The CBD wellness space is overcrowded, but there is still opportunity for brands.
That was the takeaway Thursday from CBD experts in the “Regs to Riches: Building a CBD Wellness Brand” breakout session at MJBizCon. Panelists offered four key takeaways to survive and thrive as a wellness brand.
Use your capital wisely
Shannon Kaygi, co-founder and CEO of Eossi Beauty, regrets how much she initially spent on public relations when she started her business.
Instead, she wishes she had hired someone to start cold calling immediately and worked with a full-service marketing firm. “I’d put every penny into sales and marketing.”
When it comes to marketing, “building a personal brand is huge,” she elaborated. While Tik Tok, Instagram and others routinely block posts related to cannabis, it’s crucial to use social channels to convey what you stand for, not necessarily to share images of product.
“Instagram’s algorithm loves your face,” she explained.
Kaygi also warned against building a huge catalog of inventory before establishing distribution channels.
The challenge is “literally being able to sell CBD,” agreed David Abernathy, principal at Arcview Management Consulting.
Play the long game
Too many of the business plans Abernathy sees assume there will be a quick return, he said. You aren’t going to blow up and make it big fast, Kaygi agreed.
Instead, take the time to understand how to comply with existing – and possible future – regulations and build your infrastructure and inventory for the long haul.
A change in the regulatory framework can collapse a business overnight, Abernathy warned.
Choose partners carefully
Whether you plan to white label CBD products for retailers or are relying on a supplier for key ingredients, take care when choosing your partners.
You have to really get to know them, the panel agreed. Talk to others they work with and take your time.
Most importantly, “for god’s sake, hire a lawyer before you sign a partnership agreement,” Abernathy stressed. He has been shocked by what businesses have agreed to.
“Definitely a lawyer – lawyer, lawyer, lawyer,” echoed Kim Stuck, CEO of Allay Consulting.
Plan ahead for your supply chain
COVID has only exacerbated long-standing supply chain challenges in cannabis, said Abernathy, describing items held in customs “forever” because they are labeled “cannabis.”
“You can’t do just-in-time ordering,” he warned. Instead, plan ahead.
Know how long it will take to run out of any given item and never get down to zero, Stuck agreed, including gloves and masks for your packaging team during COVID.
“It’s hard to do it, but if you can do it, it’s smart.”
Pam Moore can be reached at firstname.lastname@example.org.