to your business, and help you identify any potential risks or exposures, as well as come up with a plan to deal with them.

Operational Expenses

All of the aforementioned costs are startup costs — the cost of setting up a business. But once that’s dealt with, there’s still the operational expenses to continue business. You’ll need to budget for these in advance, so they don’t catch you off guard.

Operational expenses are the day-to-day operating costs of running your business. These can vary based on how big your business is and can include office supplies, building utilities, and employee costs, such as salaries, training, and benefits. Operational costs also include the cost of professionals like accountants, financial services, and legal fees. Expenses for technology and software subscriptions, like your point of sale system, also fall under this category.

Operational expenses also involve planning for the future. Contingency funds, cash flow management, and savings all need to be accounted for. It can also include capital raising expenses like investor relations.

There are numerous factors that a CBD startup needs to manage. It can feel overwhelming at first, but an important thing to remember is that you’re not building your business alone. The startup phase is the best time to create a supportive ecosystem of businesses around you that help you run and manage your business effectively.

Protecting your cannabis company can seem confusing; however, we’re a full-service insurance brokerage working with carriers worldwide to offer you the best coverage possible. We’re here to help! Please reach out to us today by emailing [email protected] or calling 646-854-1093 for a customized letter of commitment or learning more about your cannabis insurance options.

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Cbd Business Plan Template & Guidebook

Starting and growing a successful CBD business requires the right resources, such as a comprehensive plan and guidebook. The #1 CBD Business Plan Template & Guidebook is the ideal resource to help entrepreneurs define their objectives and develop a sound strategy to ensure success. Whether you're just starting your business or looking to expand, this template and guidebook provides the most comprehensive blueprint for success in the competitive CBD market.

Get worry-free services and support to launch your business starting at $0 plus state fees.

• How to Start a Profitable Cbd Business [11 Steps]
• 10+ Best & Profitable Cbd Business Ideas [2023]

How to Write a Cbd Business Plan in 7 Steps:

1. describe the purpose of your cbd business..

The first step to writing your business plan is to describe the purpose of your cbd business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a cbd business:

The mission of our CBD business is to provide high-quality, accessible products to our customers that promote health and well-being. We strive to create innovative products that are crafted with natural and organic ingredients, ensuring safety and efficacy for our customers. We also prioritize educating our customers on the benefits of CBD, so they can make informed decisions about their health care.

2. Products & Services Offered by Your Cbd Business.

The next step is to outline your products and services for your cbd business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your cbd business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your cbd business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your cbd business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

Form an LLC in your state!

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a cbd business?

• Certificate of Recognition (COR) from Health Canada
• Approvals from the provincial and local governments
• Business license
• Labelling requirements as stated by the Canadian Food Inspection Agency (CFIA)
• Equipment for processing and storing CBD products
• Transportation permits
• Raw materials, packaging, etc.

5. Management & Organization of Your Cbd Business.

The second part of your cbd business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your cbd business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Cbd Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a cbd business varies based on many different variables, but below are a few different types of startup costs for a cbd business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your cbd business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your cbd business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your cbd business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Cbd Business Plans:

Why do you need a business plan for a cbd business.

A business plan is an important tool for successful business operations, as it helps define strategies and objectives, consider risks, and allocate resources. For a cannabis or CBD business, it helps outline how the company plans to turn a profit by developing cannabis products for the legal market. It also serves as a roadmap for the business, helping create milestones and goals to help track progress. Additionally, it allows investors to evaluate the potential of the business and serves as a legal document if needed in court proceedings.

Who should you ask for help with your cbd business plan?

It is best to consult an experienced business consultant or accountant who has experience in the cannabis industry to create your cbd business plan. Working with someone who has experience in the industry will help you create a comprehensive, detailed business plan that will provide you with the necessary details to get your business off the ground. Additionally, many local government resources are available to support small businesses in their cannabis venture.

Can you write a cbd business plan yourself?

Writing a CBD business plan can be a daunting task for those who are unfamiliar with the process. However, there are plenty of resources available to help guide aspiring entrepreneurs through the process. From working with a strategic consultant to utilizing one of the many available templates, there are several resources available to help you create a comprehensive and customized business plan. Additionally, there are many online courses and tutorials that can provide guidance on putting together a successful business plan.

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I'm Nick, co-founder of newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.

Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.

From assessing market viability and formulating business plans to selecting the right technology and navigating the financial landscape, I am dedicated to helping fellow entrepreneurs overcome challenges and unlock their full potential. As a steadfast advocate for small business success, my mission is to pave the way for a new generation of innovative and driven entrepreneurs who are ready to make their mark on the world.

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Executive Summary of a CBD Dispensary: Template & Example

• March 5, 2024
• Business Plan , Executive Summary

A CBD dispensary business plan needs a straightforward executive summary . This part of your plan is the first thing investors and partners see, and it should clearly outline what your CBD dispensary is all about. It’s where you explain what makes your CBD dispensary different and worth investing in.

We recommend using a two-slide PowerPoint format for this summary. The first slide should cover the basics of your business and the market you’re entering. Here, you detail your CBD dispensary’s products, location, and what sets you apart from others. The second slide focuses on your management team and your financial plans, highlighting the people behind the business and how you expect the CBD dispensary to grow financially.

This simple, two-slide approach ensures that your executive summary is easy to follow and covers all the essential points about your CBD dispensary business.

CBD Dispensary Business Plan

Download an expert-built 30+ slides Powerpoint business plan template

CBD Dispensary Executive Summary: Page 1

Business Overview

In this section, provide a brief overview of your CBD dispensary, including its name, strategic location, the concept behind your product selections, and your operational approach.

Emphasize what makes your dispensary stand out, such as your focus on high-quality, organic CBD products, a commitment to customer education, or a unique store design that enhances the shopping experience. Your unique value proposition (UVP) should be clear and compelling, illustrating the distinct benefits your dispensary offers to customers.

Example: “Green Relief CBD Dispensary,” located in the heart of Downtown Wellness District at [Address], offers an extensive range of premium, organic CBD products, from therapeutic oils to gourmet edibles. Our dispensary is designed with customer education and convenience in mind, featuring a welcoming atmosphere, knowledgeable staff, and an intuitive store layout, setting us apart in a burgeoning market.

Market Overview

Outline the CBD industry’s market size , growth trends, and local market dynamics. Discuss the increasing consumer demand for natural wellness products, the importance of quality and transparency in CBD products, and the competitive landscape in your area.

Example: The US CBD market, valued at $7.7 billion, is witnessing rapid growth, driven by a shift towards natural health products. “Green Relief CBD Dispensary” is strategically positioned in a thriving urban center, an area known for its health-conscious community and high foot traffic. Despite the presence of five local competitors, our focus on high-quality, lab-tested CBD products and a customer-centric approach positions us for success in a market primed for expansion.

CBD Dispensary Executive Summary: Page 2

Management Team

Highlight the qualifications and roles of your key management team members, showcasing the expertise and leadership driving your CBD dispensary.

Example: “Green Relief CBD Dispensary” is led by founders Jane Doe and John Smith. Jane, with her extensive experience in retail management and passion for wellness, oversees daily operations and product curation. John, with a background in business development and compliance, focuses on strategic growth and marketing initiatives . Together, they bring a balanced mix of industry knowledge and entrepreneurial spirit to the dispensary, guiding it towards its ambitious goals.

Financial Plan

Summarize your financial objectives and projections, including revenue targets and profit margins, to present a clear financial outlook for your CBD dispensary.

Example: “Green Relief CBD Dispensary” aims to achieve $5.1 million in annual revenue by 2027, with a 35% profit margin, across three stores. Our financial strategy includes expanding our product range, enhancing our marketing efforts, and exploring opportunities for new store locations, ensuring sustainable growth and a strong market presence in the evolving CBD industry.

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How To Create a Business Plan for Artisanal CBD Shop: Checklist

By henry sheykin, resources on artisanal cbd products shop.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Business Model
• Marketing Plan

Welcome to our blog post on how to write a business plan for an artisanal CBD products shop! The CBD industry is experiencing rapid growth, with the global market expected to reach $13.4 billion by 2028 . With such a lucrative opportunity, it's crucial to have a well-defined plan in place to ensure your shop's success.

The first step in creating your business plan is to conduct thorough market research. This will help you understand the demand for CBD products in your area, identify consumer preferences, and uncover potential opportunities for growth. By gathering data and insights, you can make informed decisions about your product offerings and marketing strategies.

Once you have a clear understanding of the market, it's important to identify your target market and customers. Determine who your ideal customers are and what they are looking for in CBD products. This will help you tailor your offerings and marketing efforts to meet their needs and preferences.

Next, analyze your competition to understand what sets your shop apart. Consider factors such as price, quality, branding, and customer service. This analysis will help you determine your unique selling proposition and differentiate your shop from others in the market.

With a clear understanding of your market, target customers, and competition, it's time to define your business objectives and goals. Consider what you want to achieve with your CBD products shop and set specific, measurable, attainable, relevant, and time-bound (SMART) goals to guide your efforts.

Developing a pricing strategy is also essential. Consider factors such as product costs, target market affordability, and perceived value. Pricing your CBD products competitively and profitably is crucial for the success of your shop.

Outline your product and service offerings in detail, considering factors such as product variety, sourcing, quality, and uniqueness. Offering a diverse range of organic, locally-sourced CBD-infused goods, including bath and body products, edibles, and wellness items, your shop can cater to a wide range of customer needs.

Create a comprehensive marketing and sales plan to promote your shop and drive customer traffic. Consider tactics such as social media marketing, influencer collaborations, online advertising, and partnerships with local businesses. Don't forget to leverage the expertise of your staff members to educate and guide customers, ensuring they feel confident and informed about the products they purchase.

Lastly, estimate your financial projections to determine the feasibility and profitability of your CBD products shop. Consider factors such as startup costs, operating expenses, anticipated sales, and profit margins. This will help you make informed decisions about pricing, inventory management, and growth strategies.

• Step 1: Conduct market research
• Step 2: Identify target market and customers
• Step 3: Analyze competition
• Step 4: Determine unique selling proposition
• Step 5: Define business objectives and goals
• Step 6: Develop a pricing strategy
• Step 7: Outline product and service offerings
• Step 8: Create a marketing and sales plan
• Step 9: Estimate financial projections

Conduct Market Research

When starting a business, it's crucial to conduct thorough market research to gain a comprehensive understanding of the industry landscape and potential opportunities. By conducting market research for your artisanal CBD products shop, you can gather valuable insights that will inform your business strategy and help you make informed decisions.

Here are some important steps to follow when conducting market research:

• Identify the overall market size and growth potential for CBD products. This will help you gauge the demand and future prospects for your shop.
• Study the target market demographics to understand who your potential customers are. This includes factors such as age, gender, income level, and interests.
• Analyze the current trends and preferences within the CBD industry. Stay updated on new products, consumer preferences, and emerging markets to stay ahead of the curve.
• Explore the regulatory environment and stay informed about any legal restrictions or requirements related to the sale and distribution of CBD products in your region.
• Identify potential distribution channels and determine the most effective ways to reach your target audience. This could include online platforms, retail partnerships, or direct sales.

Tips for conducting market research:

• Utilize online surveys, focus groups, and interviews to gather qualitative data directly from potential customers.
• Research and analyze competitors to identify gaps in the market and differentiate your products and services.
• Stay connected with industry associations, trade shows, and online communities to stay updated on industry news and trends.
• Consider partnering with local businesses or organizations that align with your target market to expand your reach and build brand awareness.

By conducting comprehensive market research, you lay the foundation for a successful business plan and increase your chances of creating a unique and profitable artisanal CBD products shop. Understanding your target market and competition will enable you to develop strategies that resonate with customers and create a strong presence in the industry.

Identify Target Market and Customers

Identifying your target market and customers is a crucial step in creating a successful business plan for your artisanal CBD products shop. By understanding who your customers are, you can tailor your products, marketing efforts, and overall business strategy to meet their specific needs and preferences. Here are some important steps to consider:

• 1. Conduct market research: Start by conducting thorough market research to gather important data about the CBD industry and your potential customer base. This research should include demographics, consumer preferences, market trends, and purchasing patterns. Utilize online surveys, interviews, and focus groups to gather valuable insights.
• 2. Define your target market: Based on your market research, define your target market. Consider factors such as age, gender, location, lifestyle, and interests. This will help you better understand who your potential customers are and how to effectively reach them.
• 3. Identify customer segments: Within your target market, identify specific customer segments that may have varying needs and preferences. This could include different age groups, health-conscious individuals, fitness enthusiasts, or those seeking natural remedies. Each customer segment may require unique product offerings or marketing approaches.
• 4. Analyze customer buying behavior: Gain insights into customer buying behavior by analyzing their purchasing habits, motivations, and decision-making processes. Identify factors that influence their buying decisions, such as quality, price, convenience, or brand reputation. This information will help you align your products and marketing efforts accordingly.
• Consider creating buyer personas to visualize and better understand your target customers. This will help you tailor your products and messaging to specific customer profiles.
• Stay up-to-date with industry trends and emerging CBD markets to identify potential opportunities and target new customer segments.
• Regularly assess and reassess your target market as consumer preferences and market dynamics may change over time.

By clearly identifying your target market and customers, you can develop a business strategy that effectively caters to their needs, establishes strong brand loyalty, and drives sales growth for your artisanal CBD products shop.

Analyze Competition

When starting an artisanal CBD products shop, it's crucial to conduct a thorough analysis of your competition. This will not only help you understand the market landscape but also allow you to identify opportunities and gaps in the industry that you can capitalize on. Here are a few key steps to analyze your competition:

• Identify direct and indirect competitors: Begin by identifying both direct competitors who offer similar artisanal CBD products and indirect competitors such as health and wellness stores or online CBD retailers.
• Research their products and pricing: Take the time to study your competitors' product offerings, including the variety, quality, and packaging of their CBD-infused goods. Additionally, analyze their pricing strategy to determine how they position themselves in the market.
• Assess their marketing and branding: Look closely at your competitors' marketing efforts, including their online presence, social media engagement, and overall branding. Pay attention to how they communicate their unique selling proposition and connect with their target audience.
• Understand their customer experience: Visit your competitors' physical stores or explore their online platforms to experience their customer journey firsthand. Pay attention to factors such as store layout, product presentation, customer service, and overall ambiance.
• Analyze customer reviews and feedback: Dig deeper into customer reviews and feedback about your competitors' products and services. Take note of any recurring positive or negative comments to understand what customers appreciate or dislike.
• Identify gaps and opportunities: Based on your analysis, identify gaps or areas where your competitors may be lacking. This could be in product variety, customer service, educational resources, or any other aspect that you can improve upon to offer a unique value proposition to your customers.

Tips for Analyzing Competition:

• Use online tools or directories to identify potential competitors in your target area.
• Create a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis to compare your business against competitors.
• Visit trade shows or industry events to observe competitors and gain insights into emerging trends.
• Consider conducting surveys or interviews with potential customers to understand their perception of your competitors.

Analyzing your competition is a crucial step in developing a successful business plan for your artisanal CBD products shop. By gaining a deep understanding of your competitors' strategies, strengths, and weaknesses, you can position your business uniquely and offer a superior experience to your target market.

Determine Unique Selling Proposition

When starting an artisanal CBD products shop, it is vital to determine your unique selling proposition (USP). Your USP sets your business apart from the competition and showcases what makes your shop special. To determine your USP, consider the following:

• Identify your core strengths: Identify the key strengths and qualities that set your CBD products shop apart. This could include factors such as using only organic and locally-sourced ingredients, offering a wide range of CBD-infused products, or providing personalized blending options for customers.
• Understand customer needs: Conduct market research and gather insights from potential customers to understand their needs and preferences. This will help you tailor your USP to meet their demands and stand out in the market.
• Highlight your expertise: Showcase the expertise of your staff members and the level of education and guidance they provide to customers. Emphasize their knowledge in CBD products and how they can help customers make informed decisions.
• Focus on a specific niche within the CBD market, such as cruelty-free or sustainably sourced products, to differentiate yourself even further.
• Align your USP with the values and preferences of your target market to attract and retain customers.
• Regularly reassess your USP to stay competitive and adapt to evolving customer trends and demands.

By determining your unique selling proposition, you can effectively communicate the value your artisanal CBD products shop offers to customers. Your USP becomes a powerful tool in attracting and retaining customers, distinguishing your shop from competitors, and driving business success.

Define Business Objectives and Goals

Defining clear objectives and goals for your artisanal CBD products shop is crucial to setting a direction and measuring success. These objectives and goals should align with your overall vision for the business and help guide your decision-making process.

When defining your business objectives and goals, consider the following:

• Specificity: Clearly articulate what you want to achieve with your CBD products shop. Think about the impact you want to make in the market and the community.
• Measurability: Set measurable goals that you can track and evaluate, such as revenue targets, customer satisfaction ratings, or social media engagement metrics.
• Achievability: Ensure that your objectives and goals are realistic and attainable given the resources and capabilities of your business. It's important to stretch yourself, but not to the point of setting unrealistic expectations.
• Relevance: Align your objectives and goals with your overall business strategy and the needs of your target market. They should contribute to the growth and sustainability of your CBD products shop.
• Timeframe: Establish a timeline for achieving your objectives and goals. This will help you stay focused and accountable throughout the process.

Tips for Defining Business Objectives and Goals:

• Consider SMART (Specific, Measurable, Achievable, Relevant, Time-bound) criteria when setting your objectives and goals.
• Involve key stakeholders, such as your team members or business partners, in the goal-setting process to gain diverse perspectives and buy-in.
• Regularly review and reassess your objectives and goals to ensure they remain relevant and aligned with the evolving needs of your CBD products shop.

By clearly defining and documenting your business objectives and goals, you provide a roadmap for success and give yourself and your team a clear focus to work towards. This clarity will enable you to make informed decisions, measure progress, and adapt your strategies as needed to achieve long-term success for your artisanal CBD products shop.

Develop A Pricing Strategy

Developing a pricing strategy is a crucial step in establishing a successful artisanal CBD products shop. It involves considering various factors, such as production costs, competitor pricing, and customer willingness to pay. Here are some essential steps to help you develop an effective pricing strategy for your business:

• Analyze your costs: Begin by calculating all the costs associated with producing and sourcing your CBD products. This includes raw materials, manufacturing, packaging, and any additional expenses.
• Evaluate competitor pricing: Research and analyze the pricing strategies employed by your competitors. This will help you understand the market dynamics and how customers perceive the value of CBD products.
• Determine your target profit margin: Set a target profit margin that aligns with your business objectives and financial goals. Consider the industry standards and ensure your pricing allows for sustainable growth.
• Consider perceived value: Take into account the perceived value of your artisanal CBD products. If your products are made from high-quality, locally-sourced ingredients or offer unique customizations, you can justify a higher price point.
• Implement a tiered pricing structure: Consider offering different pricing tiers for your CBD products based on factors like potency, size, or additional benefits. This can cater to a wider range of customers and their varying needs.
• Regularly review and adjust your pricing strategy to ensure competitiveness and profitability.
• Consider offering introductory promotions or discounts to attract new customers and create initial brand loyalty.
• Offer bundle deals or subscription options to encourage repeat purchases and increase customer lifetime value.
• Keep an eye on market trends and adjust your pricing accordingly to stay relevant and meet changing customer preferences.

Outline Product And Service Offerings

When it comes to running an artisanal CBD products shop, the success of your business relies heavily on the quality and variety of products and services you offer. To ensure you meet the diverse needs and preferences of your target market, it is crucial to have a clear outline of your offerings. Here are some key considerations to keep in mind:

• Diverse Range of Organic CBD-Infused Goods: Your shop should offer a wide selection of CBD-infused products, including bath and body products, edibles, and wellness items. Ensure that these goods are sourced from organic and local suppliers to guarantee the highest quality.
• Custom CBD Blending: One unique aspect of your shop is the ability for customers to create custom CBD blends. This personalized experience will allow them to tailor the benefits of CBD to their specific needs and preferences. Train your staff members to assist customers in selecting the right blend of CBD products for their desired outcomes.
• Expert Education and Guidance: To instill trust and confidence in your customers, it is essential to have knowledgeable staff members who can provide education and guidance on CBD products. Ensure that your team is well-versed in the benefits, dosages, and potential side effects of CBD, so they can address any customer queries effectively.
• Welcoming Atmosphere: Creating a welcoming and calming environment in your shop will help customers feel at ease while exploring your offerings. Consider factors such as lighting, layout, and soothing music to enhance the overall ambiance of your store.
• Community Workshops and Events: To foster a sense of community and wellness, organize educational workshops and events within your shop. These gatherings can serve as a platform for knowledgeable speakers to share insights about CBD, wellness practices, and related topics. This will not only attract customers but also position your shop as a hub for health-conscious individuals.
• Regularly update your product offerings to keep up with market trends and customer demands.
• Consider offering sample sizes or trial packs of your CBD products to allow customers to try before committing to larger purchases.
• Partner with local CBD producers and artisans to showcase unique and regionally inspired products.
• Highlight the sustainability and ethical sourcing practices behind your products to appeal to environmentally conscious consumers.

Create A Marketing And Sales Plan

Creating a comprehensive marketing and sales plan is crucial for the success of your artisanal CBD products shop. This plan will outline the strategies and tactics you will use to promote your products and attract customers. Below are some key steps to consider:

• Identify Your Target Audience: Determine the demographics, interests, and preferences of your target market. This will help you tailor your marketing messages and choose the most effective channels to reach them.
• Develop Your Brand Identity: Craft a unique and compelling brand identity that aligns with your target market and sets you apart from competitors. This includes creating a memorable logo, consistent visual elements, and a distinctive brand voice.
• Utilize Online Marketing: Take advantage of various online marketing strategies to reach a wider audience. This can include creating a professional website, optimizing it for search engines, and engaging with potential customers through social media platforms.
• Consider Content Marketing: Develop high-quality, informative content that educates and engages your target audience. This can include blog posts, how-to guides, videos, and customer testimonials. Share this content on your website and social media channels to showcase your expertise and build credibility.
• Explore Local Advertising: Depending on your target market and location, consider traditional advertising methods such as print media, radio, and local event sponsorships. This can help you reach potential customers who may not be active online.
• Build Relationships: Establish partnerships with local businesses and organizations that align with your brand values. This can include collaborations, joint events, or cross-promotions, allowing you to tap into existing customer networks and expand your reach.
• Stay updated with the latest industry trends and adjust your marketing strategies accordingly.
• Regularly track and analyze the performance of your marketing efforts to identify what works best for your business.
• Offer exclusive promotions or discounts to incentivize new customers to try your products.
• Don't underestimate the power of word-of-mouth marketing. Encourage satisfied customers to leave reviews and recommend your shop to others.
• Consider hosting launch events, workshops, or classes to attract customers and build a sense of community around your brand.

By creating a detailed marketing and sales plan, you can effectively promote your artisanal CBD products shop and attract your desired customer base. Remember to continuously evaluate and adjust your strategies based on customer feedback and market trends for the best results.

Estimate Financial Projections

Estimating your financial projections is a critical step in creating a business plan for your artisanal CBD products shop. These projections will help you understand the financial viability of your business and provide a roadmap for achieving your goals. Here are some important considerations to keep in mind when estimating your financial projections:

• Revenue: Start by estimating your expected revenue by analyzing your target market, competition, and pricing strategy. Consider factors such as the average purchase value, repeat customer rate, and sales growth over time.
• Expenses: Identify all the costs associated with running your CBD products shop, including rent, utilities, inventory, salaries, marketing, and any other operational expenses. Be sure to account for both fixed and variable costs.
• Gross Profit Margin: Calculate your gross profit margin by subtracting the cost of goods sold from your revenue. This will give you an idea of how much profit you are generating from each sale.
• Net Profit Margin: Once you have calculated your gross profit margin, deduct your operating expenses to determine your net profit margin. This will help you understand your overall profitability.
• Cash Flow: A cash flow projection is essential for understanding how money will move in and out of your business over time. This will help you identify any potential cash flow issues and plan accordingly.
• Break-even Analysis: Determine how much revenue you need to generate in order to cover your expenses and reach the break-even point. This analysis will provide insights into when your business will start making a profit.
• Be realistic: When estimating your financial projections, it's important to be realistic and conservative with your assumptions. Overestimating revenue or underestimating expenses can lead to inaccurate projections.
• Consider seasonal fluctuations: If your CBD products shop experiences seasonal variations in sales, account for this in your financial projections. Adjust your revenue and expense estimates accordingly to reflect these fluctuations.
• Seek professional advice: If you're unsure about estimating your financial projections, consider seeking help from a financial advisor or accountant. They can provide valuable insights and ensure that your projections are accurate and realistic.

By estimating your financial projections, you'll have a clear understanding of the financial implications of starting and running your artisanal CBD products shop. These projections will serve as a valuable tool for making informed decisions and securing financing if needed. Remember, thorough financial planning is crucial for the long-term success of your business.

Writing a business plan is crucial when starting an artisanal CBD products shop. By following these nine steps, you can ensure that your business has a solid foundation and is positioned for success. Conduct market research to understand the industry landscape, identify your target market and customers, and analyze your competition. Determine your unique selling proposition that sets your shop apart, define your business objectives and goals, and develop a pricing strategy that reflects the value of your products and services.

Outline your product and service offerings, ensuring they align with your target market's needs and demands. Create a comprehensive marketing and sales plan to effectively reach your target audience and attract customers to your shop. Lastly, estimate your financial projections to understand the financial viability and potential profitability of your business.

By following these steps, you can establish a successful artisanal CBD products shop that provides a personalized experience, education, and a sense of community to your customers. Remember to adapt your business plan as your shop evolves and the industry changes, ensuring continuous growth and success in the CBD market.

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Hemp CBD Business Plan Templates, Fin. Models, Pitch Decks

Hemp cbd market forecast.

These days, at least 70 countries cultivate hemp for commercial or research purposes. The largest producers of hemp are currently China, France, Canada, USA and Chile. In 2023, hemp acreage in North America and the European Union countries totaled about 75,000 acres and 85,000 acres respectively, China – the world’s largest hemp fiber and seed producer – planted more than 340,000 acres of hemp, which put global acreage at about 520,000 acres. According to marketing analysis reports by Technavio, the global industrial hemp market size is set to reach $6.87 billion by 2027 with a CAGR of 17.1%.

Cannabidiol (CBD) is one of the numerous compounds found in the cannabis plant. CBD oil can be obtained from two different species of cannabinoids: marijuana and hemp, which come from the same plant species called Cannabis sativa. Hemp-based CBD oil products have a lower delta-9 tetrahydrocannabinol (THC) concentration, while marijuana-derived CBD oil products have a relatively high concentration of THC.  Therefor, marijuana-based CBD products can be used only when they are prescribed by doctors while hemp-based CBD oils do not normally require a prescription. Grand View Research estimates that the global hemp-derived CBD market size has increased to $4.3 billion in 2023 from $2.7 billion in 2022, and it is expected to grow at a CAGR of 15.8% from 2024 to 2030.

What is a Hemp CBD Business Plan Template

We offer “70% ready to go” professional Hemp CBD business plan templates for Word with Excel financial models and PowerPoint pitch decks. Upon request, we can also provide versions compatible with Google Apps G Suite. A business plan delivers an overview of your Hemp CBD business from initiation and outlines your plan for the next seven years. It explains your business goals, strategies for achieving them, and market analyses to support your plans. Our templates are completely open, editable and flexible, they can be used for any forecast time period and any business size. We also have a range of cannabis business plan templates at cannabusinessplans.com .

Types of Hemp CBD Business We Offer Templates for

You can find templates for any type of hemp CBD business, including but not limited to growing, drying, curing, extraction, manufacturing, distribution, retail, testing, transportation and more in any combination for vertically integrated or monobusinesses. If you could not find a suitable template for your business, please contact us . All products (business plan template, financial model, pitch deck template) can also be purchased separately or in any combination, e.g. Word document + PowerPoint presentation and so on.

Best Selling Templates

CBD Products Retail/Online Store Business Plan Template

Hemp Cultivation Business Plan Template

Hemp Cultivation + CBD Oil Extraction and/or Fiber Products Business Plan Template

Hemp CBD Vertically Integrated Business Plan Template

Financial model for a hemp cultivation and fiber products manufacturing business, sample.

Hemp Business Plan Sample

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How Much Does it Cost to Open a CBD Store?

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Hemp CBD Business Plan FAQs

How profitable is a cbd business.

Average sales per square foot for a hemp/CBD products pharmacy is about $700-$1,000. Gross profit is a direct measure of a store’s profitability. A higher margin indicates that more of the revenue is retained as profit after covering the cost of acquiring products. For a typical retail independent CBD store, gross retail margins should be at least 40%, which could result in a net profit of approximately 12%.  How Much Does it Cost to Open a CBD Store?  

How do I start a hemp business?

To produce hemp, you must first obtain a license or permit through your local hemp program. In the US, if your state or tribe has an approved plan or is in the process of developing a plan, you must apply for and receive a license or permit under its hemp program, otherwise you can apply for a USDA hemp production license.  How much does it cost to grow hemp?

Dispensary Business Plan Template

Written by Dave Lavinsky

Over the past 20+ years, we have helped over 1,000 cannabis entrepreneurs and business owners create business plans to start and grow their cannabis and marijuana dispensaries. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a business plan template step-by-step so you can create your plan today.

Download our Dispensary Business Plan Template here

Why You Need a Dispensary Business Plan

If you’re looking to start a new dispensary business or grow your existing dispensary, you need a well-written business plan. The business plan will help you raise funding, if needed, and plan out the growth of your dispensary in order to improve your chances of success. It is a living document that should be updated annually as your company grows and changes.

Sources of Funding for the Cannabis Industry

With regards to funding, the main sources of funding for the cannabis industry are personal savings and angel investors. Unless and until the federal government makes new laws, many banks typically will not lend money to marijuana businesses.

Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding or, like a bank, they will give you a loan.

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How to write a business plan for a cannabis dispensary.

Below are the 10 sections of a sample dispensary business plan:

1. Executive Summary

Your executive summary provides an introduction to your cannabis business plan, but it is normally the last section you write because it provides a summary of each key section of your business plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of cannabis dispensary you are operating and the status. For example, are you a startup, do you have a business that you would like to grow, or are you operating a chain of dispensaries?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the cannabis industry. Discuss the type of cannabis retail business you are operating. Detail your direct competitors. Give an overview of your ideal customer base. Provide a snapshot of your marketing strategy. Identify the key members of your team. And offer an overview of your financial plan.

2. Company Analysis

In your company analysis, you will detail the type of cannabis dispensary you are operating.

For example, you might operate one of the following types:

• Recreational Cannabis Dispensary
• Medical Marijuana Dispensary
• Combination (Recreational & Medical Marijuana Dispensary)

In addition to explaining the type of business you operate, this section explains the background of the business. Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
• What is your business model?
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

3. Industry Analysis

In this section, you need to provide an overview of your marijuana retail business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the industry educates you. It helps you understand the ecosystem in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies cannabis market trends. For example, if there was a trend towards oils and tinctures, it would be helpful to ensure your plan calls for plenty of such options.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in this section:

• How big is the cannabis industry (in dollars)?
• What is the most profitable niche of the cannabis market?
• Is the target market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth potential over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your cannabis business. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

4. Customer Analysis

The customer analysis section must detail the potential customers in your target market.

The following are examples of customer segments: college students, sports enthusiasts, soccer moms, techies, teens, baby boomers, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of cannabis dispensary you operate. Clearly, baby boomers would want a different atmosphere, pricing, and product options, and would respond to different marketing promotions than recent college graduates.

Try to break out your target segments in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the target customers you seek to serve. Because most dispensaries primarily serve customers living in the same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target consumers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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5. Competitive Analysis

Your competitive analysis should identify the competitors your business faces. Such competitors are other dispensaries within proximity to your location.

For each such competitor, provide an overview of their cannabis business and document their strengths and weaknesses. Unless you once worked at a competitor’s business, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What cannabis products do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to stand outside your competitors’ locations and ask them as they leave what they like most and least about them. Likewise, online review sites can give you solid insight into your competition.

The final part of your competitive analysis section is to document your areas of competitive advantage. Some questions you might consider include:

• Will you provide a superior product line?
• Will you provide marijuana products that your competitors don’t offer?
• Will you make it easier or faster for customers to acquire your products?
• Will you provide better customer service?
• Will you offer better pricing?
• What security measures will you take to protect your employees?

Think about ways you will outperform your competition and document them in this section of your plan.

6. Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion.

In the product section, you should reiterate the type of business that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, which of the following cannabis products will you offer?

Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections, you are presenting the cannabis and marijuana items you offer and their prices.

Place refers to the location of your business. Document your location and mention how the location will impact your success. Is your dispensary located next to a heavily populated office building, or gym, etc.? Discuss how your location might provide a steady stream of customers.

The final part is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Making your dispensary’s storefront extra appealing to attract passing customers
• Advertising in local papers and magazines
• Reaching out to local bloggers and websites
• Local radio advertising
• Event advertising

7. Operations Plan

While the earlier sections explained your goals, this section describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday Short-Term Processes

Include all of the tasks involved in running your dispensary such as serving customers, procuring supplies, keeping the store clean, maintaining regulatory compliance, etc.

Long-Term Goals

These are the milestones you hope to achieve. These could include the dates when you expect to serve your 1,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.  

8. Management Team

To demonstrate your dispensary’s ability to succeed as a business, a strong organizational structure and personnel plan is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in the legal cannabis industry. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in dispensaries and/or successfully running retail and small cannabis businesses.  

9. Financial Analysis

Your financial analysis of your business plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your annual revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 50 customers per day or 200? And will sales grow by 2% or 10% per year? How much revenue do you expect during Year 1, Year 2, etc.? As you can imagine, your sales forecast assumptions will greatly impact the financial forecasts for your marijuana business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

While balance sheets include detailed information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $200,000 on building out your dispensary, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if you get a loan for $100,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business and make sure you never run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a dispensary:

• Start-up expenses
• Location build-out including design fees, construction, etc.
• Cost of fixtures and display cases
• Cost of initial inventory
• Payroll or salaries paid to staff
• Business insurance
• Cannabis business license
• Taxes and permits
• Legal expenses

10. Appendix

Cannabis dispensary business plan summary.

Putting together a cannabis dispensary business plan is a worthwhile endeavor. If you follow the business template above, by the time you are done, you will truly be an expert. You will really understand the legal cannabis business, your competition, your ideal customers, dispensary marketing, and you will have a plan to present to potential investors. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful cannabis business.

To further help you, we have other articles on key aspects of how to start your dispensary and running it effectively. Specifically, our dispensary marketing plan will help you develop the best promotions strategy. Our dispensary startup costs post will let you know what costs to expect.

Where Can I Get and Dispensary Business Plan Example PDF?

You can download our dispensary business plan example here. This is a sample dispensary business plan template you can use in PDF format.

Additional Resources

These resources will provide a solid foundation for understanding the cannabis industry and staying informed about the latest trends and legal requirements.

• NCSL State Cannabis Laws
• Cannabis Business Times
• MJBiz Daily

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