Profitable CBD Enterprise

What You Need to Turn Hemp into a Profitable CBD Enterprise


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Cannabis is all the rage these days. From medical cannabis to recreational marijuana and CBD products marketed for health and wellness, cannabis and its extracted oils are big business around the world. Have you been thinking of having a go of it yourself? Are you thinking about starting a CBD business?

For the purposes of this post, a CBD enterprise involves either wholesale or retail distribution. Most people looking to get into the CBD market have neither the financial resources nor expertise to get involved in manufacturing or processing. But even opening a wholesale or retail enterprise is not easy.

Here is what you need to do it:

Reliable Suppliers

Turning hemp into a profitable CBD enterprise requires relationships with reliable suppliers. If you were to open a wholesale operation, your suppliers would be manufacturers and processors. As a retailer, your suppliers would be wholesalers.

Some wholesalers operate as manufacturers, too. They eliminate the middleman by manufacturing products and selling directly to retailers. If that is what you wanted to do, you would have to invest in hemp extraction equipment and manufacturing space. You would also need a license along with the workers to operate your equipment.

Hemp extraction equipment isn’t cheap, according to Houston-based CedarStoneIndustry. That’s why most wholesalers leave manufacturing and processing to others. They prefer to purchase from their sources and sell to retailers.

A License (where applicable)

You may need a license, depending on the type of enterprise you operate and its location. Some states require that all cannabis-related businesses be licensed even if they are only involved in CBD. Other states limit licensing to the growing, processing, and distribution of THC products.

Licenses can range from a few hundred dollars to several thousand. Growers and processors tend to pay more for their licenses than wholesalers and retailers. But again, licensing fees vary from one state to the next.

A Solid Location

It has been said that location is everything in business. It certainly is in the CBD space. As a wholesaler, you would ideally want a location that gives you easy access to your retailers. Whatever location you choose would have to include sizable warehouse space so that you could stock enough product to keep retailers supplied.

Retail operators look for locations capable of generating heavy traffic. Small shops in strip malls are pretty popular. So are retail spaces in suburban shopping centers.

As a retailer, you could choose to completely bypass the brick-and-mortar model in favor of online sales. Online retail, also known as e-commerce, requires considerably less overhead. However, you still need to invest in building and maintaining a website, digital marketing and SEO, and the space to store your inventory.

Sufficient Funding

The one thing that trips up so many new business owners is funding. A general rule of thumb is to ensure you have at least a year’s worth of funding lined up before starting a new business. Most businesses that succeed in the long term do not generate much of a profit in that first year, if any at all.

Everything in the CBD business costs money. From expensive hemp extraction equipment to office supplies, you need to spend money on certain things. And of course, you need to spend money to make it. There is no getting away on the cheap.

There is money to be made in wholesale and retail CBD. Right now, the market is extremely hot and continuing to grow. You may have what it takes to start a CBD enterprise and succeed. Then again, maybe not. Operating a business isn’t for everyone.

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