So you want to start a Hemp Oil business? That’s not surprising as the global Hemp Oil market is set to be worth $ 89bn by 2026. With a cluster of dedicated consumers too especially in the UK where four to six million people have tried Hemp-derived CBD in 2019; the customer base is huge. Add the support for medical cannabis and appreciation for Hemp as an ingredient; the CBD Oil UK market is predicted to grow to $1bn. This would be equal to the entire UK herbal supplement market as a whole.
So the market is definitely there and any budding entrepreneur should want to become an established connoisseur of the green. However, this guest post seeks to make clear the trials and tribulations ahead for small business owners looking to root themselves in this exciting industry.
From murky legal issues, “cowboy sellers”, the effects of coronavirus, and misconceptions of Hemp around the world, one must plan accordingly before maneuvering the wild west of the Hemp market. Hopefully, when you’re aware of these five crucial points you will be better suited to take the reigns.
The actual definition of Hemp Oil
Before one even dips their toes into sourcing any type of Hemp product they must be aware of what exactly Hemp Oil is. Hemp Oil is a derivative of the Hemp plant. Placing Hemp between two centrifuges that clamp together under immense pressure is the cleanest way to extract Hemp Oil.
Hemp Oil contains varying degrees of cannabinoids. These cannabinoids most famously CBD are the selling point of a Hemp based product. The presence of all cannabinoids including CBD, CBDa, CBG, CBGa, and CBC in Hemp Oil allows you to define it as Full Spectrum Hemp Oil.
However where things get tricky is the content of THC in Hemp Oil, as this defines what’s legal. For instance, in the US only 0.3% THC is allowed in the final product (0.2% in the UK). Therefore any legal Hemp Oil you source from manufacturers must be within these thresholds.
This is because 0.3% THC and under is what constitutes as a
non-psychoactive amount. This is what differentiates Hemp Oil from saying cannabis oil, that’s sourced from Marijuana plants. The latter contains a mass of THC used for recreational purposes. Subsequently knowing what you need to source, and how it’s made up is crucial to providing 100% legal Hemp Oil when you start your business.
Lab reports
Now that you know what Hemp Oil is and the compounds in it, proving you actually have the genuine stuff is paramount to gaining customer trust. This has increasingly become a necessity in recent
times as it’s now the law to openly publish accurate lab reports. This is because so-called “cowboy sellers” who shortcut expensive lab reports have given a bad name to all in the industry.
For instance, UK newspapers reported on illegal Hemp Oil sold in major retailers where THC four times the legal limit was being sold on shelves. Furthermore, the inconsistent lab reports masked the actual cannabinoid make up of certain Hemp Oil brands.
Therefore one must choose a Hemp Oil supplier who provides a breakdown of the legal contents of their produce. You must also make sure you get your own lab reports published (via your chosen manufacturer) so you don’t look like a “cowboy seller” especially when starting out, as reputation management is everything in the supplement game.
Marketing constrictions of CBD
After successfully sourcing the right products from the right supplier the next step is promoting your Hemp Oil brand.
This is easier said than done as Google places a number of hurdles for CBD companies. Firstly Google Ads is out of the question as Google allocates Hemp-derived CBD under its list of unapproved pharmaceuticals and supplements. This is due to murky legal issues in the US where the DEA has an outdated stance on CBD as a controlled substance. Ironic considering the 2018 Farm Bill lifted the federal ban on industrial Hemp supplying and growing.
Facebook has a similar policy, as the company doesn’t allow the sale of non-medicinal drugs. Amazon technically doesn’t allow Hemp-derived CBD but this hasn’t stopped dubious vendors labeling their products as fully-fledged Hemp Oil, when in fact their ingredients show its hemp seed oil. This is different from oil sourced from the whole Hemp plant and is another example of cowboy selling.
This leaves organic SEO as the only method of getting your brand out there on the Internet. But there are added boundaries to what you can say about your product when employing SEO tactics. For instance, one reigning keyword phrase for CBD is “benefits of CBD oil”.
However, when embedding this keyword on your site stating benefits akin to relieving anxiety, stress, or boosting the immune system are outlawed. The FSA (Food Standards Agency) in the UK states these claims are merely a hypothesis.
This is true as the only credible “benefits of CBD oil” are supporting your Endo-cannabinoid system to support or maintain your body is doing its jobs better. Therefore it’s important to be aware of how you can market your CBD products online to avoid risking Google penalties or certain control bodies coming down on you hard for making unsubstantiated claims.
Product labeling
The limitations to online marketing extend to what you can state on your product labels too. Claiming any therapeutic benefits is illegal,
especially in Europe. In fact, most EU countries require Hemp Oil vendors to mention that their product is not intended to prevent, treat, or cure any disease. This resorts you to explain your CBD products as just supporting health and wellbeing as a whole.
This is crucial to note, as after attaining the above prerequisites, to have your products taken off shelves due to crazy claims is a hit for any entrepreneur.
The impact of coronavirus
Global Hemp supply and diminishing demand for nonessential items during coronavirus can hurt the success rate of new Hemp Oil businesses. However, the “lipstick effect” whereby consumers still spend money on small luxuries may keep up sales of Hemp Oil. For example, mass isolation measures have spurred a trend in self-care
and pampering for those indoors all day. How convenient as this is already one of the many uses of Hemp Oil!
On the other hand, the supply chain is being wrecked as farmers have less demand for their hemp. Manufacturers are ordering fewer raw materials ahead of predicted falling consumer demand during the pandemic. Therefore be prepared for US Hemp manufacturers to increase their prices if sourcing from this area.
But one still can’t be 100% sure of how coronavirus will affect the global Hemp market as the Department of Homeland Security has included Hemp in the sixteen essential industries that are to continue operations. This shows the US expects the demand for Hemp to generally sustain during coronavirus.
On another note, the exit of some Chinese Hemp companies from the scene due to being at the epicenter of the outbreak could be an opportunity for alternate Western vendors to fill the gap with higher quality, more expensive goods.
Subsequently, you would be well served in planting the seeds of your Hemp Oil business now because whether or not coronavirus measures will sustain; the Hemp Oil industry will still be on the up.
So is it still worth it?
Yes, there’s too much to lose in not getting involved in the global Hemp Oil industry. You can take advantage of the expected market growth this decade and dedicated customer base if you take heed of the five points mentioned in this article. Those are making sure you know exactly what stock you’re buying with a clear understanding of the definition of legal Hemp Oil, acquiring top-notch lab reports for credibility, taking note of the marketing and labeling constraints and taking the plunge during coronavirus, whose effects on the business world won’t significantly encroach on the Hemp industry.
Why should you listen to us? Well, we successfully started our own Hemp Oil company called All Round CBD by being aware of the points in this article. We, therefore, seek to further help other entrepreneurs in this area by identifying the pitfalls and giving tips on building the foundations of a successful small Hemp business.
The article was written by Shyam Kotecha