CBD Vertical Integration: What Does It Mean?

Buds of Medical Marijuana with stethoscope

When you’re interested in running a cannabidiol (CBD) business, now is as good a time as any. By taking the time to manage as many aspects of your CBD company as possible, you’ll have more control and will get better results.

Running a vertically integrated CBD business means that you control just about every matter,  from start to finish. Keep reading to learn more about vertical integration, what it is exactly, and how it applies to the CBD industry.

These Companies Grow and Cultivate Their Own Cannabidiol (CBD)

Learning to grow cannabis is one of the most important facets of this entire business.

Taking time out to learn about everything from choosing the best soil and fertilizer to controlling temperature and water quality will help you out when you’re trying to grow quality CBD.

Integrated CBD companies are responsible for the way that their hemp grows from the time they put seeds into the ground. Controlling and cultivating your own CBD will also provide you with the opportunity to take the best advantage of the plant’s genetics and breed it to get the desired effects that you are hoping for.

Vertical Integration Involves In-House Processing of CBD Products

A vertically integrated CBD company also handles the in-house production of your CBD products.

This production deals with properly sorting and managing how your products hit stores and in choosing the right labels and other aspects of the product.

You may also be responsible for taking the CBD from its raw plant form and extracting it into the form of an oil. From here, the CBD can be used to make vape products and edibles of all varieties.

Handling these matters in-house gives you the chance to put as many special quirks into your CBD products as you would like.

They Are Responsible for Obtaining and Maintaining CBD Licenses

When you handle your legal matters, it’s easier for you to regularly make the right decisions and avoid setbacks. Hire a lawyer that can field any number of questions that you might have.

For instance, you might wonder — “Are CBD products FDA approved?” or “What are the laws for selling CBD state by state?”. The clearer you get on these matters, the easier it’ll be for you to handle even the toughest matters of your CBD business.

The labeling that you provide to your CBD products is an essential part of the process since a mislabeled product can land you in hot water legally or could cause your products to be pulled from shelves.

Because the cannabis business exists in multiple gray areas, you need to be as detail-oriented as possible about every aspect. Following the steps to correctly get your license and making sure that your products are correctly labeled will help you out more than you can imagine.

It Means That the CBD Company Manages Their Supply Chain

Running a CBD business also means getting an idea of your supply chain needs.

The supply chain is the order of operations that takes your beauty products from your inventory room to finally arriving in people’s shopping bags or doorsteps.

When your CBD business is integrated, it affects all aspects of this supply chain. Some of the parts of a supply chain include the manufacturing process, managing your inventory, correctly forecasting and planning for demand, running a warehouse, addressing shipping and transportation, and having a quality customer care department that can handle any grievances or claims that customers have.

These Companies Have Consistent, In-House Quality Control

Companies that go the vertical integration route are involved at every leg of the trip and have better and more consistent quality control. Knowing that you have quality hemp and accurate CBD levels allows you to do right by your customers as you get results.

This quality control makes sure that your products don’t have any sort of contaminants and that they are correctly laboratory tested. This makes sure that you’re communicating in a way that is accurate and engaging.

Quality control also extends to the way that you manage your staff. Little changes can create big results with how your products are put together and sold to the public.

Vertical Integration Can Cut Costs in the Long Run

It’s important to also recognize that vertical integration in the CBD business will help you control every aspect of your costs.

You will be able to lower your overhead and improve the amount of revenue that you generate. A big part of this is that today’s vertically integrated companies have put technology to use.

Advances in technology can help reduce expenses and labor and allow your CBD company to run on a streamlined basis.

Vertically Integrated CBD Companies Rely on Consistent Marketing and Branding

Finally, vertically integrated CBD businesses will have full control over their marketing and branding. CBD relies heavily on quality marketing, due in large part to the fact that not all outlets allow you to purchase ads for it.

You will have to get creative with content marketing, e-mail marketing, search engine optimization (SEO), and other areas of branding that will pay off in droves.

Learn the Ins and Outs of the CBD Business

Vertical integration is incredibly valuable if you’re in the CBD industry trying to get a leg up on the competition. Your CBD business will be better off when you decide to run your company in this manner.

Check out some of our other posts so that you can keep learning about the CBD business.


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