Your CBD business plan has to cover a lot of ground. Regulatory hurdles. Supply chain inconsistency. Marketing restrictions. And even if all those issues are addressed, you still have to create a credible brand in a crowded marketplace.
Fortunately, GemmaCert is here to help. We’ve assembled this guide with valuable information for creating a great CBD business. Because our executive team has extensive experience in the dietary supplement industry — and because CBD is regulated like a dietary supplement in many
jurisdictions — we can help CBD businesses navigate the market.
2. 2 | THE CBD MARKETING GUIDE
If you’re entering the CBD market — or you’re already
producing CBD or CBD products — you know the pitfalls
and challenges of the business. But the upside could make
the risks very worthwhile; the market for CBD-infused
products could reach $22 billion by the year 2022, according
to Brightfield Group.1
Your CBD business plan has to cover a lot of ground. Regulatory hurdles.
Supply chain inconsistency. Marketing restrictions. And even if all those
issues are addressed, you still have to create a credible brand in a
crowded marketplace.
Fortunately, GemmaCert is here to help. We’ve assembled this guide
with valuable information for creating a great CBD business. Because
our executive team has extensive experience in the dietary supplement
industry — and because CBD is regulated like a dietary supplement in many
jurisdictions — we can help CBD businesses navigate the market.
3. EFFECTIVE TACTICS FOR CBD BUSINESS SUCCESS | 3
What Qualifies as a
CBD Product?
Ironically, many regulators
characterize CBD products by
what they don’t contain: THC. CBD
cannabis, CBD extracts, and CBD
edibles must contain only trace
amounts of THC to be sold legally
in many jurisdictions.
Most countries require licenses
for cultivating or processing CBD
materials, but local laws often
contradict national regulations. In
other jurisdictions, CBD-containing
hemp is only legal for industrial
purposes, like paper production,
while ingestible products remain
illegal. In still other areas, THC-
containing marijuana is legal for
recreational purposes.
LEGALITY AND CLASSIFICATIONS
Regulatory uncertainty plagues us with good reason. As cannabis professionals, many of our business
activities would have been illegal just a decade ago. In one way, the growing pains we’re experiencing
are a great thing — if we can keep ahead of the changes.
Non-intoxicating cannabidiol (CBD) leads the charge towards cannabis normalization, but the laws
governing its production and sale haven’t become any clearer. In fact, they’re more confusing than ever.
Why is CBD Sometimes a Drug and Sometimes Not?
A pharmaceutical drug undergoes
extensive clinical studies before reaching
the market. The expense of the research
is absorbed by the drug manufacturer,
who ultimately patents the drug and has
exclusive rights to its production.
In the case of CBD, things work
differently. Some manufacturers have
jumped through the legal hoops to get
a particular cannabinoid formulation
approved as a prescribable drug for a
particular condition, like certain forms
of childhood epilepsy. That means the
company’s unique formulation and
delivery mechanism (e.g., tincture, tablet,
cream) is approved by the regulatory
body, such as the United States Food
and Drug Administration (FDA).
It’s Not a Drug, and It’s Not a
Supplement. So What is CBD?
If you’re in the United States, your CBD
product hasn’t been acknowledged
as a food supplement, but it’s being
regulated in a similar fashion. The FDA
classifies CBD as “generally regarded
as safe,” like the herb ginkgo biloba
or cyanocobalamin (vitamin B12). The
non-drug status of these supplements
avoids pharmaceutical-level scrutiny
but blocks opportunities to explain
the products’ benefits. That’s because
CBD products cannot claim to treat any
disease or condition.
Supplements are loosely regulated,
and the FDA does not require potency
testing to verify a product’s contents
match the label. Like supplements, CBD
also goes untested. And, unfortunately,
some supplement products have
been found to contain none of the
advertised ingredients.2
This is a threat
to consumers because inconsistent
potency and unidentified ingredients
can create adverse reactions and poor
therapeutic outcomes.
CBD products must contain:
<0.1% THC in the
United States
<0.2% THC in the
European Union
<0.3% THC in Canada
THC LIMITS
BY COUNTRY
LAWS IN THE
UNITED STATES
Recently, the United States
Drug Enforcement Agency,
changed the classification
of CBD from a Schedule I
drug (illegal) to Schedule V
(a controlled substance with
limited potential for abuse), if
the CBD products contain no
more than 0.1% THC and are
produced under license. Later
the same year, the 2018 Farm
Bill legalized the production of
CBD-hemp, provided the plant
contained no more than 0.3%
THC and was produced by a
licensed cultivator. This is quite
an evolution from the 2014
Farm Bill, which legalized hemp
for industrial uses like fiber and
paper, but did not address CBD
or consumable products.
4. 4 | THE CBD MARKETING GUIDE
RETAIL PARTNERS
Local, brick-and-mortar retailers can
provide in-person sales assistance
and connect customers with your
product. Supplying retail associates
with personal samples of your product
is a good idea; brands report a boost in
sales when using this tactic.
Alternately, online sales are lucrative.
Without the middleman, profits are
higher. But the online market is
crowded with manufacturers, and
consumers have less confidence in
the product because of documented
potency variations. If you choose to
market online, you’ll need top-notch
content, expert SEO, and a strong
social media presence.
NAVIGATING THE CBD SUPPLY CHAIN
EXTRACTION AND
PROCESSING PARTNERS
Working directly with the isolate or
oil extract CBD simplifies production
for many companies. If this is
your plan, look for processors or
wholesalers who offer a Certificate
or Analysis (COA) with their
products. The COA should confirm
potency and, ideally, verify the
absence of pesticides and heavy
metals, which often concentrate in
extracts. Ask about their SOPs and
whether they comply with good
manufacturing practices (GMP), as
their product quality affects yours.
CULTIVATION PARTNERS
Make sure to partner with reputable
growers or wholesalers who are
appropriately licensed. Whether
you’re deriving your cannabinoids
from hemp or marijuana, look for
pesticide-free or organic growing
practices. Ask for recommendations
from their other clients. Ask if
they have documented standard
operating procedures (SOPs), and if
they comply with good agricultural
practices (GAP). Also, any partner’s
supply capabilities should also match
your production demand. Alternately,
establish multiple supply channels.
As a CBD product manufacturer, your business partners matter. If you’re a vertically integrated
company, many of the supply chain dynamics that apply to partnerships will also apply to the
stages of your logistics.
5. EFFECTIVE TACTICS FOR CBD BUSINESS SUCCESS | 5
The potency of cannabis is naturally
variable, or non-homogeneous.
Potency varies between strains,
between crops, between plants, and
between the buds of a single plant.
Within a single crop, some flowers
may be more potent; others may test
several percentage points lower for
THC or CBD. That spells trouble for
cannabis purchasers and consumers.
So, how can a single test represent
the potency of a large crop of
cannabis? In short, it can’t. Any
single flower from a batch will test
differently than the others, with some
In the process of purchasing,
processing, and manufacturing,
you’ll need to continually test
the potency of your input
materials and final products.
Mostly, you’ll be analyzing CBD
potency but trace amounts of
THC are a legal concern also.
GemmaCert’s near-infrared
spectrometry (NIRS) testing
lessens the chance of testing
“hot” for THC in CBD products.
The GemmaCert unit primarily
tests for higher cannabinoid
concentrations but, because
the unit can reliably test
cannabinoid concentrations
below 1% by weight, it can
help flag THC problems.
As you test multiple samples,
a single THC result indicates
there are probably issues
with the entire
batch. At that
point, you should
employ a third-
party lab for more
extensive testing.
THE GEMMACERT
DOUBLE-CHECK
FOR THC
THE PROBLEM OF
UNPREDICTABLE POTENCY
Potency inconsistencies are rampant in the CBD market.
Untested and improperly tested crops make wholesale transactions
treacherous. Stakeholders simply don’t know what they’re buying.
Eventually, it all trickles down to the consumer.
In 2017, academic research documented that 69.05% of CBD products
sold online were inaccurately labeled.3
And, in 2019, a team of
investigative journalists found that 57% of the products which they
tested contained less than half of what was claimed on the label.4
Cannabinoid Non- Homogeneity and the Potency
Testing Solution
6. 6 | THE CBD MARKETING GUIDE
a batch of cannabis, we have to
average the results of multiple tests.
Near-infrared spectrometry is the
ideal testing method for solving
this problem. NIRS is acceptably
accurate for many industrial uses,
but it’s especially well-suited to
materials like cannabis, which vary
in chemical concentrations.
NIRS testers, like the GemmaCert,
achieve superior potency
representation than HPLC, even
though HPLC is more accurate for
one sample. By analyzing many
flowers quickly and averaging the
results, it provides more insight into
the overall potency of the batch.
more potent and others less. What
matters is getting a good estimate to
represent the whole batch.
The industry-standard testing
technology, high-pressure liquid
chromatography (HPLC), is extremely
accurate (assuming the analysis is
conducted by a skilled technician,
on a calibrated device, applying a
validated testing protocol, at an ISO
17025-certified laboratory). But what
if you happen to test the least potent
flower in a batch?
Ultimately, multiple tests are needed
to assess the batch’s potency. Yet
HPLC is too slow and too expensive
to run multiple tests. To achieve a
representative potency number for
So, how many NIRS tests
equal the representative
precision of an HPLC test?
It depends on how much
cannabis potency varies
within a batch.
To find out how much
cannabis potency varies
within a batch, GemmaCert
scientists HPLC-tested over
1,500 samples. Based on how
much the strains’ potencies
varied, the statistics showed
that — even though NIRS
is a little less accurate than
HPLC — NIRS creates a more
representative result in less
time, and costs less too. It
works by running several
quick tests and averaging the
result. Given the documented
potency variance of the
cannabis tested, for example,
three tests with the NIRS
tester equaled one test
with HPLC on dominant
THC strains.
For more information on
this research, reference
our white paper, “Cannabis
Potency Variability and
Cost-Effective Testing.”
GEMMACERT’S
ORIGINAL
RESEARCH
7. EFFECTIVE TACTICS FOR CBD BUSINESS SUCCESS | 7
INACCURATE LABELING
OR DIRECTIONS
The FDA also issued warnings
regarding labeling. Product labels
must clearly identify the products’
contents and concentrations.
According to the 2017 FDA warnings,
they must also include “adequate
directions for a layperson to use your
products safely for their intended
purposes.” 4
Potency testing plays an
important role in accurate labeling.
UNLICENSED PRODUCTION
OR PROCESSING
Cultivators, processors, and product
manufacturers must be licensed in
most jurisdictions. Often, multiple
licenses are necessary to meet the
needs of federal and state/provincial/
municipal authorities.
NO EFFICACY CLAIMS
Promotions may not legally include
any language implying that a product
cures, prevents, or treats any
disease or condition. Statements
such as “helps alleviate arthritis
pain,” “minimizes seizures,” or “kills
tumor cells” are illegal in the US
and elsewhere, even if research
documents the claims as legitimate.
LEGALLY MARKETING YOUR PRODUCT
In general, it’s hard to market cannabis products. Traditional avenues of print, product
placements, and social media are usually off limits. But there are some ways to promote
your CBD product — and some important things to avoid.
What’s NOT Legal?
MOST TESTIMONIALS
ARE ILLEGAL TOO
According to the FDA, benefit claims
apply to third-party testimonials
too. In 2017, the FDA again issued
warning letters to CBD companies.
The customer testimonials which
companies had re-posted to their
social media accounts were noted
as violations.5
8. 8 | THE CBD MARKETING GUIDE
Branding for Your Niche
Why should you choose a niche and
limit your potential customers to one
market segment? CBD is increasingly
popular, and CBD product
manufacturers are increasing in
number. Savvy marketers know that
in a crowded marketplace, choosing
a niche is advantageous because it
helps connect deeply with a subset of
customers, rather than attempting to
be everything all at once. Specializing
in one sub-market often creates more
success than trying to generalize
across multiple audiences.
Within the CBD market, viable niches
now include:
»» Sports-oriented products
»» Feminine products
»» Pet products
»» Sleep products
»» Energy Products
»» Cosmetics
»» Dermal products
Branding: The Best Way
to Promote CBD Products
“Branding” is the process of creating
a marketable personality for an
organization. And branding is critical
when marketing dietary supplements
and CBD products.
Here’s why branding is so important:
cannabidiol is a commodity like
any other chemical compound. In
its purified form, crystalized CBD
is identical across all suppliers.
What makes the difference in the
marketplace is product presentation,
otherwise known as branding.
“But How Can Other
Companies Claim Their
Products Cure Disease?”
They can’t. At least not legally.
Many CBD companies continue to
make efficacy claims, and the FDA
continues to issue warnings. CBD
products may not claim to be a
drug or a dietary supplement, nor
may they claim to “diagnose, cure,
mitigate, treat, or prevent a disease.”
Yet regulatory bodies like the FDA
have limited resources to police the
CBD industry, which continues to
grow rapidly. The advertisements
making bold claims will necessarily
draw more unwanted attention from
regulators. So, some companies take
the risk of making moderate claims
relative to others in the marketplace.
Make sure to promote your
products carefully, with these
laws in mind. Consult with a local,
cannabis-specialized attorney to
ensure that your advertising isn’t a
threat to your business.
1. Non-GMO
2. No Pesticides
3. Potency Tested
4. Tasteless/Odorless
5. Tastes Great
6. No THC
7. Easy to Us
8. Extracted with Clean CO2
EXAMPLES OF GOOD
PROMOTIONAL CLAIMS
CBD is a commodity product, just like vitamin C
9. EFFECTIVE TACTICS FOR CBD BUSINESS SUCCESS | 9
Know Your Customer
Make sure to take the time to research
your customer base, or demographic.
Knowing your ideal customer’s age,
occupation, interests, and buying
habits will focus your marketing
budget and increase your results.
Primary Research: Primary research
is the research you do yourself. This
includes interviews with your customers
to understand the market and research
to investigate what consumers are
saying on internet forums.
Secondary Research: Secondary
research comes from government
census sources, marketing
organizations and — in the case
of the cannabis industry — data
The same CBD delivery mechanisms
apply to multiple niches. Regardless
of the consumer base, products
often include topical skin products,
tinctures, edibles and beverages,
vaporizer cartridges, vaporizer oil,
and high-CBD cannabis flower. The
difference in branding often stems
from content marketing topics,
advertising, and the spokespeople
who may be promoting the product.
If you choose to market within a
niche, that niche should resonate with
your personal interests or those of
your team. It’s easier to connect with
your audience if you’re one of them.
Content creation for your website will
come more naturally as a result, and
your social media activities will feel
like fun.
In the dietary supplement industry,
many consumers choose quality over price
NEW
FORMULATIONS
Increasingly, CBD product
manufacturers are
compounding other dietary
supplements into their
products. Melatonin, caffeine,
and vitamins are popular
additions. Combining other
ingredients with CBD helps to
establish your niche and your
product’s application.
collected by Marijuana Business
Daily, as published in the Marijuana
Business Factbook, or research by
the Brightfield Group. These sources
can give you insight into market
trends and consumer behavior.
10. 10 | THE CBD MARKETING GUIDE
Your Brand’s Label
and Graphic Design
The graphic design scheme you
choose should be distinctive and
match the personality of your target
customer. For some demographics,
that may mean energizing colors
and bold fonts; for others, a
pharmaceutical presentation may be
more appropriate.
An example of an effective product
label is pictured below. Depending
on your product type (i.e., capsules,
tincture, etc.) it may need the
following elements:
1. Principle Display Panel (PDP):
A principle display panel lets
customers know exactly what’s in
your product. That includes the
quantity of each active ingredient
per dosage, the number of doses
per container, and how many
units comprise a dose (e.g.,
two capsules). It also includes
the inactive ingredients, like
medium chain triglyceride oil
or gelatin. The type of principle
disply panel shown here may
not be appropriate for all
products, like topical creams,
but it’s still important to include
the quantity of CBD, either per
dose or per package.
2. Potency Assurance: A label stating
the product was “Batch tested
with NIRS technology” creates
consumer confidence. Near-
infrared spectronomy (like that
offered by GemmaCert) works well
for this because it’s quick and easy.
3. Directions: Your products
directions should clearly state
how to consume the product and
how frequently. Directions are
an important part of your label
for regulatory compliance and
consumer safety.
4. Warnings: Include a statement
such as “These statements
have not been evaluated by
the FDA. This product is not
meant to diagnose, treat, or
cure any disease.
5. Batch Number: These are
necessary for inventory tracking
or recalls.
6. Manufacture and Expiration Dates
7. Company Name and Address
Recommended Use*
Shake well before each use. Use once or
twice daily as needed. Place under tongue,
hold for 60 seconds then swallow. Keep at
room temperature to preserve freshness.
Store away form humidity, heat and light.
Do not refrigerate. If any adverse reactions
occur, discontinue use of dietary supplement
and consult your doctor. CBD (Cannabidol)
is a natural constuent of hemp oil. Each
servicing contains 10mg CBD.
Batch tested with NIRS technology.
Batch number: 345349M
WARNING: KEEP OUT OF REACH
OF CHILDREN. CONSULT YOUR
HEALTHCARE PROVIDER BERORE
TAKING IF YOU ARE PREGNANT OR
NURSING, OR HAVE ANY OTHER
MEDICAL CONCERNS.
*These statements have not been evlauated
by the Food and Drug Administration. This
product is not intnended to diagnose, treat,
cure or prevent any diseases.
Ingredients: Grape Seed Oil,
Peppermint Oil, Phytocannabinoid
Rich Hemp Oil
Supplemental Facts
Serving Size 1 dropper (1mL)
Servings Per Container 25
Amount Per Serving %DV**
Calories 9 Calories from Fat 9
% Daily
Value*
Total Fat 0.9g
Linoleic Acid 405mg
Oleic Acid 90mg
*Percent Daily Values not established.
**Percent Daily Values (DV) are based
on a 2,000 calorie diet
CBD Drops
PHYTOCANNABINOID-RICH
PEPPERMINT FLAVOR
CBD Company
2844 Green Dr. • Boulder, CO 80304
www.cbdwebsite.com
1
2
3
4
5
Manufactured in USA. April 2019
Expires April 20206
7
11. EFFECTIVE TACTICS FOR CBD BUSINESS SUCCESS | 11
A Brand is Trust
Regardless of your niche, your
branding is important to establish trust.
Consumers want to feel confident that
they’re purchasing a quality product
from a reputable manufacturer.
In the dietary supplement industry,
consumers often choose quality
over price — and with good reason.
Because dietary supplements are
often untested, potency is doubtful.
And some products are adulterated
with other ingredients which may
be harmful.
So, make sure to create a quality
product and sustain excellent
manufacturing standards. A
dietary supplement brand cannot
survive without positive customer
outcomes, and neither can a CBD
manufacturer. The best marketing
and branding will not sustain a poor
or inconsistent product.
Make sure to comply with good
manufacturing practices. And create
SOPs and to have onhand in physical
and electronic forms. Integrating SOPs
into employee training is the only way
to ensure you’re producing a quality
product every batch, and regulators
often require SOPs onsite in physical
— rather than electronic — form.
A Scientific Orientation
Strengthens Your Brand
Regardless of your niche, sharing your
CBD knowledge bolsters your brand.
Consumers have a lot to learn about
CBD, and content marketing is a way
to help them understand their choices
and also an opportunity to build trust.
Many people don’t know that there’s
already extensive research into the
effects of CBD. Universities have
studied how CBD interacts with our
nervous systems and how it may
help treat many forms of cancer and
epilepsy.6, 7
Carefully citing academic
research is a low-risk way of making
efficacy claims. And explaining how
the body’s endocannabinoid system
works presents no risk at all.
Your brand inspires trust when
you teach customers about CBD
in general, and when it’s time to
buy, your brand will be top-of-mind.
Reference the website ProjectCBD.
org for links to the latest research.
Leading companies may choose to
fund their own CBD research studies.
Doing so can secure brand identity in
the market. And while CBD research
is already extensive, it’s vital that
we deepen our condition-specific
understanding of its benefits.
Testing is Excellence
Ensure your brand becomes an
industry leader by striving for
excellence in all your business
processes. At GemmaCert, we believe
testing helps. Every stage of your
production process can benefit from
testing practices and, ultimately,
testing benefits consumers through
more consistent, safer products.
For more information on what quick
and easy testing equipment can do
for you, contact GemmaCert Ltd.
at info@gemmacert.com
A label stating your
product was “Batch
tested with NIRS
technology” creates
consumer confidence
12. 12 | THE CBD MARKETING GUIDE
Company Bio
GemmaCert is an Israeli life science company established in 2015 with the objective of setting a quality standard
for cannabis for the benefit of consumers and patients worldwide. GemmaCert’s proprietary smart solution for
testing cannabis composition and potency is simple and sleek, made for everyday use, requires no specific skill-
set for operation, and its form gives little indication of the sophistication of the technology working underneath.
GemmaCert is making a name for high performance, robustness, ease-of-use and reliability, with units in
operation at multiple locations globally, including in North America and Europe.
www.gemmacert.com
DISCLAIMER
Information in this document is subject to change without notice and does not represent a commitment by
GemmaCert Ltd. GemmaCert Ltd is not liable for errors contained in this document or for incidental or
consequential damages in connection with furnishing or use of this material. GemmaCert products are protected
by U.S. and international copyright laws.
13. EFFECTIVE TACTICS FOR CBD BUSINESS SUCCESS | 13
SOURCES
1. Gomez, B. CBD Market to Reach $22 Billion by 2022. Brightfield Group. 2018
2. New York Attorney General. A.G. Schneiderman Asks Major Retailers To Halt Sales Of Certain Herbal
Supplements. 2015.
3. Bonn-Miller, M. Labeling Accuracy of Cannabidiol Extracts Sold Online. 2017.
4. Krauth, D. ‘Patients Are Being Duped.’ NBC Miami. 2019
5. U.S. Food and Drug Administration. Warning Letters and Test Results for Cannabidiol-Related Products.
Accessed March 10th, 2019.
6. Paola, M. Cannabidiol as potential anticancer drug. 2013.
7. Porter, B. Report of a parent survey of cannabidiol-enriched cannabis use in pediatric treatment-
resistant epilepsy. 2013.
14. TRADEMARKS AND COPYRIGHT
GemmaCert is a Trademark of GemmaCert Ltd.
Copyright @ 2017 GemmaCert Ltd. All rights reserved
BR
OUGHT TO YOU
BY
Ltd.