The regulatory patchwork for CBD commerce lacks consistent oversight. So smart shopping is a must, especially for medical patients.
The regulatory patchwork for CBD commerce lacks consistent oversight. So smart shopping is a must, especially for medical patients. Here are some tips to keep in mind when choosing CBD products.
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How to (Successfully) Sell CBD Online: A 2020 Seller’s Guide
Bethan Rose / 11 min read
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Within the next five years, the global hemp-derived CBD (referred to throughout as “CBD”) market is expected to bring in a colossal $20 billion, growing at a compound annual growth rate (CAGR) of 30.7% between now and 2024. As a naturally-occurring ingredient that boasts a plethora of reported uses in the medical, pharmaceutical and health/wellness industries, CBD can be integrated into just about every lifestyle.
In order to take advantage of this global movement, you need to know how to properly and legally market and sell your CBD products online. After all, competition is fierce, and with an increasing number of people choosing cannabis as a treatment for widespread illnesses, ailments and medical conditions, staying ahead of your competitors is key.
So, if you are contemplating ways to sell CBD online, keep reading.
Selling CBD online is perhaps the easiest way to market the popular product (note CBD is not legal in all 50 states), which can be transformed into a wide range of products, including:
- topical balms,
- and a whole lot more.
People aren’t hesitant to pay for CBD. Sales of CBD and hemp oil products in the U.S. reached $238 million in 2018 – that’s a 57% increase from the previous year.
While shoppers tend to purchase CBD more often in brick-and-mortar stores, the ease of shopping online is sure to increase the popularity of CBD ecommerce in the future.
Just like with any other online business, selling CBD oil and other CBD-infused products online presents a few obstacles that must be overcome prior to launching a website and kick-starting the marketing process.
What are those obstacles, you ask? From the legalities and rules that encapsulate the CBD industry to the keyword research, SEO-optimized content and link-building that is required to stand out in this already-saturated market, it is well worth brushing up on your knowledge.
A well-informed marketer can feel confident about embarking on a digital journey that is sure to be as lucrative as it is enjoyable, so allow some time to further enlighten yourself on the ins and outs of how to sell CBD online.
What is CBD?
Cannabidiol, widely known as CBD, is a popular natural substance reportedly used to help with a wide range of conditions — from the common cold to chronic pain. It is added into tinctures, edible foods like gummies, oils, and body products like balms and lotions.
Unlike THC (tetrahydrocannabinol), which is the primary mind-altering substance contained in cannabis, CBD is non-psychotropic.. The cannabinoid can be extracted from both the hemp and marijuana plants, with industrial hemp plants proving to be the most popular for CBD extraction.
Miraculously, the human body is equipped with something called an endocannabinoid system (ECS). This complex system produces its very own cannabinoids and is responsible for achieving homeostasis through the receiving and transmitting of signals sent by cannabinoids, like CBD. Cannabinoids work by binding with receptors scattered throughout the brain and immune system.
Numerous scientific studies have successfully demonstrated the way in which the ECS reacts when a dose of cannabinoids like CBD is administered. For example, this study published in the journal Neurotherapeutics suggests that CBD may actually inhibit or activate compounds found in the ECS.
A prime example of the way CBD may benefit the body is through stopping the absorption of anandamide. The plant may also trigger a number of other immune system responses, according to this study on The Profile of Immune Modulation by Cannabidiol (CBD).
Consumers Are Loving CBD
More consumers are trying CBD than ever before, but if you’re researching how to sell CBD online, chances are you already know this.
As of July 2019, 33 U.S. States and the District of Columbia have legalized cannabis in some form. Plus, with Canada having legalized the plant on a national scale under the ‘Cannabis Act’ (Bill C-45), North America’s cannabis consumer demographic is always increasing.
The North American cannabis market constituted 42.50% of global CBD market share in 2018. The global CBD market is forecasted to grow from $1,453.81 million in 2018 to $17,345.80 million by 2026; growing at a CAGR of 36.3% between 2019 and 2026.
Let’s take a look at some other reasons why Millennials, Baby Boomers, Gen X’ers and Gen Z’ers across the U.S. are much less reluctant to purchase CBD-containing products than they used to be:
1. Availability and diversity of CBD is attractive to buyers.
Based on a report by Rolling Stone, the CBD industry will reach $20 billion by 2020.
CBD’s diversity in application contributes to its significant valuation, not to mention the fact that it has made its way into the mainstream market. Hemp-derived CBD is a big one. From CBD-infused drinks to CBD-laced dog treats, hemp-derived CBD is fast-emerging as a multibillion dollar business opportunity.
Since 2014, worldwide cannabis industry sales have tripled. Over the course of the next five years, sales could quadruple. What is most interesting about this prediction is the fact that the projected future is non-inclusive of retail and pharmaceutical sales. Moreover, there are various types of CBD available to potential customers, including:
- cold-pressed hemp seed oil,
- purified isolate,
- full-spectrum CBD oil,
- broad-spectrum CBD, and
- Nano CBD.
2. Consumers have easier access to CBD.
One of the main motivators that encourages an increasing number of consumers to try CBD is the increased access to hemp-derived products following the passing of the Agriculture Improvement Act of 2018, A.K.A. the “2018 Farm Bill,” that removed hemp from the Controlled Substances Act.
A forcefield of unbiased research is solidifying CBD’s entry into the mainstream market and has even made it possible for patients in cannabis-friendly states to obtain plant-based medicines with a physician’s recommendation.
Hemp-derived CBD products were given a break when the 2018 Farm Bill amended the Controlled Substances Act to expressly exclude hemp, including all of its derivatives, extracts, and cannabinoids containing not more than 0.3%THC, from the definition of “marijuana”.
3. Negative stigma surrounding cannabis is dissipating.
Since the 2018 Farm Bill was signed, hemp production has ramped up and more companies have jumped on the CBD bandwagon. In order to properly understand how to sell CBD online without facing backlash from the long arm of the law, it’s up to you to stay updated with the latest news in both cannabis and hemp industries. This will open your eyes to the growth that is occurring in this ever-changing industry.
Cannabis legalization is favored by an increasing number of Americans:
- According to the 2018 Associated Press-NORC Center for Public Affairs Research and the General Social Survey, support for legal weed climbed from 57 percent in 2016 to 61 percent in 2018.
- From a political stance, the General Social Survey discovered that members of various political parties and people from all age groups favored legalization.
- Based on survey data published by the Associated Press in 2016, 45 percent of Republicans favored cannabis legalization, whereas in 2018, the percentage climbed to 54. The survey also revealed how 76 percent of Democrats now support legalization.
Understanding the Legal Status of CBD
Legality is obviously a big part of CBD marketing and failure to follow the rules could result in significant penalties. Classification of the cannabis plant as a Schedule I narcotic has hindered progress in the legal department. FDA regulations pose a concern for marketers and if you are hoping to start selling CBD online, you may be wondering what your options are in regards to advertising and marketing.
Let’s answer some questions that may be on your mind.
Is CBD Officially Legal Now?
The answer to this question totally depends on the state in which you reside, whether you want to start selling CBD online that has been extracted from the marijuana or hemp plant, and what products you intend to sell. Only hemp-derived CBD products may be sold online.
The passage of the 2018 Farm Bill did not alter or change the FDA’s authority to regulate food, drug, cosmetic, device, pet food, and dietary supplement products. Many states amended their state drug law to remove hemp from their state controlled substances act while adopting the FDA’s position on the sale of hemp-derived CBD products. Certain states prohibit the sale and consumption of CBD. Other states limit the types of CBD products that may be sold in state or require a specific license.
If you are selling, or planning to sell, CBD products online you must have systems in place to ensure that you are fully compliant with each state’s laws around CBD. Implementing product-based shipping restriction rules on your store will help you stay within safe shipping zones.
Can I Legally Sell CBD?
What is your purpose for selling CBD online? For most marketers, the purpose involves assisting consumers in treating some kind of ailment — however, it is essential that you refrain from making disease and health claims that cannot be backed up by reputable sources.
Since the federal government has not yet legalized marijuana and removed the plant from Schedule I of the Controlled Substances Act (CSA), research remains limited. Hemp-derived CBD-containing products, including any food, drug, device, or cosmetic marketed or sold in interstate commerce are subject to the Federal Food, Drug, and Cosmetic Act (FD&C Act) and must be labeled and marketed in accordance with the FD&C Act, as well as other relevant laws. There are different requirements under the FD&C Act depending on whether the hemp-derived CBD product is a food, cosmetic, device, or dietary supplement.
Regulatory clarity may not emerge for at least five years. However, soaring demand for CBD oil and other cannabis-containing products has prompted the FDA to assess options that will enable a resolution to be met in the near future.
Methods to Legally Selling CBD Online
Don’t fall into the trap of advertising CBD without understanding what the repercussions might be, should the platform on which you advertise not permit ads of this kind. A number of platforms are at your disposal, as well as a number of services that can be carried out by your team or outsourced as a means of saving time.
Let’s dive straight into the top methods for legally selling CBD online.
1. Focus on SEO.
Search engine optimization (SEO) is a tried-and-tested method of growing your online CBD business. Since the Internet’s very existence, brands have been enticing their target audience with SEO in mind. This organic method of traffic-building can help teach your audience about CBD, the properties it possesses and exactly how it can fit into their lifestyle.
Pay attention to the strategic keyword optimization you include in meta tags and content. Combined, on-page SEO, technical SEO and local SEO will help search engines (and customers) to find your website more easily.
Once you’ve set up a good SEO plan, elevated traffic levels will convert to leads, sales and a healthy profit. SEO can be integrated into website design, content, meta tags, titles and much more. With the correct usage of target keywords and phrases, users can find your website, blog or online CBD store with ease and swiftly determine whether or not the content on your site addresses their specific search query.
2. Grow content.
Successful SEO requires a content marketing strategy. After all, the content you post needs to be optimized for Google and other search engines to crawl your site and rank it accordingly. Setting up and updating a blog with regular content is a useful technique to driving traffic to your online store.
Since CBD advertising is not currently allowed on the major ad platforms, content creation will be your best friend at this time. Tell your audience everything they need to know about CBD, who is using it and why and how they can, too (just make sure to what you are saying is compliant with the law)!
Content marketing also helps your brand communicate its value proposition and overall messaging in a way that resonates with your target market. From “how-to” articles that educate consumers about how they can start integrating CBD into a daily routine, to studies and research pointing to the facts about CBD’s chemical compilation and potential uses, the content deliverable options are endless.
3. Attend CBD industry trade shows.
In-person marketing will always be a valuable tool in terms of CBD advertising and marketing. Broadening your reach and positioning yourself as an expert in the industry is entirely feasible after attending one or two trade shows. Examples of some well-known annual trade shows in the cannabis space include the NoCo Hemp Expo, CannaGrow Palm Springs and MJBizConINT’L.
These types of events are always happening and as you continuously build contacts in the CBD industry, you will begin to attract a larger market of which you can forge business relationships with, present your product to, increase brand awareness and educate. Most importantly, trade shows give you a chance to analyze competitors and bring something different to the table.
4. Establish a network of affiliates.
Did you know that approximately 15% of revenue poured into digital media advertising is spent on affiliate marketing? With a team of affiliate marketers working on your side, albeit behind the scenes, you can relax in the knowledge that your brand is being promoted on an ongoing basis.
Statistics show that affiliate programs generate 15%–30% of sales for marketers and advertisers. Among the hundreds of affiliate networks out there, some of the most well-respected include CANNAFFI, RevOffers and CJ Affiliate.
Affiliates receive a percentage of commission for every sale that is finalized as a result of their efforts. With over 50% of affiliate-referred traffic being sent through mobile devices, this tactic is highly valuable for marketers who are keen to sell CBD oil online.
5. Hire an influencer to market your product.
If you are active on social media, you have probably engaged with an influencer’s profile or sponsored posts. A whopping 61% of social media users claim that they interact with influencers on a daily basis, while 87% say they felt inspired to make a purchase after seeing an influencer promoting a product.
The influencer marketing industry is expected to be worth $5-10 billion by 2022. With an influencer’s help, you can drive high traffic to your online CBD ecommerce store. Establishing influencer partnerships will enable you to get your brand seen by a sizeable audience without being overly pushy. An influencer can simply post a picture of them holding or using your product and tag your page for phenomenal results. Of course, you will want to make sure any influencers you compensate comply with FTC guidelines regarding conspicuously disclosing their connection to your brand.
6. Use email marketing.
For anyone who wants to market a CBD brand or product online, it is imperative that the content is compliant with state and federal regulations. CBD advertising restrictions on social media platforms and search engines like Google mean that marketers must be extra careful about the claims they make and the way their content is displayed. Moreover, paying to advertise CBD on social media may be challenging. This has pushed many CBD marketers in the direction of email marketing, which is a safer and more effective route to go down.
Statistics show that as many as 59% of B2B marketers believe email to be their most effective form of lead and revenue generation. Plus, 80% of retail professionals claim that email marketing aids them with customer retention better than any other form of marketing. Offer rewards to your customers through email marketing by presenting them with opportunities to sign up for your weekly newsletter and redeem coupons, discounts and deals that are not to be missed.
This email from CW Hemp prompts users to sign up for their autoship program. Image via Mailcharts.
Try playing around with the subject lines, as well — a report by Experian suggested 56 percent of brands that used emojis in the subject line of their email had a significantly higher open rate.
Although email marketing is a less risky alternative to advertising CBD on Facebook, Twitter or Google Ads, marketers must still abide by state and federal rules when executing an email marketing campaign. Refrain from sending out emails or marketing that claim CBD is a “cure-all” product. Making health claims presents a risk that the FDA will find your product to be an unapproved drug.
7. Attract ongoing traffic with keyword research and link building.
To ensure the content on your website matches the keywords and queries typed into search engines by customers, keyword research is absolutely imperative. Including inbound and outbound links to authority sites in your content (e.g. on your website pages and blog) will act as the building blocks of a successful CBD marketing campaign. Consider submitting your content to online article directories for amplified traffic levels and visibility in the online world.
8. Monitor progress with analytics and metrics tools.
Analytics and metrics are a critical facet of any online business. Measuring the performance of your CBD-focused campaign with quantifiable measure indicator tools will aid you in your quest to assess what works, what doesn’t and what areas of your advertising strategy need tweaking. Tools like Google Analytics make this possible by analyzing the source of all Internet traffic directed to your website. By understanding where the vast majority of your traffic comes from, you can adjust a marketing campaign to ensure web visitors keep flooding in.
7. Determine your payment provider.
Once again, federal restrictions on cannabis make it tricky to collect payment for CBD products, due to the fact that cannabis banking services are not yet available. Payment processing merchants like PayPal and Stripe have not yet made it possible for merchants to utilize their services for the sale of CBD-containing products. Since popular payment processing merchants depend on the big banks to do business, products with varying legal status’ are currently not permitted.
High-risk processors are an alternative choice. These payment processors can do the job, but will take a bigger percentage of your sales in return. Fortunately, support for the SAFE Banking Act is growing; a bill that would safeguard licensed and regulated businesses by providing them with access to the banking industry.
Selling CBD Online with BigCommerce
CBD brands and suppliers are putting their confidence in BigCommerce to properly market their product and reach a wide audience, so why not do the same? Our platform is SaaS (Software as a Service) and it merges everything you need to run an online store. You won’t need to worry about arranging payments and best of all, you can customize your very own CBD store.
BigCommerce takes out the guesswork through combining everything you might need for an online business to thrive, from the branding and design aspect to marketing and optimization. We provide payment gateways for simple online transactions, outstanding support and a mobile-friendly design. What’s more, the BigCommerce platform allows CBD marketers to easily manage returns when selling their product, which can be featured on numerous websites.
“BigCommerce by far has the best solution for selling CBD products online. Their platform, coupled with our FDA compliance solutions for regulated products has proven to be a success for dozens of Vaping websites and has in-turn attracted numerous CBD companies to the platform. Simply put, BigCommerce is light years ahead of other platforms when it comes to preparing you with everything you need to sell CBD online.” – Brian Antczak, CEO – IntuitSolutions
Approximately 64 million Americans admitted to trying CBD in the past two years. Statistics like this, combined with the fact that legalization is spreading further across the U.S. map, means that brands can tap into a huge target market when they start selling CBD online.
To find success with selling CBD online, you will need to stay current with industry updates and news – like the legalities of CBD and marketing.
Your level of industry knowledge will have a direct impact on how successful you are with CBD marketing – as you’ll need to make sure you stay compliant since CBD products are still very tightly regulated by the FDA.
So, what are you waiting for? Start designing your online CBD store with BigCommerce today and avoid all obstacles!
This material does not constitute legal, professional or financial advice and BigCommerce disclaims any liability with respect to this material. Please consult your attorney or professional advisor on specific legal, professional or financial matters.
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Sales of CBD and hemp oil products in the U.S. reached $238 million in 2018. Learn how your business can navigate this niche and start selling CBD online.