Selling CBD Wholesale: CBD Distributor Opportunities & Getting Into the CBD Business The option to sell hemp-derived CBD wholesale is an appealing one; cannabidiol is high in demand and retailers Secret Nature offers unique hemp distribution opportunities that take full advantage of the latest trends within the CBD industry.
Selling CBD Wholesale: CBD Distributor Opportunities & Getting Into the CBD Business
The option to sell hemp-derived CBD wholesale is an appealing one; cannabidiol is high in demand and retailers are catching on.
Legal global sales of cannabidiol, or CBD, skyrocketed between 2014–2018, climbing from $3.4 billion to $11 billion during the four-year period.
In March, CVS Health revealed its plans to stock CBD topical products in 800 stores spread across eight U.S. states. Shortly after, Walgreens Boots Alliance announced it would also start carrying CBD topicals in 1,500 stores. Some other big-name retailers jumping on the bandwagon include drugstore chain Rite Aid and America’s largest supermarket chain by revenue, Kroger.
According to a new Gallup poll, one in seven Americans are CBD consumers. With so many product options on offer, such as tinctures, vape oils, topical salves, and more, being a CBD reseller has potential to be a profitable venture.
Brightfield Group analysts recently predicted that year-over-year CBD sales in the United States will soar 706% this year to approximately $5 billion. Thanks to the rise of CBD wholesale companies marketing CBD products online, sales are forecasted to top $23.7 billion by 2023.
If we compare these figures to the amount of CBD sales recorded in 2018 — around $620 million — it is clear that the market is on a steep incline. This means that the industry grew at a compound annual growth rate (CAGR) of 107%!
As the CBD market continues to flourish, so too do the opportunities for sellers. Enter selling hemp-derived CBD wholesale.
What is CBD Wholesaling?
If you are wondering how to get into the CBD business, why not sell hemp-derived CBD wholesale? Companies that specialize in this segment of sales will deal primarily with bulk orders — typically for brick-and-mortar or online stores.
Hemp-derived CBD distributor opportunities are also abundant, and you won’t be limited to just oils. Working as the middleman means that you can choose the specific type of product you wish to sell.
While the growers and suppliers focus on getting the product ready for the customer, CBD wholesale businesses sell to various retailers and outlets for onward sale. Wholesalers can avoid the time and costs associated with preparing the goods for sale to the end-customer; they simply sell CBD in bulk for a lower unit price to the retailer.
Before You Start: The CBD Wholesale Checklist
When the 2018 Farm Bill federally legalized industrial hemp production across the U.S., more people became curious about how to get into the hemp-derived CBD business. After all, the bill established the foundation for the production and sale of CBD products made from industrial hemp.
Under the Farm Bill, hemp must contain no more than 0.3% of the psychoactive cannabinoid THC (tetrahydrocannabinol), as measured on a dry-weight basis.
With this in mind, there are a few other things to tick off your checklist:
1. Do you have a quality supplier?
If you cannot trust that the supplier manufactures high-quality, uncontaminated hemp-derived CBD, don’t expect to have an easy time selling it. Quality suppliers will source their hemp inputs from farmers that cultivate hemp in accordance with the highest cultivation standards.
Find out if your supplier uses pesticides and chemical fertilizers; they may help to yield bountiful crops, but consumers could be harmed if they use products containing these chemicals. For seeds, inquire about the THC to CBD ratios before buying and seek out a quality breeder with a solid reputation in cultivating CBD-rich hemp strains.
2. Is your supplier legally licensed to manufacture and sell CBD?
And is the hemp material used to make the CBD sourced from a licensed farmer?
Anyone who is keen to learn how to get into the CBD business shouldn’t sidestep this point. This is a question you simply must ask and verify before buying CBD products to sell wholesale. If the CBD was not lawfully sourced from a properly licensed manufacturer using lawfully sourced hemp, you could be purchasing, distributing, and selling at wholesale an unlawful product. This could expose your business, your investors, your employees, and even your customers to a host of regulatory and legal violations — some of which could include criminal sanctions.
3. Does your supplier use third-party testing?
When you are on the hunt for hemp-derived CBD distribution opportunities, pay attention to third-party testing. Request to see lab test results for each production batch of CBD and observe the levels of cannabinoids and terpenes (biological compounds in the plant that can have unique properties by strain) contained in the CBD product.
Failure to do so means you have no idea exactly what it is you are selling, creating a major risk for your business — the CBD products you resell may contain too much THC and too little CBD, making your products unlawful under the Farm Bill and state law. Also, the labels may be incorrect and misleading; the products might be laden with traces of solvents, pesticides and/or metals exposing the end-consumer to health risks; or the products may not be up to the specifications of your business or retailers, making the products unusable.
Additionally, sophisticated retailers will almost always request batch-specific testing information. Without testing results, you are significantly limiting your market opportunities.
4. How long has your supplier been in business?
Aim to find well-established CBD suppliers with a proven track record. New suppliers should not necessarily be avoided, but perform some research prior to buying anything from them. Consider how many sales they have made, what their target market is and, of course, what the customers have to say about their business.
5. Do you have a plan to penetrate the CBD wholesale market?
If you are to stand out among the ocean of hemp-derived CBD wholesale sellers, you must prove it.
Demonstrating how your company can simplify the process of obtaining lawfully sourced, high-quality CBD will give you an opportunity to stand out. Prove how you can provide access to markets.
Remember to track precisely where your hemp-derived CBD products are being distributed. This is essential, among other things, because some states continue to prohibit the possession and sale of CBD products.
Your company and its stakeholders may also be slapped with criminal sanctions if you fail to monitor distribution, so keep this in mind if you want to penetrate the market on a large scale.
6. How is your CBD better?
A CBD wholesale company that carries the best brands is sure to stand out over one that stocks unknown or less favored brands. Quality CBD products will be produced using high-quality industrial hemp manufactured inside a facility that is FDA-registered and CGMP Certified. If your CBD has been produced and tested by industry experts, doctors, and scientists — even better.
7. Do you have hemp-specific licenses/qualifications?
Some states require a hemp handler’s license in order to possess or distribute hemp and/or hemp products. Other states may require a special hemp processor license. Some states may also regulate CBD under their existing food safety laws, which requires that facilities where hemp products, including CBD, are produced, stored, and distributed be registered with the state’s department of health and operate in compliance with food safety laws and regulations.
Finding the Right Supplier(s)
Perhaps the most crucial step to succeeding with selling CBD wholesale is finding a dependable supplier. Avoid selling something that you would not necessarily consider trying yourself. Low-quality products will reflect poorly on you as the wholesaler, so don’t cut corners to save yourself money.
A trusted supplier should be certified by the U.S. Hemp Authority program. Additionally, a CBD supplier should be compliant with regulations laid out by the Food and Drug Administration (FDA).
Here are some other things to look out for when seeking out CBD product opportunities:
1. Look at third-party testing results.
Before you start to sell CBD wholesale, take it upon yourself to ask the supplier for proof that their product is safe for human use and/or consumption. Microbial contamination is common in hemp plants. Contaminated products may cause human toxicity and unwanted pharmacologic effects.
Confirming a product’s reliability and potency is dependent, in part, on the results gleaned from third-party CBD testing.
2. Try some of the product yourself.
If you know how well a hemp-derived CBD product works, you can feel confident about buying and reselling it. Make a note of what each product looks, tastes, and smells like; how it made you feel; whether or not you experienced any side effects; how the product was packaged and branded, etc.
It’s worth asking a supplier for some free samples as a means of determining its suitability for CBD wholesale reselling.
3. Test against other products.
During the testing phase, compare products side-by-side for an accurate insight into which brands are worth buying from. Make sure the products contain the same level of CBD, so as to draw up the most precise judgement on its potential. Keep a note of each brand’s pros and cons before coming to a conclusion.
4. Visit the manufacturing facility.
Once you have narrowed down your options to just a handful — after testing several hemp-derived CBD products against each other — arrange a trip to the supplier’s cultivation and/or manufacturing facility. This will grant you an inside look at processes of that particular brand and how safely they conduct business in accordance with applicable laws.
Example CBD Suppliers
Learning how to get into the CBD business demands a certain level of knowledge on the best suppliers. Allocating time to finding one you want to work with is not always possible with so many other tasks to accomplish while setting up a wholesale CBD company.
On that note, we have highlighted some CBD suppliers online and some of the advantages to each.
Since its inception in 2015, CBDistillery has gained a solid reputation as a trustworthy partner of thousands of nationwide retailers. All products supplied by the company are tested by third-party laboratories and packaged with clear labeling. Examples of the retailers CBDistillery partners with include convenience stores, independent pharmacies, medical/healthcare offices, and wellness centers.
2. Global Cannabinoids.
A number one producer, manufacturer, and distributor of American-cultivated, hemp-derived CBD, Global Cannabinoids was also established in 2015. Specializing in bulk and wholesale CBD, the company’s product range includes CBD coffee, water-soluble nano CBD, pure hemp oils, CBD-infused bath bombs, CBD-rich full-spectrum tinctures, and CBD soft gels, to name a few.
Another company worth consulting for wholesale CBD oil opportunities is HempMeds. The company produces Real Scientific Hemp Oil™ using hemp cultivated on a fifth generation hemp farm in the Netherlands. Triple lab tested hemp is derived from hemp seeds certified with the Organization for Economic Co-operation and Development (OECD).
This CBD supplier describes itself as “the Innovation leader in the CBD Industry.” By utilizing a TruSpeKtrum technology platform process, Kazmira prides itself on eliminating traces of THC, chlorophyll, and plant wax from its products. Trace cannabinoids like Cannabigerol (CBG), Cannabichromene (CBC), and Cannabinol (CBN) are also eradicated from Kazmira’s THC-free CBD.
Finding Your Retailer Niche
Just like any other industry, one of the most important metrics to consider when getting involved with CBD wholesale centers around points of distribution is how many different retailers stock the product.
Various business-to-consumer (B2C) retailers concentrate on CBD products. Tapping into the potential of their resources will ensure that your inventory is always in high demand.
The following B2C retailers have a targeted customer base and will be on the lookout for CBD wholesale specialists when they need to replenish stock.
1. Head shops.
Head shops are rooted in cannabis culture, sprouting from the hippie scene in the late 1960s. Retail outlets of this kind specialize in pot paraphernalia specifically designed for social consumption.
Advantages: These types of retail stores are worth contacting if you are selling wholesale CBD products online. Scattered around most large cities, head shops boast existing clientele and a loyal local customer base.
Challenges: Head shops are preferred by adult-use cannabis consumers. This means that CBD consumers may stray from them. Some head shops may also struggle to compete on quality with other retail outlets.
2. Online retailers.
The number of online shoppers is predicted to reach two billion this year, with the figure anticipated to top 2.14 billion by the year 2021. With so many people buying products digitally, it would be a shame not to tap into the potential of online retailers.
Advantages: Online retailers demand far less infrastructure than brick-and-mortar stores. Plus, considering there are 4.39 billion internet users as of 2019, the customer reach is far larger than any other options.
Challenges: Due to high demand from customers, online retailers can be difficult to get in touch with. Moreover, online markets are fairly saturated.
3. Specialty brick-and-mortar shops.
Specialty stores cater to a particular retail market. A few prime examples of specialty brick-and-mortar businesses that would welcome CBD products include vape shops, smoke shops, health/wellness stores, and nutrition stores.
Advantages: You can find these types of stores peppered around most cities and states, making them easy to track down and get in touch with. With their local feel and the fact that they only carry specific products of quality, they tend to have a loyal customer base.
Challenges: Much like dispensaries, specialty brick-and-mortars will be overly scrutinizing what they sell. This means that you’ll need to choose the highest quality products if you want to sell CBD wholesale to this type of retail outlet. Prices tend to be higher than in head shops or dispensaries, so you’ll need higher margins to stay in business.
Picking CBD Products to Sell
Choose the specific products you want to sell CBD wholesale based on the target market you intend to capture. Are you hoping to attract the attention of wellness-focused consumers, or people who are looking to try CBD for the first time?
Alternatively, you may want to sell CBD wholesale to retailers with consumers interested in using this non-psychoactive cannabinoid for skin care. Whatever the reason, make sure your chosen audience is likely to visit the specific outlet(s) where you distribute products.
Below, we highlight the main areas of interest for CBD consumers. Please note that the FDA’s position is that it is unlawful under federal law to add CBD to food products, including tinctures, edible products, and beverages.
1. Oils and tinctures.
By 2023, the global CBD oil market is expected to turn over USD $23.7 billion. Oils — which can be administered in the form of a tincture — are discreet and convenient.
2. Edibles and gummies.
Although edibles and gummies may take longer to kick in, the effects are often longer-lasting. The diversity that comes with consuming edibles, such as the endless flavor options, has contributed to growth in this segment of the CBD market. This year, projections for the CBD-infused edible market are $4.1 billion by 2022.
Drinks are another segment of the CBD market where you can potentially profit. Scientists and product developers have mastered a way to infuse CBD into water, and there are even dissolvable CBD powders available!
Industry analysts say this is one of the fastest-growing areas of CBD retail; between 2018 and 2023, the CBD beverages market will grow at a compound annual growth rate (CAGR) of 74.7%.
4. Topicals and skin care.
Topical and cosmetic CBD products are increasingly available and are often the preferred product type for large national retail chains.
A report released in August 2019 from Grand View Research, Inc. suggests that the value of the global CBD skin care market will surge to $1.7 billion by 2025.
In spite of the recent issues around contaminated vape products, this market is booming. Vaporizing CBD oil delivers a wallop of cannabinoid-richness to the lungs, and the effects surface almost instantly.
CBD-filled capsules and supplements can be taken on the move, in the privacy of one’s own home, or even just before hitting the gym. This segment of the market falls into health and wellness.
Keep in mind that the FDA’s position is that it is unlawful under federal law to market CBD as or in a dietary supplement.
Building a Website to Fit Your CBD Narrative
If a retailer is going to buy wholesale hemp-derived CBD from you, they need to know you’re serious about what you do. In the same way that customers seek out trustworthy sellers online, a retailer will first assess your services based on how you appear online.
Without a website, standing out from the crowd will be nearly impossible. Plus, when you consider the fact that 72% of ecommerce will occur on a mobile device by 2021, you simply must have a mobile-friendly website if you are to attract the right clientele.
As noted by the FDA, making health claims about CBD is not permitted. On that note, let’s find out what else is required to attract CBD wholesale buyers.
1. Make it beautiful and easy to read.
Putting a little bit of effort into the way your CBD wholesale website appears from a retailer’s perspective will go a long way. A well-designed website that contains all of the necessary information will reflect on your professionalism.
Thankfully, BigCommerce makes it easy. With a broad spectrum of visually stunning designs and themes to choose from on our platform, you can deliver a personalized experience and bolster the chances of converting leads into sales.
2. Show test results.
Don’t forget to publish third-party lab test results online. This will help retailers make an informed buying decision. If you don’t review third-party lab tests, a supplier could claim that various ingredients are contained in their product when in fact, they are not.
3. Highlight brands.
Retailers will want to see exactly what types of CBD products you intend to distribute to their stores, as well as the brands you carry. With the BigCommerce platform, you can easily promote your services in an appealing and eye-catching way. Our website design feature makes it possible for anyone to create a website featuring your selection of CBD brands in no time.
4. Attach pricing sheets if possible.
Approximately 55% of visitors will spend only 15 seconds on a website before they lose interest or continue browsing. With that being said, you should feed retailers with the information that they need in a bite-sized and comprehensible way.
One of the main things a retailer will want to know is pricing, since they must consider their budget and profit margins before they can make a purchase. Either have an online pricing sheet or downloadable PDF of all your available products and the prices for quantities. Something like this:
How to Become a CBD Distributor
CBD and everything else hemp-related is only becoming more popular with time, and projections suggest that the domestic hemp market is about to explode into an unprecedented period of growth based on a variety of emerging factors. With demand for hemp products increasing across multiple channels, there’s never been a better time to buy CBD products wholesale and distribute them at retail prices.
Certain approaches to distributing CBD, however, have proven more effective over the last few years than others, and you can save yourself a significant portion of your time and capital investments by learning from the mistakes of those who came before you. In this guide, we’ll cover some of the key data supporting the continued viability and low barrier to entry of the CBD industry and thoroughly explain why becoming a Secret Nature CBD distributor is the best way to capitalize on everything that emerging hemp markets have to offer.
Why should you sell CBD?
The euphoric buzz surrounding the hemp market has largely dissipated in the last few years as the CBD industry’s vibe has come to more closely reflect the mild, non-intoxicating effects this cannabinoid provides. With increased competition and the legitimization brought about by legislation like the 2018 Farm Bill , bad actors have largely been competed out of the CBD market, and larger companies have begun cementing their footholds.
In many ways, CBD has taken on the attributes of a permanent fixture in American life, and while this transformation may be bad news for snake oil salesmen who simply want to make a quick buck, there’s never been a better time for legitimate entrepreneurs to enter the hemp market. Consumer awareness of CBD has reached new heights, and as self-imposed quality standards have become normalized, the CBD industry has also become significantly more trustworthy.
Beyond these general trends, there are also a few concrete factors that prove the ongoing viability of the CBD industry beyond a shadow of a doubt. Mainly, trustworthy market studies have demonstrated that (despite ongoing normalization) the hemp industry will continue to experience explosive growth, and the CBD market is rapidly evolving to accommodate more non-intoxicating hemp constituents than just cannabidiol.
CBD market expectations
According to the economic journal Market Research Future, the global CBD market is expected to grow by 125.58% per year over the next six years. The CBD industry was already valued at over $500 million in 2018, and the total size of this emerging market will grow at an exponential rate for the foreseeable future. What’s more, around 20% of Americans have already tried CBD, and over 60% of Americans trust that CBD has legitimate medical applications.
Considering these expectations and statistics, there is still plenty of room for growth within the hemp industry. While more than ⅔ of Americans are open to the benefits of CBD, less than ⅕ of the population has used this cannabinoid, indicating that more than 40% of people in the USA have yet to be reached by CBD brands and distributors. While an increasing number of consumers gravitate to online shopping every year, there is still plenty of room for growth in other sales channels as well, providing room for a practically limitless number of entrepreneurs to leave their mark within evolving and established segments of the hemp industry.
The future of cannabinoids
Many aspiring hemp entrepreneurs still can’t see beyond the allure of CBD. This cannabinoid seemingly solves all the traditional issues with THC by being non-intoxicating and non-addictive while still providing significant benefits. The people who are laser-focused on CBD today, however, are the same individuals who failed to foresee the rise of CBD a decade ago.
THC and CBD are hardly the only cannabinoids that Cannabis sativa expresses. All told, this plant produces more than 100 cannabinoids, but most of them are analogs or copies of a few main compounds including cannabigerol (CBG) , cannabinol (CBN), and cannabichromene (CBC). Each of these “minor cannabinoids” are each expressed in most cannabis strains in such small quantities that many entrepreneurs put them aside in their calculations, but all that is about to change.
Already, CBG is approaching the level of popularity that CBD has maintained for more than half a decade. This cannabinoid is very similar to CBD, but it’s different enough to be desired for its unique traits. The same goes for CBN and CBC, and further cannabinoids, such as CBDV and THCV, are also starting to enjoy their moments in the sun.
The future of the cannabinoid industry is not limited to CBD, THC, or any other single Cannabis sativa constituent. Instead, we’re currently witnessing the birth of an all-encompassing hemp industry composed of a greater number of distinct, profitable segments than anyone ever expected.
Becoming a CBD wholesale distributor: 7 easy steps
The hemp industry isn’t going anywhere, and this unique, highly profitable sector of the economy will only continue to grow in the coming years. Now that you understand the value of capitalizing on the opportunities available within the CBD industry, let’s go over the roadmap that every aspiring hemp distribution entrepreneur should follow on the way to greatness:
1. Study the market
First, take your time to fully understand the market that you are approaching. The information we’ve provided above is a good start, but you’ll need to invest a significant amount of time into your own research to avoid common pitfalls and capitalize on profitable ideas.
If you enter the hemp industry with your head full of principles that were applicable in 2018 but won’t be valid in 2022, you’ll end up fighting over scraps instead of enjoying the spoils of the hunt. Learn the history of the CBD market, understand its current form, and project your expectations into the future to understand where this emerging industry is heading and position yourself for the most benefit.
2. Create a business plan
After coming up with a general idea of how to approach the CBD market, take some time to develop a comprehensive business plan. Whether you’ll be shouldering all of the costs of your new business yourself or you plan to seek the assistance of investors, plotting a clear path toward success will help you get the most out of your new venture.
First, determine both the initial and ongoing costs of your enterprise. While marketing CBD products online costs less than operating a brick-and-mortar store, acquiring customers, managing inventory, and handling fulfillment aren’t free. Even the smallest CBD distribution businesses need at least $5,000 in startup capital and make sure to keep your monthly cost estimates realistic to avoid unexpected pitfalls.
Next, you’ll need to determine how long it will take for your business to become profitable. Investors will want to know this information more than anything else, and even if you’re going it alone, the first day you turn a profit is the first day you’ll get paid as a hemp entrepreneur. Leverage your expected costs against your projected revenue to get a clear idea of when your business will be in the black.
3. Determine your sales channels
Part of coming up with an effective sales plan is figuring out how you will sell your products. If you plan to open a brick-and-mortar store, you should also consider offering products online, and if your new distribution business will be strictly online, you’ll need to consider how you will acquire and retain customers.
Online businesses commonly advertise on social media, and you may also want to explore the potential of pay-per-click (PPC) advertising even though most PPC ad companies are traditionally averse to hemp-oriented enterprises. If you operate a website to distribute your CBD products, you’ll need to invest in search engine optimization (SEO) to compete with other sellers, and you’ll also need to take other factors into account like product pictures and site design.
4. Select the products you want to sell
Now that you’ve established a basic plan for how you’ll move product, you need to determine which segment of the hemp economy you want to target. Do you want to capitalize on emerging trends and offer CBG-rich products, or do you want to accept greater competition and offer products within traditional CBD product categories?
Even if you decide to solely offer CBD products, there are lots of different product categories to choose from. Tinctures, capsules, and topicals have become the norm within the CBD industry, but over the last couple of years, the CBD flower sector has experienced explosive growth, making this product category the primary target of savvy hemp entrepreneurs.
5. Pick a qualifying wholesale brand
Even the best-laid CBD distribution plans will go awry if you don’t pick the right products to sell. Your ideal brand partner will provide you with fair prices, offer consistent access to products, and operate reliably and professionally in every way that matters.
In general, it’s best to work with brands that have been around for a while. A CBD company that just came into existence may cease to exist just as quickly, leaving you in the lurch and forcing your customers to get used to new products. Since there’s more competition within the CBD industry these days, it’s also important to choose a company with high-quality products that stand out.
6. Choose a name and acquire licensing
Before your CBD distribution business can start legitimate operations, you’ll need to choose a name for your company and acquire a business license. You don’t need any special licensing to sell CBD products, but depending on the type of business you intend to operate, you might need to get in touch with your state, county, or local licensing office to get your hemp distribution operation off the ground.
7. Start selling
You’ve dotted your “i”s and crossed your “t”s, and now it’s time to get down to business. Remember that any distribution business can take a while to get going in full swing, and with online-only CBD distribution businesses, getting up to speed can take even longer since search engines will need to crawl and index your site before potential customers can find you.
Keep trying your best to build awareness of your company, and don’t be too disappointed by minor setbacks. The CBD industry will be around for a long time, so as long as you diligently pursue your goals, you’ll achieve success as a CBD distributor before you know it.
Become a successful Secret Nature distributor today
Secret Nature offers unique hemp distribution opportunities that take full advantage of the latest trends within the CBD industry. Hemp consumers are ditching capsules, gummies, and other ineffective products and embracing CBD flower at an unprecedented pace, so positioning yourself within this rapidly growing sector of the hemp economy is the best way to position yourself for long-term growth.
At Secret Nature, we understand that CBD isn’t the be-all, end-all of the hemp industry, so we also offer CBG flower along with vape cartridges that contain other trending, non-intoxicating cannabinoids. As the hemp industry continues to evolve, Secret Nature will prove to be one of the only brands in the world that have the flexibility to evolve in response, so taking the steps to become a Secret Nature wholesaler today is an ideal way to enjoy short-term benefits that lead to long-term security.