The global CBD market has experienced remarkable growth in recent years. With cannabis being legal in many countries, the demand for CBD pen has skyrocketed, opening up opportunities for small businesses to enter the market. However, along with the opportunities, there are also many challenges that small businesses face when selling CBD products.
The global cannabis and CBD market
According to a report by Grand View Research, the legalized marijuana market on the global front was expected to be worth $9.3 billion in 2020. It is estimated that the market growth will be 26.7% by 2028. It is a compound annual growth rate, which is calculated from 2021. This growth is attributed to improving the legalization of cannabis in the health and recreational field.
In 2020, the CBD market size globally was valued at USD 2.8 billion in 2020. It will grow at a CAGR of 21.2% in the upcoming five years. CBD, or cannabidiol, is a non-psychoactive compound found in cannabis that has several health benefits and is commonly used in products such as oils, tinctures, and gummies.
Largest CBD and Cannabis Seller in Global Market
North America currently dominates the cannabis and CBD market, with the United States being the most significant market owing to the increased legalisation of cannabis in various fields in different countries. Canada is also a significant player in the industry, as the country legalised cannabis for both medical and recreational purposes in 2018.
Europe is also emerging as a significant market for cannabis and CBD, as several countries have legalised cannabis for medical use, and some countries have also legalised it for recreational use. Germany is currently the largest market for medical cannabis in Europe, while the United Kingdom has recently legalised medical cannabis for certain conditions.
Challenges of selling CBD in a small business
There are several challenges that a small business selling CBD has to face. Here is a list of that challenges.
Lack of awareness among government organizations and agencies:
One of the biggest challenges small businesses face when selling CBD products is the legal hurdles they must overcome. While many countries have legalized cannabis, the rules and regulations surrounding CBD products can be confusing and complex. Small firms frequently have to rely on their own interpretation of the laws or seek legal counsel because the laws are only sometimes clearly defined.
In addition, because of uncertainties in the law and regulations, many financial institutions are reluctant to cooperate with CBD businesses. As a result, small businesses need help locating a trustworthy banking partner to manage their funds.
Financial and banking issues
Several banks and financial institutions are reluctant to offer services to companies in the cannabis and CBD industry due to the legal and regulatory issues surrounding it. Accessing banking and financial services, such as loans and credit, may become challenging for firms as a result.
Difficulties in marketing and advertising
The challenge of marketing and advertising CBD products might be difficult. Businesses that advertise CBD products may face bans or shadow bans due to the rigorous advertising standards of many social media networks. Moreover, CBD advertising can be subject to limitations on search engines like Google and Bing.
Even though it is permitted for firms to advertise their goods, they still need to be careful with their terminology. Specific terms and expressions can be regarded as making medical claims, which is prohibited in many nations.
Quality Control Issues
For small enterprises, ensuring the consistency and quality of CBD products can take time and effort. Businesses must go above and above to guarantee that their products are secure and efficient because there are no industry standards or guidelines.
This means reviewing the potency and purity of their products and ensuring that their manufacturing procedures are up to code. Small organizations might be unable to conduct these tests internally, which can be expensive and time-consuming.If you are user who is looking to use vape pens, do remember to check out how to charge a vape pen.