The high market demand that CBD products have is encouraging many to invest in cannabis farming and CBD distribution. Although the government has removed many of the restrictions that previously existed in hemp CBD business, the industry is still a challenging one.
Here are the biggest challenges faced by CBD businesses.
Negative Perception Of CBD
Both hemp and marijuana are cannabis plants. Hemp derived CBD and marijuana derived CBD are treated differently by the law, with the former being legal as per the US Farm Bill while the latter is still a controlled drug.
The fact that CBD can be derived from all cannabis plants makes people develop a negative idea about CBD even if it is sourced from hemp.
Complicated Payment Processing Options
Hemp and hemp derived CBD is federally legal but accepting credit card payments for cannabidiol products is an expensive process and in some cases impossible.
PayPal, Stripe and many others do not allow CBD sales and will shut down your account and even hold your money for 180 days if you are busted. If you decide to work with other payment processing companies, some may try to take advantage of the situation and charge a high monthly fee and transaction fee.
The CBD Market Is Highly Competitive
CBD products are in high demand and it is obvious that many cannabidiol companies are fighting to earn a name in the industry. If you have to set up a CBD business and launch the products into a market this competitive, you would have to invest a large amount of capital and effort.
You should not just have profit motives in mind but should make your best efforts to deliver high-quality products to the users and gain their trust.
The Profits May Go Down In The Coming Years
Not all companies will be able to charge premium prices for CBD products because the commoditization of CBD will subject CBD prices to drop.
As more people have started showing interest in CBD hemp farming, there will be an abundance of CBD hemp that can be used to make a wide spectrum of CBD products. This will bring down the prices automatically like what happened in the case of medical marijuana.
You require a valid license to run a CBD business. The costs of getting the license and business permits for CBD distribution is quite high. Above all, there is no guarantee that your license application will get the approval of the government.
Before launching a CBD business, plan a failsafe strategy by addressing the challenges you can expect.