Selling CBD Wholesale: CBD Distributor Opportunities & Getting Into the CBD Business
The option to sell hemp-derived CBD wholesale is an appealing one; cannabidiol is high in demand and retailers are catching on.
Legal global sales of cannabidiol, or CBD, skyrocketed between 2014–2018, climbing from $3.4 billion to $11 billion during the four-year period.
In March, CVS Health revealed its plans to stock CBD topical products in 800 stores spread across eight U.S. states. Shortly after, Walgreens Boots Alliance announced it would also start carrying CBD topicals in 1,500 stores. Some other big-name retailers jumping on the bandwagon include drugstore chain Rite Aid and America’s largest supermarket chain by revenue, Kroger.
According to a new Gallup poll, one in seven Americans are CBD consumers. With so many product options on offer, such as tinctures, vape oils, topical salves, and more, being a CBD reseller has potential to be a profitable venture.
Brightfield Group analysts recently predicted that year-over-year CBD sales in the United States will soar 706% this year to approximately $5 billion. Thanks to the rise of CBD wholesale companies marketing CBD products online, sales are forecasted to top $23.7 billion by 2023.
If we compare these figures to the amount of CBD sales recorded in 2018 — around $620 million — it is clear that the market is on a steep incline. This means that the industry grew at a compound annual growth rate (CAGR) of 107%!
As the CBD market continues to flourish, so too do the opportunities for sellers. Enter selling hemp-derived CBD wholesale.
What is CBD Wholesaling?
If you are wondering how to get into the CBD business, why not sell hemp-derived CBD wholesale? Companies that specialize in this segment of sales will deal primarily with bulk orders — typically for brick-and-mortar or online stores.
Hemp-derived CBD distributor opportunities are also abundant, and you won’t be limited to just oils. Working as the middleman means that you can choose the specific type of product you wish to sell.
While the growers and suppliers focus on getting the product ready for the customer, CBD wholesale businesses sell to various retailers and outlets for onward sale. Wholesalers can avoid the time and costs associated with preparing the goods for sale to the end-customer; they simply sell CBD in bulk for a lower unit price to the retailer.
Before You Start: The CBD Wholesale Checklist
When the 2018 Farm Bill federally legalized industrial hemp production across the U.S., more people became curious about how to get into the hemp-derived CBD business. After all, the bill established the foundation for the production and sale of CBD products made from industrial hemp.
Under the Farm Bill, hemp must contain no more than 0.3% of the psychoactive cannabinoid THC (tetrahydrocannabinol), as measured on a dry-weight basis.
With this in mind, there are a few other things to tick off your checklist:
1. Do you have a quality supplier?
If you cannot trust that the supplier manufactures high-quality, uncontaminated hemp-derived CBD, don’t expect to have an easy time selling it. Quality suppliers will source their hemp inputs from farmers that cultivate hemp in accordance with the highest cultivation standards.
Find out if your supplier uses pesticides and chemical fertilizers; they may help to yield bountiful crops, but consumers could be harmed if they use products containing these chemicals. For seeds, inquire about the THC to CBD ratios before buying and seek out a quality breeder with a solid reputation in cultivating CBD-rich hemp strains.
2. Is your supplier legally licensed to manufacture and sell CBD?
And is the hemp material used to make the CBD sourced from a licensed farmer?
Anyone who is keen to learn how to get into the CBD business shouldn’t sidestep this point. This is a question you simply must ask and verify before buying CBD products to sell wholesale. If the CBD was not lawfully sourced from a properly licensed manufacturer using lawfully sourced hemp, you could be purchasing, distributing, and selling at wholesale an unlawful product. This could expose your business, your investors, your employees, and even your customers to a host of regulatory and legal violations — some of which could include criminal sanctions.
3. Does your supplier use third-party testing?
When you are on the hunt for hemp-derived CBD distribution opportunities, pay attention to third-party testing. Request to see lab test results for each production batch of CBD and observe the levels of cannabinoids and terpenes (biological compounds in the plant that can have unique properties by strain) contained in the CBD product.
Failure to do so means you have no idea exactly what it is you are selling, creating a major risk for your business — the CBD products you resell may contain too much THC and too little CBD, making your products unlawful under the Farm Bill and state law. Also, the labels may be incorrect and misleading; the products might be laden with traces of solvents, pesticides and/or metals exposing the end-consumer to health risks; or the products may not be up to the specifications of your business or retailers, making the products unusable.
Additionally, sophisticated retailers will almost always request batch-specific testing information. Without testing results, you are significantly limiting your market opportunities.
4. How long has your supplier been in business?
Aim to find well-established CBD suppliers with a proven track record. New suppliers should not necessarily be avoided, but perform some research prior to buying anything from them. Consider how many sales they have made, what their target market is and, of course, what the customers have to say about their business.
5. Do you have a plan to penetrate the CBD wholesale market?
If you are to stand out among the ocean of hemp-derived CBD wholesale sellers, you must prove it.
Demonstrating how your company can simplify the process of obtaining lawfully sourced, high-quality CBD will give you an opportunity to stand out. Prove how you can provide access to markets.
Remember to track precisely where your hemp-derived CBD products are being distributed. This is essential, among other things, because some states continue to prohibit the possession and sale of CBD products.
Your company and its stakeholders may also be slapped with criminal sanctions if you fail to monitor distribution, so keep this in mind if you want to penetrate the market on a large scale.
6. How is your CBD better?
A CBD wholesale company that carries the best brands is sure to stand out over one that stocks unknown or less favored brands. Quality CBD products will be produced using high-quality industrial hemp manufactured inside a facility that is FDA-registered and CGMP Certified. If your CBD has been produced and tested by industry experts, doctors, and scientists — even better.
7. Do you have hemp-specific licenses/qualifications?
Some states require a hemp handler’s license in order to possess or distribute hemp and/or hemp products. Other states may require a special hemp processor license. Some states may also regulate CBD under their existing food safety laws, which requires that facilities where hemp products, including CBD, are produced, stored, and distributed from be registered with the state’s department of health and operate in compliance with food safety laws and regulations.
Finding the Right Supplier(s)
Perhaps the most crucial step to succeeding with selling CBD wholesale is finding a dependable supplier. Avoid selling something that you would not necessarily consider trying yourself. Low-quality products will reflect poorly on you as the wholesaler, so don’t cut corners to save yourself money.
A trusted supplier should be certified by the U.S. Hemp Authority program. Additionally, a CBD supplier should be compliant with regulations laid out by the Food and Drug Administration (FDA).
Here are some other things to look out for when seeking out CBD product opportunities:
1. Look at third-party testing results.
Before you start to sell CBD wholesale, take it upon yourself to ask the supplier for proof that their product is safe for human use and/or consumption. Microbial contamination is common in hemp plants. Contaminated products may cause human toxicity and unwanted pharmacologic effects.
Confirming a product’s reliability and potency is dependent, in part, on the results gleaned from third-party CBD testing.
2. Try some of the product yourself.
If you know how well a hemp-derived CBD product works, you can feel confident about buying and reselling it. Make a note of what each product looks, tastes, and smells like; how it made you feel; whether or not you experienced any side effects; how the product was packaged and branded, etc.
It’s worth asking a supplier for some free samples as a means of determining its suitability for CBD wholesale reselling.
3. Test against other products.
During the testing phase, compare products side-by-side for an accurate insight into which brands are worth buying from. Make sure the products contain the same level of CBD, so as to draw up the most precise judgement on its potential. Keep a note of each brand’s pros and cons before coming to a conclusion.
4. Visit the manufacturing facility.
Once you have narrowed down your options to just a handful — after testing several hemp-derived CBD products against each other — arrange a trip to the supplier’s cultivation and/or manufacturing facility. This will grant you an inside look at processes of that particular brand and how safely they conduct business in accordance with applicable laws.
Example CBD Suppliers
Learning how to get into the CBD business demands a certain level of knowledge on the best suppliers. Allocating time to finding one you want to work with is not always possible with so many other tasks to accomplish while setting up a wholesale CBD company.
On that note, we have highlighted some CBD suppliers online and some of the advantages to each.
Since its inception in 2015, CBDistillery has gained a solid reputation as a trustworthy partner of thousands of nationwide retailers. All products supplied by the company are tested by third-party laboratories and packaged with clear labeling. Examples of the retailers CBDistillery partners with include convenience stores, independent pharmacies, medical/healthcare offices, and wellness centers.
2. Global Cannabinoids
A number one producer, manufacturer, and distributor of American-cultivated, hemp-derived CBD, Global Cannabinoids was also established in 2015. Specializing in bulk and wholesale CBD, the company’s product range includes CBD coffee, water-soluble nano CBD, pure hemp oils, CBD-infused bath bombs, CBD-rich full-spectrum tinctures, and CBD soft gels, to name a few.
Another company worth consulting for wholesale CBD oil opportunities is HempMeds. The company produces Real Scientific Hemp Oil™ using hemp cultivated on a fifth generation hemp farm in the Netherlands. Triple lab tested hemp is derived from hemp seeds certified with the Organization for Economic Co-operation and Development (OECD).
This CBD supplier describes itself as “the Innovation leader in the CBD Industry.” By utilizing a TruSpeKtrum technology platform process, Kazmira prides itself on eliminating traces of THC, chlorophyll, and plant wax from its products. Trace cannabinoids like Cannabigerol (CBG), Cannabichromene (CBC), and Cannabinol (CBN) are also eradicated from Kazmira’s THC-free CBD.
Finding Your Retailer Niche
Just like any other industry, one of the most important metrics to consider when getting involved with CBD wholesale centers around points of distribution is how many different retailers stock the product.
Various business-to-consumer (B2C) retailers concentrate on CBD products. Tapping into the potential of their resources will ensure that your inventory is always in high demand.
The following B2C retailers have a targeted customer base and will be on the lookout for CBD wholesale specialists when they need to replenish stock.
1. Head shops.
Head shops are rooted in cannabis culture, sprouting from the hippie scene in the late 1960s. Retail outlets of this kind specialize in pot paraphernalia specifically designed for social consumption.
Advantages: These types of retail stores are worth contacting if you are selling wholesale CBD products online. Scattered around most large cities, head shops boast existing clientele and a loyal local customer base.
Challenges: Head shops are preferred by adult-use cannabis consumers. This means that CBD consumers may stray from them. Some head shops may also struggle to compete on quality with other retail outlets.
2. Online retailers.
The number of online shoppers is predicted to reach two billion this year, with the figure anticipated to top 2.14 billion by the year 2021. With so many people buying products digitally, it would be a shame not to tap into the potential of online retailers.
Advantages: Online retailers demand far less infrastructure than brick-and-mortar stores. Plus, considering there are 4.39 billion internet users as of 2019, the customer reach is far larger than any other options.
Challenges: Due to high demand from customers, online retailers can be difficult to get in touch with. Moreover, online markets are fairly saturated.
3. Specialty brick-and-mortar shops.
Specialty stores cater to a particular retail market. A few prime examples of specialty brick-and-mortar businesses that would welcome CBD products include vape shops, smoke shops, health/wellness stores, and nutrition stores.
Advantages: You can find these types of stores peppered around most cities and states, making them easy to track down and get in touch with. With their local feel and the fact that they only carry specific products of quality, they tend to have a loyal customer base.
Challenges: Much like dispensaries, specialty brick-and-mortars will be overly scrutinizing what they sell. This means that you’ll need to choose the highest quality products if you want to sell CBD wholesale to this type of retail outlet. Prices tend to be higher than in head shops or dispensaries, so you’ll need higher margins to stay in business.
Picking CBD Products to Sell
Choose the specific products you want to sell CBD wholesale based on the target market you intend to capture. Are you hoping to attract the attention of wellness-focused consumers, or people who are looking to try CBD for the first time?
Alternatively, you may want to sell CBD wholesale to retailers with consumers interested in using this non-psychoactive cannabinoid for skin care. Whatever the reason, make sure your chosen audience is likely to visit the specific outlet(s) where you distribute products.
Below, we highlight the main areas of interest for CBD consumers. Please note that the FDA’s position is that it is unlawful under federal law to add CBD to food products, including tinctures, edible products, and beverages.
1. Oils and tinctures.
By 2023, the global CBD oil market is expected to turn over USD $23.7 billion. Oils — which can be administered in the form of a tincture — are discreet and convenient.
2. Edibles and gummies.
Although edibles and gummies may take longer to kick in, the effects are often longer-lasting. The diversity that comes with consuming edibles, such as the endless flavor options, has contributed to growth in this segment of the CBD market. This year, projections for the CBD-infused edible market are $4.1 billion by 2022.
Drinks are another segment of the CBD market where you can potentially profit. Scientists and product developers have mastered a way to infuse CBD into water, and there are even dissolvable CBD powders available!
Industry analysts say this is one of the fastest-growing areas of CBD retail; between 2018 and 2023, the CBD beverages market will grow at a compound annual growth rate (CAGR) of 74.7%.
4. Topicals and skin care.
Topical and cosmetic CBD products are increasingly available and are often the preferred product type for large national retail chains.
A report released in August 2019 from Grand View Research, Inc. suggests that the value of the global CBD skin care market will surge to $1.7 billion by 2025.
In spite of the recent issues around contaminated vape products, this market is booming. Vaporizing CBD oil delivers a wallop of cannabinoid-richness to the lungs, and the effects surface almost instantly.
CBD-filled capsules and supplements can be taken on the move, in the privacy of one’s own home, or even just before hitting the gym. This segment of the market falls into health and wellness.
Keep in mind that the FDA’s position is that it is unlawful under federal law to market CBD as or in a dietary supplement.
Building a Website to Fit Your CBD Narrative
If a retailer is going to buy wholesale hemp-derived CBD from you, they need to know you’re serious about what you do. In the same way that customers seek out trustworthy sellers online, a retailer will first assess your services based on how you appear online.
Without a website, standing out from the crowd will be nearly impossible. Plus, when you consider the fact that 72% of ecommerce will occur on a mobile device by 2021, you simply must have a mobile-friendly website if you are to attract the right clientele.
As noted by the FDA, making health claims about CBD is not permitted. On that note, let’s find out what else is required to attract CBD wholesale buyers.
1. Make it beautiful and easy to read.
Putting a little bit of effort into the way your CBD wholesale website appears from a retailer’s perspective will go a long way. A well-designed website that contains all of the necessary information will reflect on your professionalism.
Thankfully, BigCommerce makes it easy. With a broad spectrum of visually stunning designs and themes to choose from on our platform, you can deliver a personalized experience and bolster the chances of converting leads into sales.