Tips to Start a CBD business in CA
CBD is a rapidly-growing industry in California and across the country. Regulations and state laws are making it easier by the day to enter into the industry, removing regulatory and legal hurdles from selling products locally and, depending on the product, across state lines. Starting a CBD business carries its share of complexities and hurdles. Below, our experienced California cannabis business lawyer offers some tips for entrepreneurs looking to start a CBD business in California.
Do Your Homework
The first step toward establishing your CBD business is to do your research and fully understand the product. Even a simple Google search is a fine place to start. Learn about CBD, its history, the extraction process, its various uses, the types of products that have incorporated or could utilize CBD, etc. Talk to experts in the field. Talk to leaders of other CBD companies about their product, their experiences, and what has worked for them. You should have a deep, thorough understanding of CBD and the market before you start looking for suppliers and building your business.
Hemp or Cannabis?
CBD is found in both hemp and cannabis products. CBD oil can be extracted from either plant in order to make CBD oil products. Industrial hemp and cannabis are really the same family of plants, legally distinct based on the concentration of THC present. However, there are important differences between the two. Most immediately, cannabis remains illegal under federal law while hemp is legal. Even if you are starting a business in California, where the use, manufacturer, and sale of cannabis is legal, dealing in cannabis is still likely to involve significantly more legal and financial hurdles.
If you are sourcing CBD oil for your product, or you plan to produce your own, you will need to make a decision about whether to work with cannabis, hemp, or both. Cannabis may soon be decriminalized under federal law, rendering the choice less significant, but until Congress acts there are still consequences to working with cannabis products.
Know Your Legal and Regulatory Obligations
When starting any business, it is important to have at least a general knowledge of the state and federal regulatory landscape. With the ever-evolving regulatory landscape around cannabis and CBD, it is even more important. While you can (and should) rely on your lawyers to help with licensing and compliance, it is nevertheless important to understand your obligations as a business owner and operator.
Know which agencies issue licenses and which licenses you will need to obtain. Know which type of products are legal both under California state and federal law to sell infused with CBD. There may be certain types of food products that are illegal under federal law to sell infused with CBD due to FDA regulations or other laws. Even if you can sell certain products, it’s important to know what kind of packaging is appropriate, including warning labels and the type of claims you are allowed to make about the efficacy and effects of your CBD-infused products. Your CBD and cannabis business lawyers can walk you through your obligations, which should be incorporated into any product you design and market.
Create a Marketing Plan
It is important to do market research about how best to advertise and sell your products. You will need a marketing campaign, and you will need to decide the format of your business–likely some combination of e-commerce and brick & mortar. As mentioned above, it’s vitally important to know your legal obligations and regulatory limitations when designing your marketing materials so as not to run afoul of state or federal law.
Get Trusted Advice and Representation from a California CBD and Cannabis Business Lawyer
If you are interested in setting up a CBD business or are dealing with regulatory, tax, licensing, or other legal issues with your CBD or cannabis business in Los Angeles or Southern California, call McReynolds Vardanyan, LLP, in Glendale at 818-855-2115. Our California CBD business lawyers will work with you to get your budding business off the ground efficiently, effectively, and legally.