How to Enter the CBD Industry: Making CBD Oil for Commercial Use


  • Last modified: January 20, 2021

Going into the CBD industry is becoming more accepted in the mainstream marketplace and making CBD oil for commercial use is as well. Cannabis oil has a lot of possible therapeutic and health benefits that are talked about and studied. It can be found in tinctures, edibles, topicals, and cannabis concentrate, just to name a few of the products. The marijuana industry is beginning to grow quickly.

With this growth comes many who want to join in and start a CBD business. If this is your goal, then there are lots of things to be done along with making a quality CBD oil product.

CBD

CBD is one of many cannabinoids that are in cannabis and hemp plants. It does not give the user an intoxicating effect as a product with THC content does. It offers potential health benefits and opportunities for research into what it can do.

Products that are made with CBD happen in multiple steps. Large amounts of raw material such as industrial hemp need to be obtained. Once that happens, then CBD oil is extracted using processes such as CO2 extraction. Once the oil is ready, then it can be sold to others as either a concentrate or as an infusion.

CBD can be extracted from both hemp and cannabis plants for products but if a business wants low THC, then it should come from industrial hemp. Hemp has been removed from the Schedule 1 list of the Controlled Substances Act so it can be used for legalized use and can be harvested.

Full Spectrum versus CBD Isolate

If CBD has other cannabinoids and terpenes from the plant, then this is called full-spectrum CBD. It will have a flavor profile, smell, and specific traits from the plant. A CBD isolate only has CBD and nothing else. While purity sounds good, some say the full spectrum offers the Entourage Effect with more benefits, but this is still being studied.

The CBD Industry

This industry is growing as people are more excepting of what CBD is purported to be able to do. New products are hitting the marketplace all the time. Popular items such as tinctures, edibles, vape concentrates, topicals and capsules are all part of the market. It can be used for both humans and pets. All are something to consider when entering the CBD industry and making oil for various commercial uses.

Starting a CBD Business

While the marketplace is getting busy, starting the CBD business takes lots of hard work any new business would but also the ability to work with a regulatory landscape that is constantly shifting. Get a solid business plan in place, find and obtain insurance and then work through all the regulatory issues.

When starting a CBD oil business, there are legal obligations that have to be met under the FDA (Food and Drug Administration). There is no marketing allowed that claims the medical or health benefits of CBD and beverages and food that are infused may be problematic as well. There is a cross-product issue as there are medications that use CBD, so it’s a bit problematic from a food perspective.

Knowing the company’s legal obligations are important, so have legal counsel and business professionals who know the rules. It is important to start on the right foot and stay legal while being able to assess and understand any new developments that come forward.

Making CBD for Commercial Use

Knowing how to make CBD oil for commercial use shows a complex process. It goes from hemp cultivation to its extraction and refinement. There has to be a reliable supply chain that offers quality products for the process. Here are the steps:

1. Raw material tests – This must happen when raw hemp is received. It has to be tested for purity. The testing must also be done on any materials used in production.

2. Hemp oil extraction – This is where the hemp flowers are ground up to increase the surface area. Once they are crushed, then they go to the extraction machine where CO2 or other solvents are used to obtain the extract. The extract is then moved to the next stage.

3. Filtering and dewaxing –The oil that has been extracted is dissolved in a food-grade solvent and frozen. This helps remove wax and impurities. The oil will be purer. If this oil is found suitable by a technician, then it is filtered. It can be done by wintered, vacuum, pour through, or gravity filtration. This can be done repeatedly until the right level of purity is obtained.

4. Distillation – This takes out any impurities that are still there. It is a critical stage and must be done by someone with experience. Companies can lose cannabinoids and terpenes if done incorrectly. Temperature, circulation and vacuum movement are needed to create the purest oil possible.

5. Isolating CBD – Getting 99.5% isolation needs special equipment and trained techs. A combination of distillation and chromatography processes with solvents are required. This is done until the purity level is right.

6. Product – This is when commercial products can be made from CBD oil, capsules, creams, gels, and more. This is where potency tests can be used as well.

7. End product testing – This is where the CBD product is tested for heavy metals, microbes and pollutants. It must be safe for the public.

CBD Business Challenges

  • Banking–Regulatory issues can limit bank access due to risk and required oversight. There are struggles to maintain merchant accounts.
  • Insurance – Affordable insurance is hard to find due to misinformation and lack of hemp education.
  • Payment processing – High fees and limited access to credit card companies due to CBD being the primary business.
  • Capital – Mainstream banks are not easy to find for funding as CBD companies are seen as high risk and bogged down in regulatory requirements.

These should get better as regulations become clearer and CBD becomes more accepted by the mainstream markets.

Final Thoughts

The CBD industry offers a great opportunity to those who can do their due diligence and think creatively. There are possibilities to make CBD oil for commercial use and make a great profit as well. Do the homework, follow the steps to make a great product, and stay flexible with the changing marketplace so you can enter the CBD industry and successfully make CBD oil for the many commercial markets that are looking for it.

Andrew Lawrence

Andrew Lawrence is the Co-founder of Cannabis Stack. He is a dedicated and experienced entrepreneur, angel investor, and growth marketing professional for a wide range of businesses and clients across different industry sectors, including the Cannabis Industry.


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