The CBD industry is on the rise; it’s expected to grow at a compound rate of nearly 22 percent in the next five years.
With health benefits like reduced anxiety and depression, pain and appetite management, and even increased relaxation, it’s no wonder more people are taking advantage of the new compound. And as a convenience store owner, selling CBD could greatly increase your profitability and help bring in new customers. But how do you get started?
This article shares how to get a license to sell CBD products, where you can sell them, and other considerations to keep in mind while diving into CBD sales.
How To Get a License To Sell CBD Products: 5 Steps
Before we get into the steps to sell CBD products, let’s discuss CBD in general. First and foremost: What is CBD? Derived from hemp, Cannabidiol (CBD) is different from traditional marijuana products. These products contain little THC, which is the psychoactive component of marijuana products.
The 2018 Farm Bill federally legalized hemp CBD products with under 0.3% THC, but many states have their own restrictions around sales. Some fully embrace CBD commerce, others allow it with strict oversight, and a handful still prohibit sale altogether. For example, Idaho, Nebraska, and South Dakota do not allow CBD to be sold by retailers.
Related Read: High-Risk POS for Convenience Store: 3 Best Providers
In most states allowing CBD sales, you will need the proper licenses and permissions to sell these products in your store legally. Common convenience store requirements include general business licenses, resale licenses to sell third-party CBD goods wholesale, and any state-specific CBD retail licenses mandated in your region. Some states also require age verification technology like barcode scanners to confirm legal sales.
With careful research into state CBD policies, the proper licenses secured, and validated products from wholesale CBD providers, you can add legal hemp offerings to your convenience store's shelves. As an emerging category with devoted fans, CBD can attract new customers while boosting basket sizes and profits, offering you a new revenue stream for your business.
Let’s examine the five steps every convenience store owner should follow when considering selling CBD products in their shop.
1. Determine CBD Sales Requirements for Your State
As mentioned in the above section, CBD requirements vary wildly by state. So, before selling any CBD, thoroughly research your state and local laws. If legal, understand all licensing, labeling, testing, and documentation required to legally and safely sell CBD products in your convenience store. Consult an attorney familiar with CBD regulations to ensure full compliance.
For example, while CBD itself may be legal for sale, regulations might prohibit the sale of CBD vaporizers, tinctures with specific ingredients, or ingestible CBD products like gummies. Carefully review labeling requirements for CBD content, sourcing, and warnings. Any product testing, vendor due diligence, or required documentation should also be examined.
Finally, remember that regulations and requirements may change over time. While more states are loosening restrictions on CBD sales each year, individual municipalities may pass additional regulations. Plus, new federal regulations related to CBD products may emerge.
Regularly check state and local sites for the latest rule changes, so your CBD merchandise and sales processes remain fully compliant.
2. Understand Your Convenience Store Business Structure
Another thing to keep in mind related to your convenience store’s CBD sales is your existing business structure. Many convenience stores operate as sole proprietorships, partnerships, LLCs, or corporations. Each entity type requires slightly different application and reporting processes around CBD sales. Review your current business formation and determine if any changes may ease licensing and compliance.
Related Read: Building a Convenience Store Inventory List? 7 Essentials Your Store Needs
For example, incorporating as an LLC caps owners' personal liability and may simplify documenting store ownership shares, earnings distributions, and other financial data often required for local business permits. Consult an attorney and accountant to decide if modifying your entity best supports CBD sales licensing while limiting tax burdens and personal liability.
No one business structure is the right choice for every convenience store. Ultimately, choose the path that reduces legal and financial risk should issues arise with product suppliers or local regulators.
Finally, ensure your business information — ownership, EIN, addresses, etc. — is consistently represented across all documentation. Inconsistent records can complicate applications and renewals for sales permits.
3. Register Your Employer Identification Number
Securing an employer identification number (EIN) from the IRS is crucial for paying taxes on CBD income, which regulations require in legal sales states. Depending on your business structure, you may already have an EIN, but if you operate as a sole proprietor, you should apply for an EIN before attempting to sell CBD products.
Related Read: Small Business Tax Preparation Checklist for New Business Owners
Some states mandate CBD retailers provide an EIN specifically tied to hemp distribution on applications, too. Even if already incorporated, confirming IRS receipt of a clearly CBD-linked EIN helps demonstrate total commitment to transparent commerce and tax compliance regarding your CBD sales.
4. Set Up a CBD-Specific Merchant Account
A merchant account is critical for any business. You likely already have a merchant account and business credit card for your convenience store. However, many banks still avoid CBD accounts amid ongoing legal uncertainties. Specialty providers exist, focusing solely on high-risk merchant services and compliance needs of CBD sellers in approved states. They understand the intricacies of processing payments within CBD laws to simplify sales.
Rather than struggle with general banks, use CBD-friendly merchant services able to open compliant accounts with card processing abilities. Once you have your bank, take time to develop a relationship with them. Discuss unique needs around handling returns, managing restrictions by card network, and addressing changes should regulations shift.
You will also need to invest time and effort into finding a high-risk payment processor. These organizations are payment processors willing to work with businesses carrying high-risk products, like CBD, delta-8, or kratom. These steps will set you up to sell CBD products now and in the future.
5. Establish Relationships With High-Quality CBD Manufacturers
Last but not least, if you want to get a license and begin selling CBD products in your convenience store, you must establish strong relationships with the best CBD manufacturers possible.
With CBD commerce still maturing, thorough vetting of manufacturers is essential to ensure product safety, integrity, and legal compliance. Review lab certificates, sourcing, and processing methodologies. Favor Good Manufacturing Practice (CGMP)-compliant producers focused on quality and transparency.
Start with small batch samples from a few top prospects to assess factors like purity, concentration accuracy, packaging, and shipping. Once you’re satisfied with quality and reliability, negotiate bulk pricing and minimums.
How To Get a License To Sell CBD Products: What’s Next?
Following these five steps should give you the building blocks you need to get a license to sell CBD products. But once you have your license in hand, what’s next?
Before you can open your store, you need to have the right tools and processes in place. The most critical tool in your store operation arsenal is an advanced point of sale (POS) solution. Without the right POS system, you’ll struggle to support CBD sales and remain compliant and profitable.
A unified POS solution can revolutionize operations in your convenience store and help you keep customers happy, turn more profits, and help you grow your business. If you want a point of sale solution designed specifically for convenience stores, C-Store POS is the solution for you.
C-Store POS offers key features like flexible payments for high-risk products, integrated dual pricing, and advanced inventory management, giving you everything you need to run your convenience store more efficiently. Schedule a demo of C-Store POS today to see if our solution is right for your store.
