Do You Need A License To Sell CBD Oil

CBDISTILLERY

Buy CBD Oil Online

Before you start selling CBD online, read our guide on CBD regulations and how to grow your CBD brand over time. Read about the CBD laws, regulations, and requirements for CBD business in Ohio, USA

How to Legally Sell CBD Online (and Grow Your Brand)

Disclaimer: While we’ve done substantial research for this post, but we do not claim to be experts on CBD regulations or selling CBD products. We always recommend that you do additional research before making decisions for your business. Laws and regulations are subject to change.

With new technology and evolving regulations, CBD oil products are now mainstream in the consumer market. An estimated 64 million people in the US have tried CBD in the past two years.

Before you start selling your own CBD products online though, there’s a few things you should know about.

What CBD products are legal to sell? How do you comply with your eCommerce platform’s rules? How do you finance a CBD business?

Keep reading to get the answers you need to ensure you legally sell CBD and create a brand that lasts.

What is CBD?

CBD (cannabidiol) is one of more than 100 active chemical compounds found in cannabis, or marijuana plants. It doesn’t contain any of the compound THC (tetrahydrocannabinol), which is what produces the “high” associated with marijuana use.

CBD is what is thought to help alleviate symptoms like pain and anxiety. With these benefits and no effects of getting “high,” CBD is growing in everyday use among consumers.

Common CBD oil or CBD-infused products include:

  • Tinctures
  • Edibles
  • Isolates
  • Capsules
  • Vaporizers
  • Topical formulations
  • Patches
  • Pet products

Without traces of THC, CBD is considered legal to sell – in most cases.

How to Comply with CBD Regulations

As CBD becomes a high-demand product, regulations around selling it are evolving. It’s your responsibility to understand the latest laws and what it means for your online business.

Federal Regulations for CBD

For decades before, federal law did not differentiate hemp (where CBD comes from) from other cannabis plants like marijuana. Therefore, CBD was still classified as illegal.

However, the recent 2018 Farm Bill changed all that. It legalized hemp production across the US, which is why you can now sell CBD products.

While this bill is a significant step for CBD sellers, there’s still serious restrictions on how hemp is produced.

  1. Any cannabis plant must contain less than 0.3% THC, otherwise it’s considered marijuana under federal law.
  1. A state’s ability to license and regulate cannabis must be approved by the Secretary of USDA.
  1. Producers can face violations if their actions don’t follow the laws

So, is it legal to sell CBD? Yes, CBD with less than 0.3% THC is legal nationally in the United States.

But, keep in mind that CBD is not generally legal.

Any hemp-derived products must comply with regulations set forth in the 2018 Farm Bill. Any non-compliant CBD can be considered a Schedule 1 substance under federal law, just like marijuana, heroin, and LSD.

Beyond federal law, CBD sellers also must consider that the FDA will call out brands who market products that contain cannabis in ways that violate the Federal Food Drug and Cosmetic Act (FD&C Act) and could put consumer health at risk. This means you can’t add CBD to food or label it as a dietary supplement.

The reality is that research on CBD in consumer products is in its early stages. So, the FDA is on the lookout for sellers marketing their CBD products with unproven medical claims and unknown quality.

Statewide Regulations for CBD

While legal on a national level (with restrictions), you also need to be aware of CBD laws that vary by state. Some states:

  • Prohibit the sale and consumption of CBD
  • Limit the types of CBD products allowed or require licensing
  • Allow marijuana-produced CBD and/or only industrial hemp-produced CBD

Due to the evolving nature of CBD regulations, it’s best to connect with local representatives and keep up on statewide laws of where you sell.

How to Source CBD Products

Finding a CBD supplier is crucial to quality products and meeting current regulations. As pointed out above, there’s still restrictions on what makes CBD legal or not.

When evaluating CBD suppliers consider the following.

High-quality CBD oil products will be:

  • Derived from industrial hemp that meets federal compliance
  • THC content of less than 0.3%
  • Processed from the plant’s stalks and leaves
  • Free of any unnecessary chemicals or contaminants (affected by the CBD extraction process)

Avoid CBD products from suppliers that:

  • Derived from marijuana itself (not legal in all states in the US)
  • Derived from hemp seeds, which contain very little CBD
  • Have more than 0.3% THC
  • Makes medical claims on their website
  • Have unusually low prices
  • Don’t follow federal regulations

Before looking at CBD suppliers, learn how to read a certificate of analysis (COA) for hemp-derived products. A COA will help you determine if there’s less than 0.3% THC in a CBD product.

See also  Can CBD Oil Be Detected In Blood Tests

CBD Compliance by eCommerce Platform

In addition to federal and state regulations, there’s also limitations on the platforms you can use to sell CBD online. Take a look at these top platforms and their stance on CBD products.

    – Permits only US merchants to sell topical and consumable hemp and/or hemp-derived CBD products (no marijuana-derived CBD) – Allows for hemp and hemp-derived products – Allows CBD products – Allows CBD products (check out their CBD guide) – Allows CBD products – Prohibits CBD products entirely – Prohibits CBD products entirely – Allows CBD oil

Payment Processors for CBD Stores

As a CBD seller, you will also need to work with a third-party payment processor to accept payment online. For example, Shopify does not allow CBD sellers to use Shopify Pay.

Instead, you will need to find a high-risk payment processor provider that is willing to accept the additional risk involved with products like CBD. Some examples are:

For whatever payment processor you do choose, make sure your eCommerce platform will integrate with the provider of your choice.

Shipping

When selling online, you should also look into product-based shipping rules. Since CBD product regulations vary by state, you’ll want to ensure you stay within safe shipping zones.

In terms of carriers, major providers like UPS, FedEx, and DHL will ship for you. USPS did put out this notice that US CBD sellers should be aware of.

The 2019 Hemp & CBD Industry Factbook predicts that retail sales of CBD in the U.S. are expected to surpass $1 billion in 2019 – a 133% increase over 2018 sales – and may eclipse $10 billion by 2024.

How to Stand out in the Crowded CBD Market

As you build your CBD brand, it’s important to craft a brand voice and marketing strategy that stands out among tough competition. CBD is no longer a novelty item. Your customers can find it on shelves at local stores like CVS and Walgreens.

So, how do you ensure someone buys from you instead of a competitor?

Quality Products

Since CBD has seen explosive growth as an industry, there’s been more than a fair share of brazen health claims and “fake” CBD products to hit the market. These problematic products have ranged from making consumers severely ill to having no real CBD in them at all.

You won’t be able to fool customers with low quality products either. They’ll be quick to call out sellers who do and be sure to let their friends know too.

Do your due diligence when sourcing your products, both for the health of your business and customers.

Basic Marketing

At the very least, cover your basic marketing efforts. That means following SEO best practices to drive web traffic, having easy-to-use website features, and consistent email marketing. These tactics are even more important since there’s advertisement restrictions for CBD on Facebook and Google.

Interacting with Your Community

In 2020, high quality products and savvy marketing will only get you so far though.

Leading brands find creative ways to interact with their communities. They understand their buyers needs and wants, and foster authentic relationships based on that.

When products are relatively equal in quality, this is what sets you apart from other sellers.

Interacting with your community can be everything from educational content, sourcing new product ideas, influencer marketing, and in-person/virtual events.

What works to build your community will vary from brand to brand. Your decisions should be based on a deep understanding of your unique audience and meeting their needs.

Take a look at CBD seller Beam. They cater towards CrossFit athletes and the benefits of CBD for fitness and recovery. Check out Beam’s Instagram feed to understand how they connect with athletes on a personal level.

Sell CBD Wholesale

If you’re a CBD manufacturer, wholesaler, or distributor, perhaps you want to concentrate more on B2B selling rather than running your own online store and/or marketplace listings.

4 Ways to Finance Your CBD Business

Once you start selling, you’ll most likely face the challenges of financing your everyday options, especially for a product that’s still heavily regulated.

How do you ensure you have enough cash on hand to keep up with inventory demand, marketing costs, or other business expenses?

Here’s a few financing options to consider:

Credit Cards

Credit cards are a go-to for most businesses to pay for general expenses like inventory. Cash back rewards can also be a great way to earn a little extra cash to put towards other needs.

Credit cards alone though don’t realistically support your entire business operations. Low credit limits and maxed out cards can still limit sellers, especially if your business is growing faster than your credit limit will allow.

Traditional Financing

There are limited traditional financing options for startup CBD brands because of legal red tape preventing financing from bank lenders.

See also  Green Gorilla CBD Oil

But, one option is called a “bridge loan”, which is a short-term loan a seller can use for immediate needs like rent, inventory, and utilities. These loans though typically have high-interest rates and require you to put up collateral, which is typically a hard asset like commercial real estate, or your home.

Even if you’re approved for a bridge loan, they can be risky for your long-term financial health. Securing a loan with personal collateral (in the event you don’t own any commercial real estate) means your business is tied to your personal assets. Any unforeseen business issue can spill over into your personal life.

Merchant Cash Advances

Since traditional financing options like loans can be limiting and risky, CBD sellers can take advantage of alternative options like merchant cash advances. They aren’t technically a loan and still give you short-term access to the capital you need to run your business.

Cash advances differ from loans in many ways. Unlike loans where the business borrows money and pays it back over time in fixed monthly payments, merchant cash advances or MCAs work differently. They are not technically debt. Instead they are a purchase of your future receivables or sales. So an MCA will purchase your future sales and collect a fixed percentage of what you sold (usually weekly or daily). So if sales go down, you pay less that day, month, or week, if they go up, you pay more. There’s usually no long approval process with cash advances, and many (including Payability) do not do credit checks. Unlike loans, MCAs never require you to put up collateral such as your house to secure the funding.

Providers like Payability offer cash advance solutions that are based on your future online sales and account health. Future sales are based on all online sales both web stores and marketplaces. Capital can be used towards large inventory purchases, marketing expenses, or other business needs. Learn more about the differences between loans and cash advances.

Check out Payability’s Instant Advance solution. With no credit checks, you can get approved for up to $250,000 in as fast as one business day. Payability will remit a fixed percentage of your online sales, making it easier to handle payments based on your real time sales.

Accelerated Daily Payments

If you sell CBD on a marketplace like Tophatter, you could also apply for Payability’s Instant Access. This solution pays you next-day, every day for all your marketplace sales. This avoids the delayed payouts of marketplaces that routinely put sellers in tight spots.

As with Instant Advance, there are no credit checks, tax documents, or complicated paperwork required. Plus, you can get approved for financing in 24 hours based on your eCommerce account health and sales performance. As long as you are abiding by the marketplace or shopping cart’s terms and conditions for CBD, Payability could be a funding option for your CBD business. Minimum requirements apply for both Instant Access and Instant Advance. These funding options are not available to brand new businesses.

Venture Capital (VC)

Last year, there was about $2.62 billion in VC investment in cannabis-related companies.

While funding can be a great fit for some brands, it does come at a cost. You give up a part of your business. There’s pressure for constant and significant top-line growth. And, you can lose the ability to make the best long-term decisions for your company.

Before taking on VC money, read more about the pros and cons of venture capital funding and its effect on direct-to-consumer (DTC) brands over the past two decades.

The Promising Future for CBD Brands

Experts project the US CBD market will grow to $89 billion by 2026, and it’s relatively in its infancy.

Getting in the market now and understanding how to overcome its challenges will ensure you build a CBD brand that lasts. For more on how to sell CBD and what types of consumers buys CBD check out The CBD Insider 2021 US CBD Consumer Report.

Jillian Hufford

Jillian Hufford has over seven years of educating merchants on digital commerce and marketing growth strategies and best practices. She is a frequent author and thought contributor on DTC and B2B commerce, SaaS software, and B2B content marketing. She also contributes regularly to CMSWire. Connect with Jillian on LinkedIn: @JillianHufford

How to Start CBD Business in Ohio

Ohio is the 25th state that has legalized marijuana for medicinal use. In this way, Ohio has open doors to the cannabis market in the year 2016. Which has allowed Ohio people to treat specific conditions with prescription marijuana. Out of 50 states in the US 33 have regularized the use of medical cannabis but are not among 11 states which have legalized cannabis for recreational use. You may know that CBD extracted from hemp is legal in Ohio which means that you can see a lot of stores and retailers selling the CBD products.

See also  CBD Oil Cool Mint

Hemp and Marijuana both are derived from cannabis but the difference is hemp contains a lesser amount of THC than marijuana. Marijuana produces psychoactive effects. CBD derived from marijuana is still illegal and subject to strict regulations because it comes under the Schedule 1 controlled substance list.

In this article, we take a look at the CBD laws, regulations, and requirements for CBD business in Ohio.

CBD Laws in Ohio

CBD derived from hemp is not toxic but many associate it with the cannabis plant. CBD products made from using industrial hemp contain THC less than 0.3%. The possession of 100gm of CBD is illegal and causes you penalties including a $150 fine and possession of 100-200gm is punishable with a fine of $250 and 30 days of imprisonment.

The use of recreational cannabis is still illegal in Ohio. There was a push to legalize marijuana in 2015 but it was not accepted by the Federal. In the year 2016, a bill was passed which legalized the use of medical cannabis and allowed to start state medical marijuana programs.

According to these programs, adults of age 21 are eligible for medical marijuana for one qualifying condition but smoking of CBD is not legal. Various support was given to CBD product for research and recently Federal laws related to cannabis have changed leading to form state own regulations for CBD.

In the year 2019, the Ohio Senate passed a bill SB 57 that legalized the purchase, sale, and possession of hemp and its related products. As an outcome of hemp legalization, the Ohio State Board of Pharmacy clarifies that CBD oil can be sold outside of licensed medical marijuana dispensaries.

CBD Business in Ohio

If you are planning to step into the US market of Cannabis then you must know what Ohio State has legalized for you

Hemp and its derived products are now legal which means you can start a business in these products as they are not considered drugs or are not under marijuana definition.

Procession, sale, and purchase of these CBD derived from hemp are legal.

Can be given to students on request same as for homeopathic remedy as per board policies

The CBD products should contain no more than 0.3% of THC which is the legal quantity

CBD Business License

For conducting CBD business in Ohio you will need a license for the CBD and its CBD products sale and hemp cultivation as per the Ohio Law.

The department of Agriculture in Ohio will deal with licensing including application, processing, and its fees

You can start a business in CBD infused dietary supplements or any edible product but make sure that the product contains CBD only from hemp.

To sell CBD or hemp products you don’t need a license

As per the Ohio Department of Agriculture if you wish to start a business in the manufacturing of CBD products including CBD oil then you will require to have a license. The manufacturing facility will be checked and inspected by the department.

How to Get a Hemp Licence in Ohio

Ohio hemp program is for starting a CBD business in Ohio. This program is for growers and processors of industrial hemp.

Cultivation Licence

Cultivation of hemp is for those who work to cultivate, harvest, process, storing, and transporting to the first sale point.

If you want to grow the hemp then you must obtain a cultivation license from the Ohio department of agriculture.

For this, you need to submit an application containing some personal information, business entity, and area location for cultivation, outdoor and indoor acres.

The license fee is $100 and an additional $500 for each growing location is required.

Individual and business entities must also submit criminal records with the application.

The license is valid for 3 years.

Processor Licence

Processing licenses are for those who form hemp products from hemp.

If a grower wishes to sell the hemp products also then he needs to have the processor license as well.

When applying for the license application then apart from providing business and personal details, it is necessary to provide information about the hemp products that will be produced.

An amount of $500 is required for each processing site and if processing raw floral parts of hemp them $3000 fee is required for each processing site.

A background check is a must for the applicant.

The license is valid for 3 years.

Author – Noah Nicholls

Noah Nicholls is a full-time Writer, Traveler, and Marketing Expert who is Currently Working for CBD-Boxes. Noah Nicholls writing relates to a range of subjects such as CBD and health.

How useful was this post?

Click on a star to rate it!

Average rating 4 / 5. Vote count: 1

No votes so far! Be the first to rate this post.