Five Reasons CBD Businesses Fail

July 29, 2020



In 2018 changes to the Farm Bill in the United States meant that the marketplace was able to open up and offer more varieties of CBD products for customers interested in managing stress, pain, and more. While this is an exciting time for those in the CBD industry, full of opportunities, this can also be a risky time for new businesses. Here are a few of the common pitfalls to avoid.

Not Understanding Regulatory Requirements

While the 2018 Farm Bill ultimately legalized industrial hemp for sale in the United States, that legalization was not as straight-forward as the regulations regarding other typical agricultural products. That means savvy retailers need to stay abreast of current regulations to ensure compliance with all legal requirements. With questions over what, exactly, the new regulations mean as well as confusion in the minds of customers and law enforcement agencies, CBD retailers need to be masters of understanding the complicated rules of the industry and ensure that general business is not derailed by a misunderstanding of the relevant laws. 

Not Niching Down

In addition to understanding the regulations and legal requirements, smart CBD retailers focus on a particular area of the market. Hot CBD markets that have seen recent success include: spa services, edibles, pet-friendly solutions, high-end concentrates, and vegan/organic options. By choosing a niche, you will be able to specialize and become known as the go-to supplier for your unique customers. By choosing to niche down early in your business plan, you are choosing a path to becoming a successful CBD business.

Lack of a Staffing Plan

Critical to the success of any business is a strong team. While the CBD business is in this stage of incredible growth, it’s important to cultivate a strong pipeline of capable, trained, professionals to help run your business. Since the industry is in growth stages, it can be hard to locate (and keep) excellent employees. Smart CBD retailers work in partnership with staffing experts like Spectra360 to identify, screen, and onboard qualified staff.

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It’s great to have a niche, understand the regulations, and put together a stellar team, but what happens when a new competitor shows up focused on your niche, or the regulations that you thought you understood shift overnight due to a new application of the rules? It’s imperative to have a ‘Plan B’ to stay successful in the dynamic world of CBD sales. Focus on your winning plan while having plans in place to replace a major income stream in the case of competition or new regulations. By staying supple and responsive, CBD businesses can reap the rewards of such an exciting time in the industry.

Not Educating the Public

The final key to running a stable, profitable CBD business is to focus on education. Work with your current and potential customers to help identify CBD solutions for their ailments. Teach the public about the amazing applications of CBD. By working to increase public knowledge on the amazing effects of CBD, we can all work together to build a strong reputation and profitable businesses in this exciting new area of health and wellness.

Need help finding employees for your CBD business?

Spectra360 specializes in sourcing staff who understand the CBD industry. Not only do our hiring managers know what skills are needed for successful candidates, we also maintain a large pipeline of qualified applicants. That means that working with us will help you keep your business running smoothly with the experienced professionals as quickly as possible. Contact us today!

Spectra360 CBD Staffing | 888.290.5908 |


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