Learning how to start a hemp business is not as complicated as you think. However, don’t be fooled by resources on the web stating that all you need is as little as $1000—that might be a little too optimistic. The process entails more than money and requires a lot of your time, efforts, and awareness of the hemp industry.
This article on how to start a hemp business will walk you through the essential steps and points to consider to get a good start on the beginning of your new venture. Before diving into the process, you must have a good grasp of the hemp industry as a whole and its legalities.
A significant part of the hemp industry is the distribution of CBD products, a medically beneficial substance that may reduce pain, alleviate inflammation, and promote relaxation. CBD (cannabidiol) is incorporated into thousands of consumer products, including CBD oils, topicals, food, beverages, and pet food.
The hemp market also has much to provide outside of CBD. Hemp is a highly valuable raw material for biofuel and energy production and a stable source for industrial products, such as clothing, textiles, ropes, shoes, and paper.
As an entrepreneur venturing into the industry, you have several domains to specialize in (yes, hemp is that versatile), namely:
A hemp business can offer you a variety of specialties to choose from. But before you think about dipping your finger in the ink, you have to learn about the legalities of hemp.
It would be unwise to begin this entrepreneurial journey without a strong grasp of the federal law and regulations surrounding the versatile plant. This stage never ends—the regulations are continuously changing.
The 2018 Farm Bill authorized the production and distribution of hemp and hemp seeds and removed them from the Drug Enforcement Administration’s (DEA) list of Controlled Substances in the United States.
Where you choose to cultivate hemp is a significant factor in what the venture will look like. Some states have come out with pro-hemp laws, while some have yet to comment on the subject.
If you live in a state without its own hemp program, hemp is still legal to grow as long as you adhere to USDA regulations. However, individual states may choose to pass their own laws and provisions restricting cultivation and distribution.
For example, California is one of the biggest cannabis markets in the United States, with three potentially applicable licenses to cultivate cannabis. However, only three counties in the state have regulations for hemp cultivation.
So if hemp is federally legal, what’s the problem? Many states, cities, and counties simply have yet to find their take around all the implications of hemp cultivation. After all, it has only been three years since the 2018 Farm Bill. On the bright side, a USDA-issued license allows you to produce hemp under tight provisions.
Regardless of regulations, hemp products and byproducts continue to take the consumer market by storm.
This would be an excellent time to start profiting from this highly therapeutic and versatile plant, but as hemp takes time and preparation to flourish, you must abide by the same for the best results.
Here are five crucial things you need to know to secure your promising venture into the hemp industry.
If, for example, you want to grow hemp, you have to pose yourself a question: Who will buy all this hemp? Many hemp cultivators seek out contracts with manufacturing laboratories and businesses that process hemp. This may not be too difficult for you to achieve, as the demand for hemp biomass is relatively high.
Marketing evolves, and it is essential to get with the times and reach people in a manner that today’s society allows it. A great way to understand the hemp market is by tapping into social media. Some hemp farmers and cultivators have built a solid online presence and have successfully engaged with manufacturing and extracting companies.
Consider connecting yourself with these sources and, at the very least, get acquainted with their methods. Hemp social media marketing is a thing, and it would bode very well for you to look into it and gather as many resources as you can.
The 2018 Farm Bill paved the way towards the federal legalization of industrial hemp, with no more than 0.3% THC content (tetrahydrocannabinol) by dry weight basis. To add to the hotpot of regulations, hemp cultivation provisions do not supersede local and state laws, meaning a state can still impose restrictions over federal laws.
To check the legal status of hemp in your state, feel free to consult this reference.
The United States Department of Agriculture (USDA) passed a final rule in early 2021 outlining national hemp production laws. While approved growers may produce and sell hemp legally in the United States, plants that contain more than 0.3 % THC when dry are illegal as they are then classified as “marijuana” and not hemp.
Hemp plants are not just a means to extract CBD for medicinal purposes, which is a prevalent route most cultivators opt for. If you wish to tap into the CBD industry, go for it! However, remember that hemp is no one-trick pony. There’s more you can do with it. You can follow the stream, but you can also highlight its underrated yet fundamental attributes.
You can use hemp to create soaps, creams, and oils. Hemp is loaded with antioxidant properties that promote skin health and wellness. Not to mention, it can be used to make textile, paper, fiber, plastic, and so on. If sustainability is a part of your business’s belief system, hemp is a highly valuable product with the potential to diminish waste and promote a greener earth. Food for thought!
Here’s the catch: sometimes, your hemp specialty can also be determined by the buyers that have contacted you thus far.
If most of your prospects are leaning into CBD products, that can change your business structure. You may opt for this method if you prioritize profit, but remember that there will still be buyers for other mediums of hemp. You just need to know where to find them.
A business plan gives you an edge in understanding your objectives and reaching your prospects. However, getting a hemp license is by far the most crucial step of all. Without a hemp license, your efforts will essentially be moot.
When the 2018 Farm Bill was signed into law, the commercial production of hemp in the United States became federally legal. The law explicitly preserved the FDA’s authority over proper hemp distribution and products, meaning you must abide by the FDA’s requirements regarding all hemp regulations.
One of these regulations is that you must have a license to obtain the right to grow hemp. Take note that this does not also apply to marijuana cultivation unless you live in a state where medicinal and recreational marijuana is legalized. To play it safe, consider consulting a lawyer well-versed in hemp cultivation laws before applying for the license.
If you choose to dive into specialties other than hemp farming and cultivation, you may not need a hemp license. A vast network of helpful connections would help the most in this scenario.
Regardless of the industry, you always need a business plan before you go forth. Starting a business entails a lot of preparation and organization, especially as you will be meeting with prospective partners, investors, processors, and buyers.
This step is all the more essential in the hemp industry, an environment with promising yet ever-changing and uncertain structures. Not only will a business plan help you determine your business operations, but it also assures confidence in your movements. A great business plan for the hemp industry includes:
The more precise you are, the better. Take note that this is an essential first step, and it requires extensive knowledge of the hemp market. Approach this step with research and a clear understanding of how you want to impact the industry positively. Update your business plan regularly and after every milestone.
No new business succeeds without a never-ending strive for greatness. There may be some bad days, and you won’t make the right choices right away. And that’s okay! Fortunately, the hemp industry is relatively new, and everyone in it is still finding their footing.
You can have a successful hemp business with dedication and awareness. So much of your eventual success depends on a continuous search for knowledge and building the right connections.
Once you have started your hemp journey right and it’s time to start testing your samples, remember us at Zera Hemp Labs to ensure a professional and accurate hemp testing experience that spearheads you into further success.
Ready to sow the seeds for triumph?