How to Start a CBD Retail Business - Finding a Manufacturing/Supplier

Welcome to part 2 of our 3-part series on how to start a CBD retail business! Last time, we talked about the different types of CBD products you can sell, and some of the legal implications. But no matter what you decide to sell, first you’ll need CBD. How do you find a reputable supplier? What are you looking for?

You can find plenty of CBD suppliers, just by looking online. You can buy it through a website, or, depending on where you’re located, there may be local brick and mortar suppliers as well. Do some research, and see what your options are. But the key is to vet them, and make sure they’re reputable. Here are a few tips.

Sourcing and Extraction

Does the seller grow their own hemp, or do they source it from somewhere else? If they grow it themselves, find out what methods and practices they use when growing it. If they source it from elsewhere, then where does it come from? How much experience does the grower have? Do they have a good reputation? Growing hemp has been legal in Europe for longer than in many other places, so their farmers tend to have more experience. Therefore, hemp sourced from Europe is often more reputable.

The next question is, how do they extract the CBD from the hemp? There are a number of methods, and some are better than others. Some methods use chemicals, which can then remain in the CBD once it’s extracted. If you want your CBD to be pure, look for a seller that uses CO2 extraction. It takes a bit more time and effort, and will likely cost a little more, but it’s safer and cleaner. It’s worth the extra money to be able to provide your customers with the highest possible quality product.

Reputation

Any supplier will tell you that theirs is the best product you can buy. But how do you know for sure? First, if they tell you anything about the incredible medical benefits of their CBD, that’s a big red flag. CBD isn’t regulated by the FDA, and therefore, sellers aren’t allowed to make any claims about its medicinal properties. In fact, their website should have a disclaimer from the FDA to that effect. If they don’t have the disclaimer, and/or are making medical claims, then they’re a bit shady, and you probably shouldn’t do business with them. (And keep in mind, the same regulations will apply to you, once you start selling.)

Additionally, for any product you buy, make sure to get a Certificate of Analysis (COA). It’s a brief overview of the quality of the product you’re buying. It tells you how much CBD is in the product, what level of THC is in the CBD (federal law says 0.3% or less), and other important info. If you’re still skeptical, you can hire an independent third party to test the product and confirm its quality.

Also, look at the price. Obviously, you don’t want to pay too much, so that you can maximize your profit margin. But if the supplier is selling their product dirt cheap, there’s probably a reason. CBD prices can vary, but do your research to see how much you can expect to pay in your area, how much is too much, and how much is so cheap that you should be suspicious. 

Those are the basics of what you need to know when it comes to finding and vetting CBD suppliers. But once you have your CBD, then what happens when you actually start selling it? You can’t just start taking people’s money. There are a number of things you’ll need to do, to make sure your business is properly set up and legal. We’ll cover that in our next installment of How to Start a CBD Retail Business, entitled, The Business Side