Can you legally sell CBD product online, through your eCommerce website?
You can find it in almost everything these days: coffee drinks, bath bombs, body creams, chapstick, chocolate… you name it, someone has probably added CBD to it. From the health and wellness community to those struggling with anxiety, and even athletes looking for relief, CBD is growing in popularity throughout many sectors. It’s taking the world by storm and by 2024 the hemp-derived CBD market is expected to grow to over $760 million.
In order to take advantage of this growth, there are some things you should know and questions you should ask. As a web development company based in Seattle, we tend to get these questions a lot so we decided to break it down and layout a guide to selling CBD online.
What is CBD?
CBD is cannabinol, one of over a hundred chemical constituents found in cannabis. No, it’s not going to get you high. THC or tetrahydrocannabinol is the chemical that causes a “high” feeling, while CBD is what causes the relaxed, mellow feeling and is so far not found to be addictive.
According to the World Health Organization: “In humans, CBD exhibits no effects indicative of any abuse or dependence potential…. To date, there is no evidence of public health-related problems associated with the use of pure CBD.”
Offering the relaxed feeling, as well as some other possible benefits (still being tested by the FDA), CBD creams, oils, baths, and much more, have been created to tap into a market of people seeking alternatives for anxiety, relaxation, and generally a new thing to try.
CBD Selling Regulations
Isn’t weed illegal?
At a state level… It depends on where you live. In terms of hemp-derived CBD, federally it is legal due to the passing of the Agriculture Improvement Act of 2018. Among The Agriculture Improvement Act of 2018 (Popularly known as 2018 Farm Bill)’s broad-ranging provisions, it legalized the cultivation and sale of hemp at the federal level, effective January 1, 2019. According to Perkins Coie, “The 2018 Farm Bill defines hemp as the plant Cannabis sativa L. and any part of the plant with a delta-9 THC concentration of not more than 0.3 percent by dry weight. This definition is consistent with the definition of “industrial hemp” in the 2014 version bill, which created a limited agricultural pilot program regarding research into industrial hemp.”
Some states prohibit the sale and consumption of CBD, listed here, while others simply limit the types of products that can be sold or require a specific license.
Although hemp-derived CBD is no longer considered a “controlled substance,” it’s still treated differently than selling something like a tee shirt online, especially with regulations imposed by the FDA.
Is CBD regulated by the FDA?
According to a statement released in November of 2019 by the FDA, “The FDA continues to explore potential pathways for various types of CBD products to be lawfully marketed. This includes ongoing work to obtain and evaluate information to address outstanding questions related to the safety of CBD products while maintaining the agency’s rigorous public health standards.”
Since there is still a lot of research necessary to know the effects of CBD, regulatory clarity may take years, but the FDA is acting quickly due to the growing popularity of hemp-derived CBD.
How to Sell CBD Online
What eCommerce engines can I use to sell CBD?
There are a limited number of platforms in which you can sell hemp-derived CBD, but those that allow it include:
What payment processors can I use to sell CBD?
Since it is not fully regulated, CBD transactions are considered “high-risk” transactions, which limits the number of platforms that will allow for CBD to be sold.
A few of those that accept CBD transactions include USAePay, NMI, PayKings, SMB Global, Easy Pay Direct, Pay Wize, iPay Total, Payment Cloud, and eMerchant Broker.
Each of these has different benefits and drawbacks, depending on your business and the level of complexity your business requires.
For a great list of considerations when choosing a payment processor, our friends at BigCommerce created a great resource on what to look for in a CBD Payment Processor.
Can I ship CBD?
You can ship if you are considered a “compliant” CBD business, which requires the following:
- Have all required licenses — including a grower, processor, or retail license,
- Only sell CBD products containing less than 0.3% THC,
- Only source from growers operating a legitimate, licensed business,
- Have a third-party testing process, and
- Have documented results from this testing.
What shipping carriers can I use to sell CBD?
Following the listed above and being a compliant CBD business also allows you to use a few carriers to ship your hemp-derived CBD products.
All three of these carriers require you to sign a self-certification that in essence certifies that you meet the compliance standards above. Each carrier has specific rules including discreet packaging, the ability to identify where the hemp was grown, and more. Be sure to check with each carrier before shipping out.
Note that at this time, some carriers, including FedEx do not allow for the shipment of any hemp products.
How do I avoid selling to states where CBD is illegal?
Although federally legal, some states have still made the purchase and selling of hemp-derived CBD illegal and you can be penalized for selling to those states.
On most systems like BigCommerce and Shopify, you can create product rules for your hemp-derived CBD products that don’t allow purchases to go through if the shipping is going to a certain state.
You should be sure that your entire team is well-educated on the rules, requirements, and licenses required to each state. Create a document with references, notes, and other information and make sure that someone on your team is up to date with any laws or recent rulings that may affect each state.
It's also a good idea to make it clear to your users that they are unable to purchase if they are from one of the banned states. Our friends at Humble Deodorant do a great job putting a warning right in the product info with a pop-up that shares the restricted states.
Marketing Your CBD Business
Are there any limits to marketing my CBD business?
As the CBD market continues to grow, it might be tempting to make claims that differentiate your product and business from another, but it’s crucial to remember that there are some things you cannot say when marketing, packaging, or selling your hemp-derived CBD product.
Your hemp-derived CBD business cannot claim any of the following:
- Health or Medical Benefits
Anything that states it cures, prevents, treats, combats symptoms, etc. is not allowed.
- Untested Claims or Assumptions
Similar to the above, any claims you make about your products must have scientific research to back it up. Whether it’s a review from a customer or a social media post, you can’t claim anything that can’t be backed by reputable sources.
Currently, there’s not a lot of reputable research provided and widely accepted about CBD, so you have to be careful about what you say and where you source your information.
- Claiming it As a Dietary Supplements
Are you able to claim your hemp-derived CBD product if it’s able to be ingested through a tincture, oil, etc? The FDA strictly states: “No. Based on available evidence, FDA has concluded that THC and CBD products are excluded from the dietary supplement definition under section 201(ff)(3)(B) of the FD&C Act [21 U.S.C. § 321(ff)(3)(B)].”
Many popular marketing platforms still limit advertisements and marketing verbiage that you should be aware of.
- Google AdWords
Using Pay-Per-Click or Google Shopping as part of your marketing plan should be out of the question. Under the list of unapproved pharmaceuticals and supplements is anything that includes cannabinol.
That being said, organic SEO is still an option for you using Google.
- Facebook & Instagram Ads
Although not outlined directly in their policy, agency and actions show that Facebook only specifically bans the promotion of ingestible CBD or hemp-derived products. That meaning, any topical CBD products are able to be advertised on the platform.
Twitter does not allow for the advertisement of illicit substances including CBD. That being said you can mention CBD, it just can’t be specifically an advertisement for a product - so if you have a good content marketing team, you may be able to build awareness through Twitter still.
What’s the best way to market my CBD business?
It may feel as if you are limited in your marketing abilities, but have no fear! There’s a lot of great options to build up your CBD business through other (legal) means.
- Organic Social Posting
You’re still able to have social media accounts for your CBD business and they’re a great way to build your audience. Again, you must avoid any specific benefits or cures as mentioned earlier and note you won’t be able to link and sell products through platforms like Instagram. A few companies that do a great job sharing their CBD products like Recess, Feals, DazeyCBD, and Prima.
- Organic SEO
Despite the restrictions on paid advertising, you’re able to continue normal tactics for building up your organic SEO through tagging, content, and backlinking.
- Content Marketing
Using your content can be an awesome way to market your business, especially by building up your helpful and informational content. Answering frequently asked questions, discussing the ins-and-outs of using CBD, how you develop your products, and other information about CBD can be a great way to keep users interested and consistently coming to your site.
- Custom Branding and Design
In order to differentiate yourself from your competitors, it’s wise to offer unique branding and product packaging design. Designing and building out a brand that represents your business well can be a great way to market your company. Aesthetics and brand culture tend to be more important to the target market for CBD wellness industries, so keep in mind the benefits
- Email Marketing
With all of the restrictions on advertising your CBD business on platforms like Facebook, Google, etc. it’s great to think about a few other alternatives, especially email marketing. Using email marketing is a great way to advertise your eCommerce business because you often have clients who have previously bought from you or subscribed, meaning they already have some level of interest.
Although it’s less risky, your emails should still abide by state and federal rules - like claims that CBD can cure or prevent anything.
Do you want to sell your hemp-derived CBD product online?
We can help! Whether it's branding your product, helping you work through regulations, or deciding the best platform to use, we're happy to help you grow your business!