7 Questions to Ask A Bulk CBD Supplier Before Making an Investment

Posted on July 24, 2020

A large part of starting a business centers around making crucial choices. Deciding which cannabidiol (CBD) supplier to use for your business can feel overwhelming, especially with all the information available in the midst of its growing popularity.

However, it doesn’t have to feel that way. By asking seven important questions, you can narrow down which supplier best suits your needs and vision for the future.

1. Where is your hemp-derived CBD sourced?

Since all forms of cannabis were made illegal in the 1970s, it wasn’t until the 2018 Farm Bill that industrial hemp was legalized in the United States. Even so, North America holds the highest CBD market share at 40 percent.

Purchasing CBD in the country where your business is based appeals to our common sense, considering that the laws vary widely in different areas within any particular country. According to Daily CBD, the United States and Europe are safe places to purchase high quality CBD that’s free of contaminates that could possibly be legal in other places around the world.

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Within the United States, Colorado is one of the best states to grow industrial hemp. In the article, The Best and Worst States to Grow Hemp, not only does Colorado have a five-year-old program that helps farmers get started, but the state’s elevation, soil, and climate make it a perfect environment for farming hemp.

The article highlights two other states, Oregon and New York, with similar factors that make them great places for CBD farming. This doesn’t mean that other areas of the country can’t produce quality hemp-derived CBD in the near future. These are simply the places that have established successful production of industrial hemp.

2. How is your CBD manufactured?

You will learn more about the quality of the CBD when you find out how it is manufactured. The manufacturing process includes cultivation, processing, extraction, refinement, and isolation. It’s especially important to find out about the extraction method because this affects the quality of the CBD oil.

There are a few different methods used to extract CBD oil. Steam distillation is a clean way to extract CBD, but it’s considered too inefficient and not cost-effective by most manufacturers. Solvent extraction is a more efficient and cost-effective method, but it can leave contaminates behind.

Alcohol extraction is a more common method of extraction. Since the Food and Drug Administration (FDA) considers ethanol safe, manufacturers can use this method, which can produce a purer quality of CBD. However, it is not without it's challenges. Alcohol extraction it’s a lengthy process and not all CBD products can be made this way.

By far, CO2 extraction is the best method for producing high-quality CBD. This method utilizes carbon dioxide to extract the oil in three different ways: supercritical, subcritical, and mid-critical. Out of these, supercritical is the best and most-used type of CO2 extraction. CO2 is converted into a liquid at supercritical cold temperatures. Because it’s safe, causes little waste, and has no contaminants, the CBD is in its purest, most potent form, according to the CBD Awareness Project.

3. What kind of quality testing has been done on your CBD?

Because the CBD industry is basically unregulated when it comes to quality testing, check to make sure the CBD supplier has had their products tested. Third-party independent laboratory testing demonstrates the supplier’s integrity and ensures that the amount of CBD shown on the container is accurate.

Laboratories also test for heavy metals, terpene profiles, Tetrahydrocannabinol (THC) levels, organic solvents, and biological contaminants. Heavy metals cause serious damage to the body. Known for its ability to absorb nutrients from the soil, hemp-derived CBD can retain heavy metals such as arsenic, lead, mercury, and cadmium in the stems and leaves.

4. What amount of THC do your products contain?

Third party laboratories also test THC levels, revealing whether or not the amount claimed by the supplier abides by the .3% THC that’s legally allowed in CBD products. Anything over that amount could cause psychoactive effects on the consumer, or potentially, show up on drug test results. This would be dangerous depending on how the consumer uses the CBD product.

5. Can you help me navigate the legalities and regulations?

Legal regulations are par for the course regardless of the bulk provider, so it’s prudent to educate yourself and ask if the supplier will provide help as you move forward.

Federal regulations are a lot more complicated than making sure the CBD product only contains .3% or less THC. Although the 2018 Farm Bill legalized industrial hemp and CBD, it gave the FDA control of the hemp and CBD oil industry.

Among the strict FDA regulations, CBD products can not be marketed or labeled as dietary supplements, nor can there be any medical claims made about the products. 

When it comes to labeling the containers, CBD businesses need to remain cognizant of the current rules and regulations. You can learn more about these regulations in the article How to Create Compelling and Compliant CBD Labels.

Finding a supplier that includes a network of experts to help guide you and offer support can save you money on fines and legal issues that could cost you your business. In certain areas of the United States alone, local laws differ from federal laws causing confusion for CBD business owners.

A New York Times article highlights a police raid of a tobacco shop selling CBD products as well as other problems encountered in the industry.

Err on the side of caution when choosing a bulk CBD supplier and find one that will provide support in order to help you navigate through this new and evolving industry.

6. Do you offer private label options so that I can create my own products?

Depending on your longterm goals, asking about private label options can help you decide which supplier fits your needs. Suppliers may provide white labels, private labels or both.

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White label services offer faster turnaround when ordering products and allow you to add your own branding. On the other hand, private label services provide you with customized product creation and branding that requires a longer turnaround time because of the decision-making process involved.

Some companies that offer private labels also include other perks such as 24/7 customer service.
Read more about the benefits of white and private labels in the post What is the Difference Between White Label and Private Label?

7. What other services does your company provide?

Asking about any other services that the company provides could save you time, money, and unnecessary stress. For example, if the supplier offers shipping and packaging services, that will leave you with more time to spend on other important matters.

Furthermore, even if you don’t want to utilize private label services, choosing a company that provides that option gives you options for the future in an industry that’s rapidly growing and changing. You might find that customized branding and products are more profitable after experimenting with white label products.

Because this is such a new industry, the answers to these questions will set you on a path to peace of mind that will enable you to focus on successfully launching a profitable CBD business.

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