Private label merchandising is a great way to make money in an industry as complex as CBD (cannabidiol) and cannabinoids. However, there are risks. After the passage of the 2018 Farm Bill, selling CBD products has become more commonplace. It is possible to build a reputation and be popular in niche industries like CBD skincare.
What Are CBD Skincare Products?
There are many CBD oil products available today. Many of these products come in the form of vapes, CBD gummies, and CBD oils. The market for skincare is a completely different one. It includes products such as creams, lotions, cleansers, and cosmetics that can be used to moisturize, as well as tinctures that are not intended to be consumed. CBD is well-known for its anti-inflammatory properties and antioxidant benefits. CBD (cannabidiol) can be used in skin care products to improve skin appearance by reducing wrinkles and preventing acne. It can also make skin appear brighter, healthier, and more hydrated.
This is why it matters. Cosmetics have a different regulatory requirement for food than for food because of regulations regarding intended uses.
FDA Requirements
You must comply with both FDA regulations and cosmetics regulations when dealing with CBD. You must comply with FDA regulations regarding CBD products. These include the amount of THC and where it came from.
CBD must be extracted from hemp and not marijuana. While both are forms of cannabis, hemp plants produce a smaller amount of THC, the psychoactive ingredient in marijuana. The hemp plant must have less than 0.3% THC in the oil it extracts. You could be subject to legal and financial penalties if your supplier does not regularly test the CBD extracted from the hemp plant.
Cosmetic Requirements
Federal Food, Drug, and Cosmetic Act and Fair Packaging and Labeling Act. These laws don’t require that your products be approved for market by FDA unless they contain color additives. CBD cosmetics do not require pre-approval.
Having said that, Although the fees and rates may not be the best, convenience comes at a cost.
This is the biggest problem with these services’ terms and conditions of use. It is illegal to sell CBD products. There are many other high-risk activities that can be done with Private Label CBD products, including consultancy, lotteries, and dropshippers.
Benefits Of A Merchant Account For Private Label CBD Skincare
Two of the most important elements for a CBD business are fraud and chargebacks. This is why these businesses are often deemed high-risk and why banks and processors won’t work with them.
Chargebacks occur when a customer does not follow the correct route to receive a refund and instead demands it from their bank. Your chargeback number increases when the bank issues a refund and charges you a fee. Your account can be closed if it gets too high. This is obviously unacceptable. What can you do to avoid chargebacks? A merchant account provider that is right for you will have chargeback prevention strategies in place to reduce chargebacks and lower your risk.