With the 2018 legalization of hemp by Congress, CBD oil has emerged as one of the hottest new products on the market. The medical community has proven some of its health benefit claims while it continues to research others. Consumers have found relief for a variety of ailments and conditions.
Companies offering the product face more challenges than most businesses. Although the introduction of specific cannabis industry software has helped to lighten some burdens, others can slow down the growth or even the establishment of your business.
Create a Sound Business Plan
The first step for any business lies in creating an effective and reasonable business plan. This establishes a step by step outline of how to handle the business establishment, marketing, supply sourcing, paperwork, and other obligations.
Those inexperienced in business can find help. Cannabis and hemp advocacy groups can recommend advisors specializing in the field. Many city or county governments, as well as state departments of commerce and agriculture promotion agencies, have development offices who can help steer new businesses through many challenges by helping them to compose a plan.
Uncertain State and Federal Regulatory Environment
Although federal law legalized the production and sale of hemp-derived products, the future of the industry still remains uncertain. The laws that legalized CBD and other products placed the responsibility for regulation on the Food and Drug Administration. Officials there have not yet produced a final slate of rules.
State law differences also create issues for those seeking to establish interstate operations. Furthermore, the fluid regulatory environment means that what the law allows today could be illegal next year. This will have a dampening effect on business development in some areas.
Uneven State Level Protections For Those Providing Capital
Access to capital serves as one of the most significant challenges to the growth of a CBD business. Some states have moved forward aggressively to establish a sound legal environment. Others have ignored the issue completely. Most stumble along, having to overcome obstacles of perception and inertia.
For example, although the West Virginia State Legislature passed bills in successive sessions to protect hemp-based and medical cannabis industries, as well as capital suppliers, the State Treasurer’s office slow-walked implementation of the laws for well over a year.
This took place even as the State Agriculture Commissioner promoted the potential of hemp and CBD oil regularly.
West Virginia’s frustrations reflect the slow pace of reform in many state and local jurisdictions. This also frustrates business owners and farmers looking to establish sound businesses to provide for the industry.
Fast Growing Competitive Environment
Despite the challenges, many businesses have raced into the field.
Some say that this could create an “overheated” marketplace with too many contenders. Like any other business in a similarly highly competitive field, successful businesses adopt a few key practices to thrive.
The key lies in establishing a competitive advantage over others. Businesses achieve this through location, innovation, diversification, marketing, and pricing. Running your business properly from the start is also vital. Investing in the right equipment is an important part of creating a solid foundation. Using advanced technology, such as cannabis industry software, saves time, money, and adds to your advantage.
Maintaining a disciplined operation requires good fiscal management and continual reinvestment of some profits into improving the operation.
In some way, a successful business must elevate itself above competitors to ensure a strong share of the market.
While the market may grow quickly enough in the short term to accommodate all, eventually your business will need to compete with others successfully.
Work with business coaches, consultants, and other business owners willing to offer good advice.