The cannabis industry has boomed in recent years, and an increasing amount of people are turning to cannabidiol (CBD) products to treat a variety of ailments and conditions. Forbes estimates that the industry as a whole will be worth an incredible $16 billion by 2025, so it’s no wonder that it seems as though almost everyone wants to jump on the bandwagon, whether that’s as a consumer, manufacturer, retailer, or wholesaler.
This article will focus on becoming a wholesale CBD company, which involves buying products directly from manufacturers and supplying them to distributors and retailers through business-to-business sales. Before you start, however, it’s crucial to understand the legality of the globally popular cannabinoid.
Is CBD Legal?
CBD’s legality is fairly complicated, which poses risks to a CBD wholesale supplier. After all, if your product is not legal, you’re going to face multiple challenges almost straight away, as well as the possibility of serious legal implications. It’s therefore vital to understand what’s legal and what’s not.
Although legalized in some states after a lengthy prohibition, marijuana and its extracts are illegal under US federal law. In fact, they’re classed as Schedule 1 substances, largely due to their levels of THC, the psychoactive cannabinoid. However, for the first time in a century, industrial hemp and its extracts, including hemp-derived CBD, are now legal across the US.
This is thanks to the 2018 Farm Bill, which legalized the cultivation, distribution, and sale of industrial hemp and its derivatives. However, it specifies that they are only legal if they contain less than 0.3% THC. Therefore, all CBD products have to be derived from hemp in order to be legal.
Another thing to note is that the US Food and Drug Administration (FDA) has not yet approved CBD, which means that it cannot be marketed as a health or dietary supplement. You must ensure that your website and the packaging of whichever products you sell clearly state the FDA’s stance, plus include advice of consulting a medical professional before consuming the product. You must also be careful to avoid making any direct medical claims regarding what CBD can do. For example, you can’t claim it “cures” depression.
Where Can I Buy CBD Products for My Wholesale Company?
As a CBD wholesale company, you’ll more than likely be buying products directly from a manufacturer. Therefore, your first step to becoming established in the market is to network and forge a beneficial relationship with a CBD manufacturer that will be able to supply your company with excellent products.
Before you make any commitment, however, you’ll have to decide whether the manufacturer is trustworthy and the products are high quality. Firstly, take a good look at its website and make a note of anything that seems unlikely or just too good to be true, as well as all the services that are on offer.
Next, arrange an appointment with a representative of the manufacturer – face to face is always preferable, but obviously not always possible. You can use this opportunity to ask about the services listed on the website and any questionable points that you made a note of.
If what the representative says doesn’t match up with the website, it’s a sign to look elsewhere. You should also ensure that the manufacturing processes are done on-site, rather than completely or partially handled by a third-party company that you know nothing about.
Often, having a wide range of high-quality products is a sign of a legitimate manufacturer. However, you should still check the extraction processes and manufacturing practices to ensure the quality of the end products. Third-party lab testing should always be conducted to ensure the absence of contaminants, and up-to-date certificates of analysis (COAs) should be available for you to view – don’t just take the representative’s word that they exist as final. Additionally, the manufacturer should be completely transparent about all the ingredients it uses.
Lastly, check that the end products that you’ll be purchasing are packaged well. For example, materials such as glass or plastic are best, and closures must be airtight. You don’t want to end up with packaging that breaks easily or doesn’t seal properly, which can ruin CBD products and lose you money.
Who Will Buy Wholesale CBD?
For the order and the price to qualify as wholesale, a high quantity of products must be purchased. Therefore, as a wholesale CBD company, you’ll be selling your products in bulk to multiple kinds of businesses that want to sell them to their consumers. These include online CBD retailers, health food stores, vape shops, herbalists, and CBD and marijuana dispensaries.
However, the possibilities don’t stop there – for example, with CBD becoming an increasingly popular ingredient in skincare products and routines, even some beauticians may want to stock your products. Again, you’ll have to network in order to build business relationships with the right retailers for your product.
Generally, they will either purchase white label CBD products to use under their own branding or already branded products to stock as necessary. This means that you’ll have to decide whether to sell white label or branded products.
White Label vs. Branded CBD Products
White label products are popular because they give a business the chance to build their own brand, even if it does not have the facilities or expertise to extract the CBD and manufacture the products itself. However, you need to ensure that the manufacturer has up-to-date COAs for chemical and microbiology testing so that you know you’re getting a high-quality product.
If you choose to buy and sell branded products, on the other hand, it’ll probably be because the brand is popular and likely to be bought by a range of businesses. After all, there’s little point buying products from an unreputable brand that you won’t be able to shift. Choose a company that can prove its products are of high quality with up-to-date COAs.
How Much Should Wholesale CBD Products Cost?
Across most industries, the general wholesale price of a product is between 50% and 60% of the full recommended retail price. However, the CBD industry is a little more complex.
Most CBD wholesale companies sell CBD isolate for around $3 to $10 per gram, depending on how much is ordered – and most have a 100-gram minimum purchase. However, it can be more expensive, with the varying price depending on the following factors:
- Where the hemp was grown and what cultivation practices were used – i.e., in the US, which has high cultivation standards, or countries such as China and India, which often do not.
- Whether third-party lab testing has been conducted and whether up-to-date COAs are available.
- The extraction technique used. Supercritical CO2 extraction is considered the “gold standard” in the industry, as it produces the cleanest extract. However, it’s expensive and raises the cost.
- The overall quality of the product.
Now, are you’re ready to start your own CBD wholesale company?
In short, becoming a CBD wholesaler isn’t a straightforward process – it requires good networking, research, and a lot of planning. However, once you’ve identified a good source and businesses that want to buy in bulk from you, plus considered the legality of buying and selling CBD, you’re well on your way. Good luck!