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How to Launch a CBD Business in 2021

By Resources

Is it too late to launch a CBD business in the US?

Consumer interest in CBD products has been on a steady rise since 2016, and in response, the offer has gradually increased contributing to the availability of CBD products over the last years, up to the point in which it seems to be that the CBD market has exploded.

Currently, CBD is considered a New Dietary Ingredient (NDI), and the review process is slow for NDI notifications. This gray area and complicated legal status have led to a complete lack of oversight. This situation allowed all sorts of disreputable CBD brands to open shop, but they will not last. 

That’s why we can confidently say that it’s not too late if you are committed to developing a trustworthy, high-quality CBD brand.

1.Understanding the Law

 Understanding the Law and Comply with the Laws and Regulations Regarding CBD Business should always come first,

In the States, the federal government considers hemp-extracted CBD products as legal, which are made from industrial hemp. CBD Products are considered legal to sell as long as it’s active THC level doesn’t cross the authorized threshold of 0.3%. In Europe, this percentage should not be higher than 0.2%, although the European Parliament has voted to meet US regulations.

Checking on your State/Country legislation before entering the business is crucial reports like the one from The World Law Group can keep you up to date on where do Countries stan when it come to these type of regulations.

Business Documents

To sell CBD online you will need to obtain two types of licenses:

  1. A regular business license: get incorporated and register a business with your state to start operations. Also, request an EIN/TIN for your newly created company from the IRS.
  2. A Reseller license: If you plan to purchase CBD from wholesalers, you may also need to get a Reseller’s license (certificate) from your state. This document is hugely important because it allows you to buy products wholesale without paying sales tax. The license also lets you collect sales tax from your customers afterward.

2.Understanding your market

CBD consumers are far from the cannabis consumer stereotype, even recreational cannabis consumers are far from the cannabis consumer stereotype. So you need to pay attention to your real market. CBD enthusiasts are looking for new ways to boost their cognitive function, tackle a particular health-related issue, or simply feel more relaxed.

According to the Brightfield Group, CBD is used by all age groups but is most popular among the young. CBD use is distributed relatively amongst various income groups. Americans are very familiar with CBD, although the overall percentage of people who have tried it is relatively small (17%), a percentage that reinforces our statement that there is still a huge space for market growth.

People seek this product mainly because preliminary clinical research has shown that CBD has anti-inflammatory properties, helps to reduce anxiety and stress (minus the high), improves the quality of sleep, and boosts cognition.

3. Selecting the Products

The list of products you could include in your brand portfolio is wide, in the next CBD Preferred Productsimage you can see the popularity of the different CBD products available in the market. If you match this information with your preferred market niche you might have a clear path forward.

There are different ways to deliver consumer-facing products, you could get in touch with a white label type of company, or you could use the dropshipping business in which you don’t even need to touch the product, or you could manufacture the product yourself buying active components as Isolates or Distillates and bringing them into your production line. Each one of the prior options has its pros and cons depending on your specific situation.

Dropshipping, White Label, or Manufacturer?

If you are within the States, already have a great network, a defined niche, and great marketing skills, then Dropshipping or White Label might be the right choice for you. Shipping within the states simply works, Hemp farmers are federally regulated and prices within the States are very competitive.

If on the other hand, you are outside of the States, then probably the best option is to purchase directly the Isolates or Distillates at a very competitive price from the States and include them into your production line as it own CBD line of product, that way you will avoid all the Customs hassle and gain much more control over the production.

4. Find the Right Supplier

As we stated in this article the quality of your products will depend on several factors, for example, if you are selling nationwide, you need to ensure that you are selling hemp-derived CBD,  not marijuana. The latter contains a higher THC dosage, making them legal only in a handful of states. The problem, however, is that there’s no affordable testing for determining the levels of THC in the plant. This can make purchasing raw materials from a farmer challenging if neither you nor they have the capabilities to test the crop.

Reputable wholesalers, on the other hand, typically do lab testing and can provide certificates of analysis (COA), detailing the product content. Not being able to provide one is a major red flag.

You can also ask the provider to help you customize your product formula, by stating what’s your end product and its components, and they should be able to help you define a customized formula.

5. Build your E-commerce Website

Find the best E-commerce integration for your store like Shopify, Woocommerce, or Bigcommerce and integrate it with your Website, using templates can help you to significantly reduce the time spent in the design. Remember that your website is a living organism that needs to be kept updated and fed with content.

Other important decisions are the Payment Processor and the Shipping Solutions, given the fact that the CBD industry is classified as “high risk” due to the ongoing regulatory debacle, many payment processors choose to exclude CBD sellers to minimize their operational risks. But you are not completely out of options. To accept payments from customers, click here to know more about how payment processing works for CBD companies.

6. Launch and Market your Business

Once you have followed all the previous steps you will be ready to launch your business, so the next step is to market.

Organic and Paid Efforts should always go hand in hand. Creating interesting blog posts following the SEO best practices will always come a long way when it comes to build trust and leverage the site authority.

Brand Ambassadors can get you access to their vast social following while helping you spread your message, this needs to be closely monitored because the way that they portray your brand will affect the inferred idea of your products.

You can always ask customers to leave genuine reviews on your products on your blog and social media pages in exchange for discounts or other benefits.

Takeaways

There are several pros and cons to entering such a thriving industry as the CBD one, we recommend always do your research, use the best suppliers and keep improving, evolving, and re-investing in your brand.

Trust is the business we are all in so we recommend working to build that trust from the very beginning.

Controversial Hemp Regulations in Sardinia Italy

By NectarTek, News Room

Legal but not quite, In Sardinia, Italy the Hemp Regulations infer that hemp can be grown, but as soon as the harvest and processing stage arrives, the problems start to arise.

Cagliari prosecutor’s office issued on the first week of April a new hemp regulation under a directive that suggests “the possibility of preventive seizures” of hemp crops based on “suspicion” alone that those crops may be marijuana.

Context on the Hemp Industry in Sardinia

This directive was issued right when the hemp season in Sardinia would usually start to prepare crops both for the domestic and international markets. What’s causing stress among the “cannabis light” farmers, is mainly the lack of principles of legality typical of the rule of law, this directive is based merely on police suspicions

Before this directive was issued, the Regional Council of Sardinia was analyzing a new law proposal to incentivize the hemp industry development in which two different bills were being discussed. 

The First Proposal was presented by the Sardinian Action Party. “Sardinia, due to a favorable climate and thanks to a new generation of entrepreneurs attentive to diversification, is one of the regions most interested in this cultivation”, they underlined, presenting the proposal that provides for contributions to businesses to relaunch the supply chain, promoting strategy of hemp in land reclamation, in contrasting hydrogeological instability, in site reclamation, in green building, and in bioenergy.

The Second Proposal to relaunch the supply chain was presented by the 5-star Movement. “From hemp, it is possible to obtain excellent natural fibers for ropes and fabrics, suitable for curtains, canvases, clothes, but also raw materials for the construction of insulating and sound-absorbing panels, padding, and plasters”.

In general, the two legislative proposals focus on the research activities necessary for companies, on the training of personnel to expand the crops that in 2019, in the Region, have marked the figure of 600 hectares cultivated, the construction of plants for processing and more generally the mechanization of sowing, harvesting, storage, and processing. Finally, the creation of a monitoring center for crops is also planned.

The Sardinia region has shown interest in this project since 2015 and had evaluated the possibility of including hemp as a crop to bring new jobs and clean up polluted fields thanks to its phytoremediation properties acknowledging the ideal climate conditions of the island to grow high-quality hemp.

The Origin of this Regulations

The lack of clarity of law 242 on industrial hemp, which does not explicitly mention the parts of the plant was pointed out as the origin of these polemic measures. The producers note that the law actually lists a number of uses, thus assuming that those parts are used for production. The regional councilor of the Psd’Az Piero Maieli, promoter of the first bill proposal, expressed his concern. “Any impediments to the cultivation, transformation of hemp and its subsequent marketing, which could somehow slow down the development of a quality supply chain, would have the consequence of discouraging young farmers, and not only, to start their own business”. “Is not a criticism of the work of the judicial police, which operates according to the law”, but asks “for a clarification of the normative dictation that can dispel any doubt about the lawfulness of cultivation”.

So far, the seizures of several tons of Hemp have been coordinated by the prosecutor Ezio Domenico Basso, who believes that the law only allows cultivation.

In short, according to this directive, the hemp regulations in Sardinia, Italy infer that the plant in the ground is fine while uprooting it, working it, separating the inflorescences, drying it, and obtaining oils or other finished products would not be allowed.

SOURCE: Canapa Industriale

American Hemp Awards 2020

NectarTek, Nevada’s Best Extraction Company

By NectarTek, News Room

LAS VEGAS, December 31st, 2020- Every year The Nevada Hemp Association, an organization dedicated to the re-birth of industrial hemp in America, celebrates an Award Ceremony in which they honor the Advancement of the American Hemp Industry.

These awards are separated into several categories out of which NectarTek won the Best Extraction Facility for two consecutive years.

This group’s vision is to help connect farmers, processors, manufactures, researchers, investors, and policymakers in order to accelerate the growth of the Hemp Industry.

NectarTek does not take this achievement for granted, and they attribute their win to all of their team who tirelessly work to respect the extraction standards and keep the facilities clean, organized and efficient at all times.

In the photo, Mike Whalen, President of the Nevada Hemp Association, presented Bob Pelton and his NectarTek crew with “The Best Extraction Facility of 2020 Award.”

CBD Quality
Defining Factors

By Resources

For CBD, the higher the quality, the higher the benefits. 

Then what factors determine the quality of CBD?

 

First of all and in order to establish the factors to take into consideration, we will segment this post into two parts. The first part will be addressed to CBD product manufacturers and the second part would be more of a consumer guide to identifying the quality of a consumer-facing product, if you are a consumer, feel free to jump into this section.

 

Organic vs Non-Organic

Much like organic fruits and vegetables, certified organic CBD is held to a much higher standard than non-organic products. This goes beyond growing CBD or hemp without pesticides or keeping it separate from non-organic CBD hemp during harvesting. High-quality CBD products come from organically grown hemp. Non-organic CBD products may contain heavy metals and other toxins from the soil or may have been treated with pesticides in the growing process. Low-quality CBD products also come from low-dose THC marijuana strains which in order to extract CBD use harsh chemical solvents to isolate CBD.

Extraction Outcomes:

The outcome of the extraction is one of the most important factors to consider when selecting the method to be used. When we talk about Isolated, Broad Spectrum, and Full Spectrum, those terms refer to the extraction outcome, so let’s start with a short definition:

  1. Isolate= Pure CBD (isolated from other compounds)
  2. Full Spectrum= CBD+ Terpenes+THC (<3%)+ other Cannabinoids
  3. Broad Spectrum=Like Full Spectrum minus the THC

The following are the most common extraction processes, some of them are best to Isolate CBD and others are best suitable for Broad or Full Spectrum, but we can’t say there is one process that’s better than another, it just depends on the execution and you can only determine their quality by testing the outcome.

Extraction Processes:

Ethanol extraction

Can be run under different temperatures and the outcome of the extraction will widely depend on this factor. With too warm temperatures there is a risk of extracting undesirable and unwanted compounds. With too cold temperatures the efficiency and profit margin may be significantly reduced. Therefore, cold ethanol extraction is often the preferred method with an optimal temperature range ideally between -30˚C (-22˚F) and -40˚C (-40˚F). One of the benefits is that cold ethanol won’t pull out plant lipids and pigments. This means you can avoid having to deal with a winterization step and may achieve a more optimal flavor profile.

Hydrocarbon Extraction

Refers to using butane or propane as a solvent that’s passed through the raw cannabis matter to collect cannabinoids and terpenes. The solvent with the essential oils is then heated up to evaporate off the butane or propane, leaving behind the extract. The risks of this method include a moderate potential for toxic solvent residue.

CO2 Extraction

Can be performed using different level pressures, according to the CO2 levels used, the extraction can be Supercritical, Mid-Critical, and Subcritical.

The first has become the most common one, in this process Carbon Dioxide is used as a solvent after liquifying C02 through specialized equipment. The superficial C02 passes through the cannabis plant, filtering the necessary CBD nutrients. The solution then passes through a separator that draws the CBD and terpenes out. Manufacturers can simply adjust the solvent and pressure ratios to achieve the desired concentration of CBD. This method is ideal for Isolates but no so much for Full or Broad Spectrum CBD mainly because some components like terpenes are left behind at the beginning of the process.

Mid-Critical and Sub-Critical processes only differ from the Supercritical CO2 extraction on the pressure level and temperature applied. These processes are longer, less efficient, and produce smaller yields, but they retain and protect fragile constituents like essential oils, terpenes, and other sensitive chemicals within the plant, which is highly desirable when producing full-spectrum cannabis products.

Any of the previously described Methods can derive into a good quality outcome, so beyond the extraction method used by your provider, a key decision factor should be to figure out if they use a third-party lab to test the concentration of the CBD in their products, as well as the safety of the other ingredients. Any reputable manufacturer will make these test results readily available on their website, with their product packaging, or upon request. The test results will show the potency of the CBD and other cannabinoids (described in milligrams). They’ll also reveal any potential contaminants, as well as the presence of any solvent residue if the product used hydrocarbon solvent extraction.

So what does the term clean extraction really mean?

Some of the previous methods are known for leaving traces of harmful residual solvent in the extract, it can also refer to the environmental footprint that the implicated in the process, therefore, a clean extraction can refer to both traces in the product or the environment.

After the CBD extraction, these Isolates, Full or Broad Spectrum components will be either continue into a production line into final products or sold to a different manufacturer who will add them to other substances to create various CBD products like teas, gummies, capsules, edibles, tinctures, topical creams, or salves.

Label CBD Terminology:

If you’re buying, for example, CBD oil, the product will likely include a carrier oil to stabilize and preserve the CBD and help your body absorb it. That’s why one of the main ingredients of the product may be grapeseed oil, MCT oil, olive oil, or even cold-pressed hemp seed oil.

A CBD oil or an edible might also contain a natural or artificial flavoring or coloring.

If you’re buying a full-spectrum product, check the THC percentage to be sure it meets your needs.

If you’re buying abroad- or full-spectrum products, it may also list the cannabinoids and terpenes included, though these are often included in the certificate of analysis (COA).

Certificate of Analysis:

A reputable CBD product will come with a COA. That means it’s been third-party tested by an outside laboratory that doesn’t have a stake in the product.

You may be able to access the COA while you shop by scanning the QR code on the product with your smartphone.

Many product websites or retailers also have the COA available. If it’s not, email the company and ask to see the COA. The factors to look for would be:

1. Labeling accuracy

The CBD and THC concentrations on the COA should match what’s stated on the product label. Labeling inaccuracies are a common issue with CBD products.

One study revealed that only about 31 percent of products are accurately labeled. After analyzing 84 CBD products sold online, researchers found that with respect to CBD, about 43 percent have a higher concentration than stated, and about 26 percent have less than claimed.

2. Cannabinoid profile

If your product is full- or broad-spectrum, look for a list of cannabinoids and other compounds. Cannabinoids like cannabidiol acid (CBDA), cannabinol (CBN), cannabigerol (CBG), and cannabichromene (CBC) should be on the list.

3. Additional lab charts

Look for heavy-metal and pesticide analyses, as well. You can determine if a certain contaminate is detected at all, and, if so, if it’s within a safe limit for ingestion. Check the status column of these charts and make sure it says “pass.”

Final Thoughts

CBD products, have skyrocketed in popularity and seem to be for sale everywhere, but without wide federal oversight, the regulations are not always being followed. So it is up to the consumer to check on the product’s labels, and if they don’t have third-party testing, the product probably isn’t worth buying.

A Collaborative Partnership

By NectarTek, News Room

 

CannAssist International Signs Strategic Partnership with NectarTek LLC

 

NEW YORK, March 30, 2021(GLOBE NEWSWIRE) – via InvestorWire –CannAssist International (OTCQB: CNSC), a biotech company that complexes oil into water-dispersible formulations, known as 2CYTE technology, and NectarTek LLC, a hemp extraction company, have entered into a strategic partnership. 

After years of product development and supplier evaluations; batch-to-batch consistency, high potency, superior quality, and NectarTek’s commitment to safety and reliability, CannAssist chose NectarTek as its cannabinoid supplier. 

This agreement provides both companies with additions to their respective product lines and prospective clients. Both CannAssist and NectarTek predict strong growth with the alliance of shared distribution and sales networks. 

 

CannAssist CEO Mark Palumbo says:  

“We are looking forward to moving this agreement into action. CannAssist has dedicated itself to testing, research, and quality in all of its offered products. It is gratifying to have NectarTek, a company of impeccable quality in their space, agree with the utility and quality 2Cyte technology brings to their raw materials.”

NectarTek CEO Joseph Falls says:  

“We are excited to partner with such a great company that is as committed to delivering the best CBD product on the market as we are.”