How To Start A CBD Business In Florida The Right Way

Last Updated on November 20, 2024 by Corepay

With U.S. CBD sales expected to reach $16 billion by 2026, Florida remains one of the most attractive markets for CBD entrepreneurs. Ranking second in the nation for CBD sales, the state offers significant opportunities for growth, but learning Florida’s strict regulations, licensing requirements, and compliance standards is essential to launching a successful CBD business.

Given the recent developments of VIRP and the ongoing challenges of securing a reliable payment processor, starting a CBD business in Florida has become increasingly complex.

At Corepay, we put together this in-depth guide to cover everything you need about CBD licensing in Florida. We also explain why we are a great partner that can help you grow your business.

What Is CBD and Why Is It Popular?

CBD, or cannabidiol, is a non-psychoactive compound derived from the hemp plant. It is widely known for its potential health benefits, including relief from pain, anxiety, inflammation, and insomnia. Unlike THC, CBD does not produce a “high,” making it an appealing natural remedy for many consumers.

Understanding Florida’s CBD Laws and Regulations

Florida enforces strict regulations to ensure the quality and safety of CBD products. Key laws and regulations include:

• CBD derived from hemp containing no more than 0.3% THC is legal under the 2018 Farm Bill. CBD derived from marijuana remains illegal in Florida.
• All CBD products must undergo testing by a licensed third-party lab to confirm potency and ensure no harmful contaminants.
• Labels must include QR codes linking to lab results, detailed ingredient lists, and compliance information.

Step 1: Choose Your CBD Products

To start a successful CBD business, you must first decide on exactly which products you want to launch.

• Oils and tinctures
• Edibles and gummies
• Drinks
• Topicals and skin care products
• Vapes
• Supplements

Step 2: Register Your CBD Business & Receiving Your CBD License For Florida

To legally operate in Florida, you must:

• Register your business with the Florida Department of State’s Division of Corporations.
• Obtain a federal Employer Identification Number (EIN) from the IRS.
• Open a business bank account to separate personal and business finances and ensure compliance.

Step 3: Obtain LegitScript Certification

With Visa’s Integrity Risk Program (VIRP), launched on April 1, 2024, LegitScript certification has become crucial for CBD businesses. This certification helps ensure your business operates legally, ethically, and in compliance with evolving regulations.

Here’s why LegitScript certification is essential:

• Secure Payment Processing: Required by acquiring banks and processors to reduce risk.
• Ad Platform Access: Necessary for advertising on Google, Facebook, and other major platforms.
• Build Trust: Demonstrates your business meets the highest standards, enhancing credibility with customers and regulators.

The certification process involves a review of your business practices, product compliance, and documentation. Corepay can help you through this process, making it faster and more efficient so you can focus on growing your business while staying fully compliant.

Step 4: Find A Reliable Payment Processor With CBD Experience

Securing payment processing is vital for growing your business. This step is one of the most difficult when starting a CBD business due to CBD being deemed high-risk.

At Corepay, we have extensive experience here and can get you pre-approved quickly with competitive pricing.

Step 5: Obtain Necessary Licenses

Florida requires multiple licenses for CBD businesses, depending on your operations:

• The hemp cultivation license is required to grow hemp plants. Applications are free and include background checks and fingerprinting.
• The Hemp Food Establishment Permit is required for processing, manufacturing, or selling ingestible or inhalable CBD products.
• Retail and wholesale businesses require different permits, so ensure you apply for the correct one.

The annual fee for a Hemp Food Establishment Permit is $650, and businesses must meet inspection and compliance standards outlined by the Florida Department of Agriculture and Consumer Services (FDACS).

Step 6: Build Your Brand and Marketing Strategy

A strong brand and marketing strategy are essential for attracting and retaining customers. Key steps include:

• Developing a professional website with e-commerce capabilities.
• Leveraging social media platforms like Instagram and TikTok to connect with your audience.
• Participating in local events, such as farmers’ markets, to build community recognition.

Ensure all marketing materials comply with FDA guidelines, avoiding unsubstantiated health claims.

Step 7: Follow Labeling and Testing Requirements

Florida has stringent labeling and testing regulations. Labels must include:

• A QR code linking to lab test results and compliance documentation.
• Detailed ingredient lists, including allergen warnings.
• The manufacturer’s name, address, and contact information.
• The net weight or volume of the product.
• A statement confirming the THC content does not exceed 0.3%.

Testing by licensed laboratories is mandatory to ensure product safety and compliance.

Step 8: Plan Your Costs and Budget

Starting a CBD business in Florida requires an initial investment of at least $10,000, depending on licensing fees, product sourcing, marketing, and legal compliance. Key expenses include:

• Licensing and permit fees, including the $650 annual renewal for the Hemp Food Establishment Permit.
• Third-party testing and certification costs.
• Marketing and branding expenses.

Budgeting for ongoing expenses ensures your business remains financially stable as it grows.

Step 9: Source High-Quality CBD Products

Working with a reputable supplier ensures your products meet Florida’s strict standards. Your supplier should provide:

• Third-party lab results verifying potency and compliance with THC limits.
• Certification of compliance with Good Manufacturing Practices (GMP).
• A diverse product range to cater to market demands.

Why Partner with Corepay for Payment Processing?

The CBD industry is classified as high-risk, making it challenging to secure reliable payment processing. At Corepay, we specialize in providing tailored solutions for CBD businesses:

• Seamless CBD payment processing designed specifically for high-risk industries.
• Expertise in Florida’s complex compliance requirements.
• Fast approvals to get your business operational quickly.
• Extensive experience with CBD merchants.

Working with a payment processor that understands the unique needs of the CBD industry ensures smooth transactions and long-term success. Contact us today to learn more about our CBD payment solutions.