CBD Startups: Opportunities, Challenges, and What You Need to Know

The CBD startup scene is booming. CBD, short for cannabidiol, is a naturally occurring compound found in marijuana that’s known for its calming effects—without the psychoactive “high” associated with THC.

Hundreds of millions of dollars are pouring into this fast-growing market of cannabis by-products. According to investment research firm Cowen, U.S. retail sales of CBD products reached between $600 million and $2 billion in 2018 alone.

You might be wondering:
“Can I make money selling CBD?” or “Is CBD oil even legal?”

This article breaks down the current state of the industry, its challenges, and where the biggest opportunities lie—based on insights from over a dozen CBD startups, both producers and distributors.

Table of Contents

1. CBD Legalization Is Ramping Up
2. The Industry Is Highly Regulated
3. It’s Better to Err on the Side of Caution
4. How CBD Startups Can Market Safely and Effectively

CBD Legalization Is Ramping Up

In 2015, medical use of CBD oil was legal in just 14 out of 50 U.S. states, under strict conditions. Fast forward to 2019—recreational marijuana became legal in 11 states and Washington, D.C., and medical cannabis in 33 states.

That means more than half of the U.S. now allows the sale and use of cannabis-derived products such as CBD. These changing laws signal a strong future for CBD startups looking to launch or scale their operations.

The key reason behind this shift? Science.

CBD oil is extracted from industrial hemp, a variety of the cannabis plant that contains minimal amounts of tetrahydrocannabinol (THC)—the psychoactive compound responsible for the “high.”

To be legally classified as hemp-derived CBD, THC levels must remain below 0.3%—the threshold that distinguishes a lawful product from a controlled substance.

The Industry Is Highly Regulated

CBD products are widely believed to help with conditions like insomnia, anxiety, chronic pain, and even epilepsy. They come in various forms—pills, gummies, creams, teas, coffees, and tinctures—and can be:

• Swallowed (oral)
• Applied under the tongue (sublingual)
• Inhaled
• Applied topically on the skin

However, despite growing demand, the CBD industry operates under strict regulations. Producers and marketers are prohibited from making health or medical claims, as current research is still considered insufficient to confirm long-term benefits or side effects.

In short, while the market is expanding, it remains a highly monitored and compliance-heavy space.

It’s Better to Err on the Side of Caution

CBD startups face two main challenges:

1. The social stigma tied to cannabis products
2. A constantly evolving legal landscape

This means businesses must stay closely aligned with local and federal regulations. Being cautious doesn’t have to mean being invisible, though—it just requires smart, compliant marketing strategies.

Successful CBD brands focus on educating consumers rather than making claims. Transparency and accurate information build trust and help counteract misconceptions about cannabis-derived products.

How CBD Startups Can Market Safely and Effectively

Because traditional advertising (like paid social media or health claims) is restricted, CBD startups must find creative and compliant ways to grow.

One of the most effective strategies is investing in a strong SEO (search engine optimization) foundation. By creating high-quality, educational content on your website or app, you can:

• Attract organic traffic
• Build credibility and authority
• Educate customers about your products and their benefits
• Drive conversions—without violating advertising restrictions

Developing a web or mobile app can also help educate users, showcase your product range, and strengthen customer relationships—all while staying within legal boundaries.

Conclusion

The CBD market holds tremendous potential, but success requires a deep understanding of both legal compliance and strategic marketing. With thoughtful planning and the right technology, startups can thrive in this fast-evolving industry.

If you’re considering investing in or launching a CBD business, expert guidance can make all the difference.

Sabersoft has extensive experience in digital strategy and market research for regulated industries.
📩 Get in touch today to book an investment feasibility assessment and explore how to build a compliant, profitable CBD business.