Vince Magaline   |   October 15, 2019

How To Sell CBD Online: The Ultimate Guide To Get Your Hemp Business Running

The rush to sell CBD online is here, but it’s not as easy as you may think.
Vince Magaline is the Sr. Marketing Manager at LimeLight. As a multiple SaaS tech startup founder and recognized growth marketing expert, Vince has helped build and continuously optimize multiple online products and services for sales and…

The CBD industry is booming with estimated US CBD sales to surpass $800 million this year alone. And there is no slowing in sight. By 2022, US CBD sales may reach $1.8 billion. 

This is certainly a clear call to action for anyone considering selling CBD online. The industry has had no shortage of new sellers, some not so predictable. Sure, there are those who have been in the cannabis industry for decades and moving toward CBD products. But there are also dads, moms, even grandmothers building businesses around CBD.

Here are a few interesting statistics:

  • Hemp-derived CBD is legally available across North America thanks to the 2018 Farm Bill
  • Consumer demographics are highly diverse with baby boomers leading segment growth, increasing 25 percent YOY
  • 38% of CBD users are women
  • Women are also leading the charge in CBD business ownership
  • CBD has decreased or stopped the use of over-the-counter pain medications among 71% of users

But all statistics aside, you need to really understand how to legally market and sell CBD products, especially online. There is no shortage of competitors, however, the supply is currently not meeting demand. People are turning to CBD for chronic illnesses, surgery recovery, acute pain and discomfort relief, and mental health issues.

Products also come in different forms, including oils, tinctures, sprays, lotions, balms, pills, and vape. Where do most people buy these products? The top three distribution channels are drugstores, online retailers, and supplement stores.

With 43% of CBD sales happening online, the time to launch a CBD business has never been better. But there are obstacles. Selling CBD online does have similarities to setting up any other online business. You need to set up an ecommerce store with a hosting provider, develop content, create social media accounts for your business, and the list goes on.

There are, however, idiosyncrasies specific to CBD products that you need to know and follow to sell online. For instance, finding a payment processor for your online store. This in itself can prove challenging if you aren’t familiar with high-risk payment processing.

The good news is that we have done the due diligence for you. The following ultimate guide to selling CBD online can serve as your roadmap to get your business up and running.

Let’s dive in.

 

What is cannabidiol (CBD) exactly?

Before we jump into market know-how and the actual selling bit, we should cover the “what” when it comes to cannabidiol.

Cannabidiol, more popularly known as CBD, is a natural substance that has been found to help a number of physical and mental health conditions.

One of the top questions people ask about CBD is, “Will it make me high?” This is certainly a bonafide concern, but it’s also part of the stigma behind CBD use and sales. Contrary to tetrahydrocannabinol (THC), the substance that does get you loopy, cannabidiol is a non-psychoactive.

But that doesn’t mean that all CBD products are THC free. It is a matter of how the cannabidiol is extracted and from what type of plant, marijuana or hemp.

Marijuana Plant

  • Greater than 0.3 percent THC content
  • CBD extract is cannabis-derived
  • There’s psychoactive potential
  • Considered a schedule-1 drug in most states

Hemp Plant

  • Less than 0.3% THC content
  • CBD extract is hemp-derived
  • There’s no psychoactive potential
  • Not on the scheduled narcotics list

Will hemp-derived cannabidiol get you or your customers high? No.

However, if you fail to check with your suppliers or manufacturers where the CBD was derived, you could unknowingly be selling cannabis-derived cannabidiol, thus going from entrepreneur to drug dealer, depending on your state.

How does cannabidiol work?

This is a great question and one you should know how to answer if you plan on selling CBD products. Product knowledge is a key attribute to success, regardless of what products you’re selling.

The way cannabidiol works is actually pretty cool, and scientific. Since our bodies have an endocannabinoid system (ECS), we naturally produce cannabinoids for homeostasis. These cannabinoids, like CBD, bind to brain and immune system receptors, causing the physiological action. So when you use CBD, you’re inhibiting or activating compounds in your endocannabinoid system.

study published in Neurotherapeutics (2015) outlined the effects of cannabinoids on seizures. They concluded that “CBD avoids the psychoactive effects of the endocannabinoid system to provide a well-tolerated, promising therapeutic for the treatment of seizures, while whole-plant cannabis can both contribute to and reduce seizures.”

It’s science. And the successful applications and outcomes for CBD use in a variety of medical health scenarios is the scientific pudding of proof.

 

Understanding the CBD market

You need to research the market before diving headfirst into a new business. Yes, the CBD industry is exploding. Yes, sales of CBD will more than double in two short years. However, there is still much to consider before opening up your online shop.

Knowing the “why” behind the growing sales of cannabidiol is a must-do if you want to be successful. Here are some key points surrounding the market to pay close attention to.

CBD consumers love variety, for themselves and their pets

One of the reasons the CBD industry is on an unprecedented rise is the variety of products consumers can get their hands on. If the forms of consumption only came in two or three different ways, growth would be much slower. This industry, however, is not average.

In fact, there are hundreds of ways to consume CBD, and many are pretty marketable. For instance, there are tasty CBD-infused drinks like Neorogan Hemp CBD Tea and True Breeze Pineapple Express Hemp Shots.

Some say CBD is for the dogs — literally, serving up CBD dog treats like MediPets CBD Treats and King Kalm Crunch CBD Treats. There are actually a lot of dog treats with a cannabidiol twist. This is because CBD is not only helpful to humans, but also pets. It can be used to help ease pet arthritis, injury, and anxiety.

Knowing what types of products you want to bring to market is important. You may have a whole new CBD product that could be the next big hit for humans and pets.

Accessibility is very important to consumers

One of the main catalysts behind CBD success is the fact that consumers can pretty much get products anywhere. After the Agriculture Improvement Act of 2018, also known as the Farm Bill, passed, hemp was no longer considered a controlled substance.

This made any hemp derivative like cannabidiol, containing less than 0.3 percent THC fair game. The flood gates opened since people already knew the alternative health and wellness benefits CBD delivered.

The accessibility led to more people consuming hemp-derived products. And the increased consumption led to the explosion of CBD businesses. In fact, most CBD businesses begin with a personal story of use. It worked for them, and they wanted to share it with the rest of North America.

The stigma of hemp and cannabis is fading

Lastly, the stigma surrounding hemp and cannabis is quickly fading. After the Farm Bill passed, the production of hemp products increased significantly. This coupled with recreational cannabis legalization in a number of states, and you have the perfect positivity storm.

More people than ever are dabbling in some form of cannabis or hemp consumption, mainly to reduce the symptoms and side effects of a physical and/or mental health issue. The new positive view is also shared among political lines with 54 percent of Republicans and 76% of Democrats supporting the legalization of marijuana.

The generational gap for legalizing marijuana has also been bridged. Here’s a breakdown by age range for the support of cannabis.

AGE Percent that supports cannabis
18-34 72%
35-49 64%
50-64 57%
65+ 46%

Favorable views toward cannabis go a long way when it comes to CBD. Hemp-derived CBD does not have the psychoactive effects of THC, meaning that people can get alternative health benefits without the high. And if the stigma around cannabis is fading, the stigma surrounding CBD is nearly non-existent.

 

How to sell CBD online efficiently and legally

You know what types of CBD products you want to bring to market, and you have a strong understanding of said market. Now what? There are millions of customers to reach, but understanding the best, most efficient and legal ways to sell CBD online is next. 

Please join us for a LIVE Tech Moment with Kristina Etter and guest, Ro Bhatia of LimeLight. During this LIVE Webcast and Q&A session, we'll discuss the challenges that CBD merchants face in obtaining reliable payment processing and we'll share all the little known secrets that will catapult you ahead of the competition by getting you to market faster. 

 

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