The global cannabidiol industry has undergone a major overhaul in the last few years and it will continue to evolve at a breakneck speed. According to the Grand View Research Paper, the cannabidiol market size was valued at USD 2.8 billion in 2020 and is expected to expand at a compounded annual growth rate of 20.2% from 2021 to 2028. The revenue forecast in 2028 is expected to be USD 13.4 billion.
With the passing of the 2018 Farm Bill and ease of regulations; the CBD & hemp industry will continue to grow and the market landscape will only be more competitive. Key factors that are driving the market growth include increasing demand for CBD for medical and wellness purposes owing to its healing properties.
So how can you grow your CBD business amidst such stiff competition?
Below mentioned are some of the best ways to drive growth in your CBD & hemp business:
1. Stay On Top Of Legal Requirements
The CBD industry is a high risk industry. Legislation and regulations are not always in the best interest of the businesses. Hence, staying on top of these regulations and laws will help you keep your business legitimate. Although hemp-derived CBD is legal on the federal level, it’s the state that determines the legality of a business. Keep yourself aware of the business legal requirements, particularly in your state. It will help you navigate through any changes in regulations quickly.
Sudden law changes should not impact your business, hence it is essential that you build a team that determines your strategies for changing scenarios. Make sound investment in hiring the right people that can help you create a backup plan for your business. Follow industry updates, CBD news and blogs that will help you stay informed.
If you are a CBD business owner, stay in contact with industry experts and influencers who can keep you abreast of trends and challenges in the industry.
2. Get Credit from Alternative Finance Companies
As the cannabis industry continues its rapid expansion, companies involved in hemp and CBD cultivation, production and retail are finding it difficult to find financing when purchasing products and supplies for their companies.
With most traditional banks, CBD and hemp products are not possible to underwrite due to their connection to cannabis and THC. While CBD and hemp are legal in all 50 states, the lack of financing has made it tough for businesses to afford items needed to grow and maintain their business.
CBD and hemp businesses often hit roadblocks when trying to pay for equipment and supplies from their vendors and are often looking for alternatives to credit cards and traditional financing. Hence, maintaining cash flow is key for having sound financial standing of the business. It is an alternative B2B finance companies, such as Credit Key, that are proving to be a game changer in fueling company growth by offering instantly approved credit for B2B businesses.
Seeking financial assistance from alternative finance companies will facilitate lightning-fast financing approval that is unique in the B2B space. It will prove to help merchants drive sales, revenue and conversions. Merchants equipped with B2B finance also benefit from immediate payment, unmatched ROI and increasing AOV, that leads to stronger customer loyalty.
3. Offer Unique Products To Beat Competition
The quickest way to differentiate yourself from the competition is offering novel products and services that are not available in the market. As more and more businesses join the bandwagon of CBD and hemp, offering unique products will make your products stand out from the rest of the competition.
The value proposition of your product should be something that customers and prospects connect to easily and it should have a strong demand in the marketplace. Brainstorm what you can bring to the table and determine what customer problem is solved by your product. For example, you can check KoiCBD that has unique offerings in this space.
4. Invest In Marketing & Branding
Hire the right people and invest in key business areas such as marketing and branding. In order for sales to pick up, it is important for your products and services to be found at the right place, to the right people via the right channel. Digital marketing initiatives such as SEO, content marketing, paid search and advertising will have you dial-in repeatable and scalable processes.
Marketing plans need to account for all the regulations as CBD & hemp is a highly regulated marketplace. Social media marketing, attending trade shows and conferences, organizing webinars can play a huge role in all the stages of the sales funnel.
5. Offer Flexible Payment Options To Customers
Providing flexible payment solutions and other forms of financial assistance can be invaluable for generating additional sales over time. The quicker your buyers can be approved for a line of credit, the quicker they can go through with a potential purchase. More importantly, these financing options give your B2B customers more buying power. With more affordable and customer-friendly financing terms at hand, your buyers can increase their purchase value — and will be able to ramp up their own operations much sooner than they’d anticipated.
Credit Key, a Buy-Now-Pay-Later solution for B2B is currently offered at two dozen web stores servicing CBD, hemp, vape and related businesses. This allows small businesses to purchase the equipment they need while spreading the payments over time.
Brad Ridenour, Co-Founder and CEO of Koi CBD said: “We service a wide range of businesses within the CBD and hemp space, providing top quality products including tinctures, gummies, topicals, and more. Offering our customers a financing option allows them to maintain the cash flow they need to grow their business. This is critical for early stage companies and we’re seeing a significant increase in financing via Credit Key.”
It is imperative for businesses to look into Credit Key’s instant financing solution that integrates with leading e-commerce platforms and order management software. It can even approve buyers in real-time from their cart, and helps merchants increase the average order value and conversion rates.
In a nutshell, below mentioned are 5 best practices to grow your CBD & Hemp business:
- Stay on top of legal requirements
- Get credit from alternative companies
- Offer unique products to beat competition
- Invest in marketing and branding
- Offer flexible payment options to customers
Do you want to implement buyer-friendly payment options for your business? Check out Credit Key and schedule a demo today.