How Much Does It Cost To Start A Cbd Business? (In 2024)
Looking to start a CBD business?
But curious about:
- how much it costs to start a CBD business?
- what are the typical CBD business startup costs?
- or the actual cost of starting CBD businesses?
Well, we have the data to prove it, supported by real CBD businesses and how much they actually cost to start.
Let's go over it.
What is the average cost of starting a CBD business?
Based on our data reported by actual CBD business founders, the average cost of starting a CBD business is between $1,000 and $200,000.
Additionally, our data shows that the the median startup costs for a CBD business are around $35K.
Remember, though, not all CBD businesses are the same - and neither are people's budgets. It's important to distinguish between different levels or types of CBD businesses
Real World Examples: How much does it cost to start a CBD business?
We asked real CBD business founders and business owners how much it actually cost to get started?
Here is what they said:
Evan Marshall
Founder of Plain Jane ($275K/month)
"We funded the company from savings."
Evan is the founder of Plain Jane, a CBD business that is dramatically changing the CBD market with their unique low odor Hemp CBD flower and cigarette.
Gunhee Park
Founder of Populum ($220K/month)
"When we were getting started, I invested my savings and completely bootstrapped everything."
Gunhee Park is the founder of Populum, a direct-to-consumer CBD oil business that started in 2016 and reached around $3M in annual recurring revenue (ARR).
Trey Gilliam
Founder of CBD Solutions ($7K/month)
"I ended up needing $400 for the booth rent at that show, $650 for my first order of CBD isolate to make products and $250 to buy all of the necessary things to set up my booth, like chairs, tables, and a couple of banners with my logo on them."
Trey Gilliam is the founder of CBD Solutions, a CBD retail business that he started just over a year ago, generating around $7,000 in gross monthly revenue.
jackson jesionowski
Founder of CannaFacturer ($74K/month)
"When I started FullBodyZen, the initial costs were really minimal. The MVP took just two weeks to build and cost only $400. I registered the domain and it cost $12.99. It really didn't cost much, I reinvested the funds right away buying people's empty pods and stocking the vending machine I had placed in the fraternity right away."
Jackson Jesionowski is the founder of FullBodyZen, a CBD/HEMP manufacturing company that started in 2019 and now generates $17K per month in revenue.
Rod Glupker
Founder of CBD Store of Michigan ($20K/month)
"Launching a business with no money. I mean NO money was not easy. We had started with the 3 bottles that were free. That gave me $180 to order 6 bottles and then 12 bottles and 24 bottles, etc."
Rod Glupker is the founder of CBD Store of Michigan, a CBD retail business with a storefront and e-commerce site. They currently carry over 60 brands of CBD products.
Mark Maher
Founder of Beyond Botanicals ($300K/month)
"We started with a $7,000 loan, which we repaid within 6 months. Otherwise, we’ve bootstrapped everything else ever since."
Mark Maher is the co-founder of Beyond Botanicals, a CBD Manufacturing company in the USA that focuses on Private Label CBD, Wholesale CBD, and its own best-selling line of premium quality CBD products.
Lauren Kay Forsch
Founder of Popped.NYC ($20K/month)
"I exchanged $400 for a bundle of vape cartridges. Then I purchased a sign for $50 and rented a booth at Hester Street Fair for $85 + table and chair."
Lauren Forsch is the founder of Popped.NYC, a CBD products business in the health and wellness industry.
Stacy Moore
Founder of Healing Harbors ($18K/month)
"Initial costs were higher than they should have been because we didn't know what we know now and hadn't scaled our business yet. We eventually brought most manufacturing in-house, costing us around $50,000."
Stacy Moore is the founder of Healing Harbors, a CBD personal care and pet products business that specializes in high-quality, responsibly sourced ingredients for consumers.
Jacob Meyers
Founder of elate ($3K/month)
"Once the labels checked off-brand and legal guidelines my first round of product was officially complete, $12k plus a ton of sweat equity and I was off to the races."
Jake Meyers is the founder of elate CBD, a premium CBD brand on a mission to shatter the cannabis stigma, started in 2020.
Yanet Caliz
Founder of Gold Spectrum ($25K/month)
"The startup cost is almost always more expensive initially, particularly because my initial orders were low quantities, but it gets more cost-effective as demand increases."
Yanet Caliz is the founder of Gold Spectrum Lifestyle CBD Brand, a CBD business that launched during the COVID-19 pandemic and makes an average of $20,000 per month.
Enjoyed reading these real world examples?
Our platform is full of case studies of successful CBD businesses that you can learn from.
Starting a CBD business - what you should know:
Initial Costs and Compliance
Starting a CBD business can be financially demanding, with initial costs ranging anywhere from $10,000 to upwards of $100,000. Initial expenditures include licensing and permits, which can cost between $500 to $5,000 depending on your location and the extent of local regulations. Compliance with state and federal laws is also crucial, and you may need to invest an additional $15,000 to $50,000 in quality testing and legal consultations.
Product Sourcing and Manufacturing
Sourcing your CBD from reputable suppliers can significantly impact your budget. High-quality, organic CBD extracts typically cost between $1,000 to $3,000 per kilogram. On the other hand, white-labeling your products – buying already-manufactured goods and rebranding them – can lower upfront costs to around $5,000 to $20,000, depending on the volume and complexity of your product line.
Marketing and Branding
Marketing a CBD business requires a significant investment in branding and digital advertising. Expect to spend at least $2,000 to $10,000 on website development and graphic design. Additionally, monthly digital marketing expenses for SEO, social media, and content creation can range from $1,000 to $5,000. Keep in mind that strict advertising regulations can increase these costs as you navigate compliant channels.
Distribution and Sales Channels
Deciding on your sales channels also affects your budget. Selling CBD products online has lower overhead costs compared to opening a physical storefront, which can easily cost between $50,000 to $100,000 in setup and initial inventory. However, e-commerce platforms and payment processors often charge higher fees for CBD transactions, so factor in transaction fees that may range from 3% to 6% per sale.
Insurance and Risk Management
CBD businesses face higher risks, so securing comprehensive insurance is essential. General liability, product liability, and property insurance can collectively cost between $3,000 and $8,000 annually. Higher-risk categories, like ingestible CBD products, may face premiums on the higher end of this spectrum. Consider setting aside a contingency fund for unexpected legal or regulatory issues.
By understanding these nuanced cost factors, you can better prepare financially and strategically for starting a CBD business.
Potential Costs of Starting a CBD Business
Starting a CBD business involves numerous costs ranging from licensing and product testing to marketing and website fees. Below is a detailed breakdown of the potential costs you may encounter:
| Expense Category | Description | Estimated Cost Range |
|---|---|---|
| Licensing & Permits | Fees for obtaining necessary licenses and permits to operate legally | $500 - $2,500 |
| Product Formulation | Research and development costs for creating CBD products | $10,000 - $50,000 |
| Third-Party Lab Testing | Ensuring product safety and compliance with legal standards | $1,000 - $5,000 per batch |
| Product Manufacturing | Production costs depending on the scale and type of products | $5,000 - $20,000 |
| Packaging Design | Design and production of product packaging | $1,500 - $5,000 |
| Branding & Logo Design | Professional logo and brand identity creation | $500 - $5,000 |
| Website Development | Costs for creating an e-commerce website | $1,500 - $10,000 |
| Hosting Fees | Monthly fees for website hosting | $20 - $100 per month |
| SSL Certificate | Security certificate for the website | $50 - $200 per year |
| E-commerce Platform Fees | Charges from platforms like Shopify, WooCommerce, etc. | $30 - $300 per month |
| Inventory Costs | Initial stock of CBD products | $5,000 - $30,000 |
| Marketing & Advertising | Costs for digital marketing, SEO, social media ads, etc. | $2,000 - $15,000 per month |
| Legal Fees | Lawyer fees for compliance, business setup, and contracts | $2,000 - $10,000 |
| Accounting Services | Fees for bookkeeping, tax preparation, and financial planning | $1,000 - $5,000 annually |
| Labor Costs | Salaries for staff such as customer service, marketing, etc. | $3,000 - $10,000+ per month |
| Office Space | Rental costs for an office or retail space | $1,000 - $5,000 per month |
| Insurance | Business insurance to cover liabilities | $500 - $2,000 annually |
| Shipping Costs | Costs for shipping products to customers | $500 - $2,000+ per month |
This table outlines the primary expenses you may face when launching your CBD business. It is crucial to plan and budget carefully to ensure a successful startup.
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
