August 19th, 2020
CBD Business Owners Thoughts on the Hardest Part of Owning a CBD Business
What’s the hardest part of owning a CBD business?
In any business, there are highs and lows. You win some, and you most definitely lose some. It’s part of the process, the ever looming lure of the thrill. Most CBD Business Owners I’ve talked to love their role. They love their job. The satisfaction received from helping their customers reach their goals and gain so much from their products and services drives them.
I’ve been there.
As a former vape shop owner for five years, I sold CBD products for three of those years. Now, I sell CBD online through my website Infinite Hemp Co. One thing I can tell you about selling CBD is that watching people’s transformation from before and after using CBD is the greatest gift.
There are many challenges a CBD Business Owner faces. For me, it was customer acquisition. In the current environment, CBD is still frowned upon by the FDA. Therefore, big media companies and search engines, like Google, don’t allow advertising for CBD products.
This makes it difficult to acquire good customers. CBD is popular, yes. However, some people still aren’t educated about it. If there were more advertising allowed, we could educate potential customers who could actually benefit from CBD products.
Now, let’s take a look at what some of the leaders in the CBD industry have to say about what the hardest part about owning a CBD business is.
Jason says that “CBD is an ever-evolving market with little to no regulatory guidance and because of this the industry has struggled to have an established set of standards. From things as simple as labeling of a bottle to what can be said about the effects of a product, you never really know if you are doing the right thing or being overly cautious.
CBD is also not just CBD now. Customers are self-educated and are always asking for the newest product that they are reading about online. CBN, CBG, and Delta-8 have all entered or are entering the marketplace, and staying relevant, cutting edge, and providing quality products is a challenge.
Fortunately, we are always improving our products and preparing for the next wave of interest from the consumer. Purely CBD prides itself on quality and not just rushing products to market. We want the customer to know that we not only believe in the products, but we also have them thoroughly developed and tested for purity knowing that we are all users of our products first.”
Couldn’t have said it better myself. Good start to the conversation, I’d say. The majority of us would love set standards that the CBD community follows to a tee. Why? It establishes credibility.
There’s no better way for customers to trust a product than the comfort that it was manufactured with a strict set of standards. Customers want quality. This makes sure that they are getting the best quality possible. Of course, overregulation can destroy the industry, so careful attention to proposed regulations is necessary.
Who likes honey? I do. With this next one, it all starts with happy bees.
Nick and Ali are busy bees at Frangiosa Farms… “Whether it’s planting hemp or tending to the beehives, running a farm and a business is a lot of work. Luckily it’s easy when you love what you do and what you make. Being a full-spectrum hemp company comes with its own set of unique challenges and we always look to our mission statement to keep us on the right path: To create & share the most innovative natural products that support the health and wellness of individuals, communities and the eco-systems that help create them.”
Most CBD business owners in the industry aren’t only focused on one project. Colorado Hemp Honey is a great example.
Not only do they produce their own delicious honey, but they also grow their own hemp on their farm, Frangiosa Farms. The process of getting licensing, grow space, grow materials, and all other logistics involved with growing hemp is not an easy task.
However, the goal is to ease the customers’ minds knowing that the product is 100% grown and manufactured by a trusted source, right down to the last drop of carefully harvested honey.
Josh says that “as a national brand like CBeerD, there’s always a challenge knowing which route to follow that will make the brand successful. There are different laws and regulations on state and local levels, and as a business owner, it’s your responsibility to know the rules, and be able to relay those rules to your prospects and your clients. With CBD regulation being vague and every state different, it can lead to some challenges and constant research.
It’s hard to keep up with, but when you’ve done your homework, it’s obvious to your prospects and the relationship has a better chance to flourish.”
Every state that has a hemp law in place has different requirements. Sure, most might’ve aligned with the USDA’s Hemp Plan, but there are still certain cases where different types of CBD products are not allowed. For instance, Texas just made it illegal to sell smokeable hemp products. This places massive hurdles for many companies in every area of the sales cycle.
Chris from Healing Dragon CBD believes "the hardest part of running a CBD retail business has been regulations... regulations from FDA, Government, Banks, Merch. Processing companies and Legalities to trademarking. Corona virus has also put a hit on commercial retail sales and pushed everybody into CBD businesses to online retail equaling a flooded market. Hard to exactly say which way the market will go. It's going to take a lot of efforts and creative measurements to get the people CBD."
This virus has put a damper on all of our businesses. It has made us scramble to online stores, online chat, and newer ways to bring in customers and retain them. It's hard to say when it will pass, but at least the regulations on banking are better, am I right?
Kari from My Relief Health has a very appropriate response for our topic. She starts by saying that their "values at My Relief Health CBD center on a commitment to continuous learning and customer education. We’re proud to be a CBD company that’s in the business of helping people, and strive to do exactly that every single day. Each customer has a story, a reason why they’re seeking the help of CBD, and we value learning those stories in order to tailor our recommendations to each one’s specific needs and wants."
Ultimately, their "primary challenge [they] face on a daily basis is combating the lack of customer education around CBD products and their use. There’s a great deal of inconsistent articles, websites, and forums that only serve to confuse customers, often causing them to nearly give up on cannabis entirely. Adding fuel to the fire, manufacturers are throwing minimal amounts of CBD into products that seldom offer any real therapeutic benefit, making outlandish marketing claims, and charging a 50% premium!
Naturally, when the product doesn’t work as advertised, it turns customers off to the industry. It’s our job to re-educate those customers, and to help them vet the products while understanding what benefits they can honestly expect.”
Kari is spot on here in my opinion. When I owned my store, it was always a challenge negating false claims and bad recommendations received from other sources. I had to reeducate customers on CBD and properly explain the reasons why what they know might not be sound. This provides a tough challenge for owners because then the customer has to make a decision on who to trust, and what to trust. It can sometimes lead to a loss of a sale because of the customer becoming discouraged by the industry as a whole. Hopefully, things will change and regulations by States will help to combat improper/false testing and help provide more guidelines on advertising claims.
The good folks at Green Mountain Botanicals believe that “crossing your T's and Dotting your I's before you move on to your next task or ideas” is what they focus staying on top of. They go on to say that strive to “stay true to a healthy business model over trying to race to the excitement of the industry. Treating ALL parts of your business as if you are trying to net income from them, from marketing and how you interact with your staff, to the products you source and sell being high quality and accurate.”
They’re not wrong here. With an industry like CBD, everything is moving fast. If you don’t take the time to slow down and collect your thoughts, you might miss out on opportunities, or you could hinder your quality that makes you unique. It’s hard to remember sometimes to analyze from a customer’s perspective, to ensure every step you take is the right step for your business. Don’t get lost in it all where you can’t take the time to reflect.
Roberto says that “the most challenging part of running/owning our CBD business is not having enough time to educate as many people as we can about CBD. We spent a large portion of our day educating consumers and retailers about what CBD is and what it can do. There are so many people out there that have misconceptions about CBD, but what is worse, is that there are a lot of companies that are focused on just making a sale that we are having to help consumers re-learn what they should look for in CBD as it relates to quality and safety.”
This makes so much sense because it’s so true. When I sold CBD in my store, there were countless people who had misconceptions about CBD and also so many who had had a bad sales experience that it turned them off of it. The only thing you can do is do your best to have your educational material at the ready, and guide the customer back with a knowledgeable approach.
He goes on to say that “the second biggest challenge would have to be marketing. CBD companies, as ethical and as safe as ours, have a difficult time promoting our products on mainstream channels such as Facebook and Google due to restrictions. I understand the restrictions, but they should have a program in which companies can be vetted for compliance to be allowed to market.”
We all know the frustrations of trying to market our CBD brands through Google, Facebook, etc. It’s not a fun environment to be in. The sly tricks of using specific keywords that aren’t blacklisted, or creating a completely different landing page without using certain keywords like “CBD” are becoming all too popular. It also doesn’t help when policies are constantly changing, and sometimes not for the good of our industry.
Chris from CUR believes “the hardest part for [him] would be trying to get brand exposure compared to the industry giants.” He is “building a great customer base due to [their] customer service and quality products, but with a lower marketing budget compared to other companies, [they’ve had] to reach out and find customers at the beginning.”
He goes on to say that “a lot of people assume that if you create a brand, people will just find you, but that is not the case for most of us. You have to create a brand with a purpose and instill that into yourself and your team.”
He’s absolutely right. It’s almost like we’re trying to keep our head above water during a category 3 hurricane sometimes. The sea of CBD brands and companies is ever-growing, and fast. New products are on the rise. New giants are on the rise. Hope your brought your provisions.
“Country Roads Cannabis is a family owned, national firm devoted to providing the highest quality full spectrum CBD products. We have been in business for a couple years now and initially the hardest part was banking and simply conducting business. Now that banking regulations have opened up some, the hardest part about running a CBD business is competition for store space/inventory and educating your consumers as to the products that make sense to them and their goals.”
I can’t tell you how many processors I’ve filled out paperwork for trying to get CC purchasing available for CBD, whether that be for my B&M or online. At some point, we all go through this, but if you started 4 or 5 years ago… that’s a different story. High risk, off-shore solutions, reserve accounts, you name it, the hurdles were immense.
However, now that processing is much more relaxed finally, the gates have opened. If you’re a B&M and have your own brand, it’s difficult to find that perfect location that doesn’t force you to compete with the now national brands and stores that bring in multiple brands. And if you’re a store with multiple brands, it’s sometimes challenging deciding what to carry – what are the brands that will resonate with your demographic and culture?
Overall, there are hindrances, complications, and regulations which companies have to overcome to navigate this industry. Things are becoming easier, and a lot of that has to do with regulations going into effect. The lines are becoming less blurred by the day when it comes to CBD, in general. However, when it comes to newer product concepts that stem from the hemp plant, the zig-zags start creeping back in. Hopefully regulations keep companies at bay, so we can establish the industry as a trusted and reliable one.
Written by Jason Weir