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CBD has taken every corner of the United States by storm, including the island state of Hawaii. If you’re an entrepreneur seeking a location for starting a new CBD business, you’ll be pleased to learn that Hawaii is a CBD-friendly state with a large market for the increasingly popular product. However, this hasn’t always been the case. In 2019, shortly after the 2018 Farm Bill legalized hemp and CBD at a federal level, Hawaiian authorities visited local CBD businesses to warn retailers of potential criminal and financial penalties for selling CBD.[1]Hawaii Public Radio. “Hawaii’s CBD Industry Grows As State Opts To Educate Before It Imposes Fines“. Accessed on December 22, 2023. While this is no longer the case and retailers can now sell CBD products to Hawaiians, CBD entrepreneurs must understand the rules, restrictions, and licensing requirements for selling these products in the state.
This guide explores how to start a CBD business in Hawaii, how to get a CBD license in Hawaii, the rules and regulations for selling CBD in Hawaii, and other related topics. Continue reading to ensure your new business starts on the right foot!
How to Start a CBD Business in Hawaii
Starting a CBD business doesn’t have to be challenging—the initial stages of opening one are similar to that of any other business. Hawaii is home to more than 135,000 registered small businesses, so processes are in place to make it easy for new merchants to start one.[2]Boost Suite. “14 Fascinating Hawaii Small Business Statistics“. Accessed on December 22, 2023. First, choose a suitable business structure for your organization. While LLCs are popular because of their liability-limiting protections, you can also choose from options such as partnerships or sole proprietorships.
To register a business in Hawaii, head to the Hawaii Department of Commerce and Consumer Affairs Business Registration Division website to begin the application process. It costs $50 to register a new business, but you can pay extra to speed up the process. Next, obtaining a Hawaii Tax ID Number from the Hawaiian State Government website is important. This ID number is in addition to an Employer Identification Number (EIN), which you must obtain from the IRS.
Once you register your business and receive the relevant tax identification numbers, your company can apply for a business bank account. Not only will a business bank account make it easier to manage your business expenses and receive payments, but it will also help your company establish a business credit score. If you decide to expand your CBD business in the future, a strong business credit score will make it much easier to unlock favorable financing rates.
Now it’s time to explore the specific components of setting up a new CBD business in Hawaii!
How to Get a CBD License in Hawaii
Fortunately, there are no CBD-specific business licenses for CBD retailers in Hawaii. This means you won’t need to apply for any special permits or permissions to begin selling CBD products to consumers. If this sounds good, that’s because it is! Many states require CBD licenses for selling cannabidiol products, complicating the process of bringing products to market and making the initial stages of starting a business a lot more expensive. However, while Hawaii doesn’t require a CBD license to sell products, you may need one for other states if you plan to ship products to customers outside of Hawaii.
Hawaii’s hemp producer licenses are regulated by the USDA for businesses wanting to produce hemp for CBD products. To apply for a hemp producer license, head to the USDA’s Hemp eManagement Platform to begin the application process.
CBD License Application Requirements for Hawaii
In Hawaii, you don’t need a CBD license, which means there are no application requirements for businesses wanting to sell CBD products there. As for hemp producer licenses, the USDA regulates the application details.
Below, let’s explore some of the basic requirements:
- Grower and business executive names and phone numbers
- Grower and business executive addresses and emails
- Geo-spatial locations for the areas where hemp will be grown.
- Criminal background checks for growers, business owners, and employees who will have contact with the hemp plants. This must occur within 60 days of the application.
No applicant for your hemp producer application should have a felony conviction related to narcotics within the last decade. States like New Hampshire, Mississippi, Wisconsin, Utah, and many more follow the same USDA regulations.
Laws & Regulations for Selling CBD in Hawaii
Luckily, for CBD entrepreneurs in Hawaii, the state’s laws for selling cannabidiol are very relaxed. First, all CBD products must be hemp-derived, meaning they must contain 0.3% THC concentration or less. Additionally, businesses can only sell CBD products to individuals 18 or older. Combining these simple-to-follow rules with no requirement for a CBD license makes it easy to see why Hawaii is such a popular place to start new CBD businesses.
How to Renew Your CBD License in Hawaii
Since there is no CBD license for Hawaiian CBD retailers, there is no renewal process for CBD licenses. Still, while there’s currently no requirement for a license to sell CBD in Hawaii, this is subject to change. Always keep tabs on the latest CBD-related news from Hawaii.
For businesses producing hemp for CBD products in Hawaii, it’s critical to renew your license with the USDA. As with applying for a new producer license with the USDA, to renew a license, log into your account on the Hemp eManagement Platform to begin the renewal process.
Start Selling CBD in Hawaii
With minimal restrictions on selling CBD, Hawaii is an excellent location to start a new cannabidiol business. So, once you have the correct structure in place and apply for a business bank account, it’s time to market your new products. Many Hawaiian CBD businesses use physical storefronts to sell CBD products, while others market their CBD products exclusively online via eCommerce stores. Regardless of your preferences, there are plenty of options at your disposal.
Irrespective of how you decide to market your CBD products to Hawaiian customers, your business requires a payment provider to facilitate credit and debit card transactions. On average, Hawaiians have 3.25 credit cards, making the state the fourth highest in terms of card ownership in the United States.[3]Bankrate. “Credit card ownership and usage statistics“.Accessed on December 22, 2023. However, while credit card processing is a must-have service for CBD businesses in Hawaii, it can be difficult to access merchant accounts from traditional financial institutions as CBD is considered high-risk. Fortunately, specialized high-risk merchant account providers offer competitive processing rates, higher chargeback thresholds, and dedicated support to help CBD businesses process payments in today’s market!
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Hawaii CBD License: FAQs
Is CBD legal in Hawaii?
Yes. CBD products are legal in Hawaii as long as they follow the restrictions outlined in the 2018 Farm Bill. CBD products can only have 0.3% THC concentration or less.
How much does a CBD license cost in Hawaii?
There is no cost for a CBD license in Hawaii (as there is no Hawaii CBD license). This makes it an affordable state for opening a new cannabidiol business.
Can you sell CBD without a license in Hawaii?
Yes. A business can sell CBD products to Hawaiian consumers without a license, making it one of the most attractive CBD states for many entrepreneurs. However, CBD products must conform to the federal guidelines outlined in the 2018 Farm Bill.
How long is a CBD license valid in Hawaii?
There is no CBD license for retailers in Hawaii, so there’s no expiry date. CBD business owners in Hawaii just need to ensure they sell legal CBD products to customers. Products cannot exceed 0.3% THC concentration and customers must be 18 or over.
