Once you’re ready to start your cbd oil business, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business – A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even
- Form a legal entity – Establishing a legal business entity prevents you from being personally liable if your cbd oil business is sued
- Register for taxes – You will need to register for a variety of state and federal taxes before you can open for business
- Open a business bank account – A dedicated checking account for your cbd oil business keeps your finances organized and makes your business appear more professional to your customers
- Set up business accounting – Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing
- Obtain necessary permits and licenses – Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down
- Get business insurance – Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state
- Define your brand – Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors
- Establish a web presence – A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers
As a result of legal gray area created by conflicting cannabis legislation, e-commerce payment gateways have decided to drop retailers they discover to be selling CBD products of any kind out of fear the products could be considered illegal.
The ramifications of financial institutions’ actions are profound for brands trying to sell CBD products online. They’ve experienced being kicked off several payment gateways and have had their bank accounts frozen and/or closed.
PayPal has emerged as an online payment solution for CBD brands.Last month, oral arguments were brought before the 9th U.S. Circuit Court of Appeals in San Francisco in a petition challenging the DEA’s rule determining that marijuana extracts are controlled substances.
Until a clear consensus on the legality of cannabidiol products is reached, many companies are changing the verbiage on their sites to stay away from the word CBD in an effort to avoid government scrutiny.
The Challenge for the CBD Industry in Using Cash because the bank industry is still so reluctant to join the marijuana commerce fray, it’s left CBD businesses to pay all their bills and make sales using cash. This isn’t an easy process when you have to pay employees this way considering it requires keeping cash on hand.
Having to store cash in a business is always a security risk since it could easily become lost or stolen. When cash flow is just as important to CBD sales as any other business, losing cash can become devastating. It’s required many in our industry to find creative ways to store money, sometimes meaning burying it to keep it safe.
Just a couple of years ago, 60% of all cannabis businesses didn’t have a bank account to do business. Is change coming in the coming year and beyond? The ramifications of financial institutions’ actions are profound for companies looking to sell CBD products online.