The market for CBD, hemp and marijuana products is changing drastically. The last ten years have seen major changes in laws surrounding the production, sales and distribution of cannabis products at a state level and is largely becoming a widely accepted part of our society and culture. This is great news for those looking to start businesses in the CBD + Cannabis industry! However, while there is a large market for consumers, there is even greater competition and regulations that may make it difficult to conduct your business. States that have completely legalized adult use of CBD and cannabis have varying laws around how and where these products can be sold, produced and distributed. Certain states allow everything from in person shopping to online delivery, while others only function in person. When deciding what format is best for your online business, understanding the benefits of both are valuable looking at the trends nationally around CBD and cannabis products.

There are pros and cons to online and in person retail stores for cannabis products respectively. In store retail means a higher number of employees and overhead costs, while online sales are not always available for cannabis products, however products that contain CBD alone will probably be able to exist with a little more flexibility. Your location, product line, aesthetic and target audience will all play a major role in deciding whether to choose an in person model, online or both for your CBD/Cannabis business. Let’s explore a few of these pros and cons a little more closely and hear from several business owners who provided their expert advice on the subject.

State Regulations

State regulations are going to be the biggest sticking point for businesses exploring options for a CBD or cannabis business. While many states are reforming their laws around cannabis, not all states function in the same way. “There are unique benefits to both online, in person and multichannel stores when it comes to CBD. Because CBD is extracted from hemp, there are state to state regulations that may allow one or the other, but not always both. Make sure you fully understand the laws in your area to choose the most appropriate format for your CBD business,” said Steven Vigilante,Melanie Bedwell, Head of New Business Development and OLIPOP. For example, California allows online sales and delivery of cannabis products, while Washington only allows retail sales.

The rules are especially complicated for businesses that sell both cannabis and CBD products. “Online regulations can be a little bit tricky for CBD and cannabis companies. While you may be able to host online, you’ll be limited to states that allow delivery of such products,” said Justin Chan, Growth Manager of JuneShine. “If you live in a state that regulates hemp and marijuana sales, but doesn’t allow delivery, your best bet may be getting your products into retail stores.”

Online and Multichannel

For businesses that only sell CBD products, there is a lot more flexibility. Most states allow for the sale and distribution of Cannabidiol (CBD), allowing these businesses to function more freely within the market. Starting with an online format has great customer relation benefits as Sarah Pirrie, Brand Director of Healist Naturals tells us, “Online platforms allow for a greater direct to consumer relationship between brand and customer. This can allow CBD brands to gain deeper insight into their products and what their customers need in terms of care.” It also has it’s benefits of adding a slight air of mystique and novelty when your product can only be found in one place. “Remaining solely online has it’s benefits. Customers often like exclusivity, and if your amazing CBD products can only be found directly on your website, you are cutting out all the unnecessary work of finding the best retailer to sell your products,” said Shaun Price, Head of Customer Acquisition at MitoQ.

While online sales are a great way to gain traction in the industry, selling your products in retail stores will expand your network and bring your products to a greater audience of customers. “The most optimal format for a CBD business is to follow an omnichannel model. This allows you the greatest control over your product distribution while simultaneously giving you more lines of income by selling your product in stores,” Anish Patel Founder of Tinto Amorío. “Plus, if you are selling directly to customers they will be more likely to recommend your product if it’s seen in a store. The more channels you have, the more ways people can discover your unique products.”

In-Person Retail

While much of the legal cannabis industry is still maturing and becoming viable for small businesses and farms, it is light years ahead of where it was just a mere ten years ago! “Retail cannabis stores are becoming more and more legitimate as laws mature,” said Inesa Ponomariovaite, Founder of Nesa’s Hemp. “Having your CBD product in a dispensary that sources its products exclusively is a great way to add to your reputation. Should you decide to go into stores, make sure the dispensary is as exclusive as your website.” High end cannabis stores are definitely going to bring a lot more attention to your brand just by virtue of being seen in the store and promoted by sales staff. “In person retail stores allow you to create a greater network within your immediate community and work with local suppliers and brands. While this might not be feasible for all businesses right away, it should be a goal to eventually move to a hybrid model,” said Tom Lynch of  MedMen.

If a business is lucky enough to have it’s own store front, that opens up even more options for product and marketing control. “Retail stores can allow you to increase your customer base by offering discounts and loyalty points to your customers. Most online businesses will do some form of this as well, but the convenience for local shoppers makes it that much more exciting to build up to a discounted product after shopping with you for a while.” said Lauren Singer of Package Free Shop.

What format your CBD + Cannabis business takes depends largely on what marketplace you’re trying to enter, where your business is located and what products you sell. Companies that focus on CBD only products will face much less regulation from state to state, allowing them to easily take advantage of both online and in person markets. Cannabis companies that sell products including THC will need to be more selective of where they host their businesses. There will surely be a time when all of these products can be accessed nationally, but that time has not yet arrived. For now, cannabis companies will have to work within the bounds of state regulation. Patience, passion and care is all these companies need to stay afloat for the long term!