How to Get a CBD License in Rhode Island & Start Your Business

The CBD industry is booming, and Rhode Island offers opportunities for entrepreneurs looking to enter into the market. However, obtaining the necessary licenses and navigating the state’s regulations can be complex. This guide simplifies getting a CBD license in Rhode Island, helping you kickstart your business. Whether you plan to open a retail store, launch CBD-infused products, or cultivate hemp for extraction, this guide will be your roadmap to success in Rhode Island’s CBD industry. We’ll explore how to start a CBD business in Rhode Island, how to obtain a CBD license there, and the laws & regulations regarding the sale of CBD in the state.

How to Start a CBD Business in Rhode Island

CBD is a high-risk industry, so you’ll need to do your diligence to avoid penalties in the future. Start your journey in the CBD business by crafting a comprehensive business strategy that includes your objectives, product range, marketing strategies, financial projections, and operational tactics. This well-structured roadmap will guide you as you navigate the ever-changing industry.

Once your business strategy is in place, the next step involves selecting the appropriate legal structure for your venture. You have several popular options, such as forming an LLC, establishing a partnership, or incorporating your business. Your choice here carries substantial implications for your enterprise’s legal and financial aspects.

With your chosen business structure defined, the following imperative action is to initiate the registration process. The Rhode Island Department of Business Regulation handles hemp applications. Concurrently, securing an Employer Identification Number (EIN) from the IRS is essential to fulfill your tax obligations. It’s important to note that obtaining a Rhode Island CBD license is a mandatory prerequisite before engaging in any activities related to the cultivation or production of CBD.

Building a solid financial foundation is critical for your CBD venture’s long-term success and growth. You can start this endeavor by establishing a dedicated business bank account. Beyond providing access to credit cards and financing options, this step contributes to developing your business credit, which will prove invaluable for future funding pursuits and expansion initiatives.

License requirements can vary. Nevertheless, if you want to produce or distribute hemp, a license will be needed. You can choose from two distinct license types — retailer and distributor.

How to Get a CBD License in Rhode Island

To acquire a Rhode Island CBD license via the RIDOH Cannabis Licensing Portal, follow these steps:

• Login — Use your credentials on the Department of Business Regulation’s website.
• Edit Profile — Update required profile information under “My Account.”
• Apply for a License — Choose the relevant license type and complete the application, including document uploads and signatures.
• Resubmit Unfinished Applications — You can return to unfinished applications using the Submission Record ID.
• Renew License — Renew your license up to two months before expiration by clicking “Renew.”
• Update Information — Modify active license information by selecting “Change Request.”
• File a Complaint — You can lodge complaints via the “File a Complaint” option, including relevant details and supporting documents.

CBD license application requirements for Rhode Island

Here’s what you need for a Rhode Island CBD license:

• Applicant Information — Include the name and address of the individual responsible for supervising, managing, and directing the sale of hemp-derived consumable CBD products at your facility. This person must undergo a National Background Check and be at least 21.
• Partners and Consultants — List the names and addresses of any individuals or entities involved in partnerships or providing consulting services related to selling hemp-derived CBD products.
• Facility Location — Specify where the sale of hemp-derived consumable CBD products will occur.
• Procurement Documentation — Provide documentation indicating that the applicant or its representatives have established purchase agreements with hemp handlers or distributors. Additionally, clarify the source of your hemp-derived CBD products.
• Tracking and Recall Procedures — Describe your approach to monitoring the entire journey of hemp-derived CBD products, from procurement to sale. This should encompass policies and procedures for handling both voluntary and mandatory recalls of these products. These procedures should be robust enough to address recalls initiated by the Department of Business Regulation (DBR), voluntary recalls by hemp-derived CBD distributors or retailers for defective or potentially defective products, and actions to ensure public health and safety.
• Zoning Compliance — Provide documentation demonstrating that your retail activities align with the relevant zoning ordinances of the city or town where your business operates.

Laws & Regulations for Selling CBD in Rhode Island

In 2017, Rhode Island enacted the Hemp Growth Act, which legalized hemp production in line with the provisions outlined in the 2014 Farm Bill. Under this legislation, hemp was distinguished as a separate entity from marijuana. The key defining factor is that it contains less than 0.3% THC on a dry weight basis. This also meant that one might sell CBD without a Rhode Island CBD license if it didn’t cross the 0.3% threshold (double-check this information with someone from the DBR).

Initially, similar to hemp programs in states like Kentucky and Arkansas, Rhode Island’s program only permitted hemp for research purposes.

However, in 2019, in response to the 2018 Farm Bill at the federal level, Rhode Island passed HB5151. This bill expanded the state’s hemp program, making hemp agriculture and manufacturing legal nationwide. Notably, it also explicitly legalized the sale of CBD products, including consumable items containing CBD.

Rhode Island has relatively lenient regulations regarding CBD products. Virtually every type of CBD product, including CBD edibles, oils, and concentrates, is legal in the state.

Full-spectrum CBD is legal in Rhode Island as long as it meets the THC content requirements (less than 0.3%). It’s essential to verify that the specific full-spectrum CBD product you’re interested in selling adheres to these legal requirements. Additionally, it’s advised to consult with legal experts or state authorities for the most up-to-date information on CBD regulations in Rhode Island, as laws change over time.

How to Renew Your CBD License in Rhode Island

Like many other states, a Rhode Island CBD license lasts one year. Then, you’ll have to renew it online. Renewal can be started up to two months before your registration card or license expires. Here’s how you do it:

After logging in, you’ll find the renewal option, allowing you to start the renewal process. Take note of the Submission Record ID, which you must save. Click “Save and Exit” to preserve your application and proceed using the Submission Record ID. Click “NEXT” to move forward. After, add your electronic signature. Once you’ve added your signature, you’re pretty much done. You’ll receive confirmation, and your application will be listed under “My License Applications.” Should you need to withdraw the application after submission, the option to do so is available.

Start Selling CBD in Rhode Island

When entering Rhode Island’s CBD market, create a distinctive website for your business. Constructing a solid CBD website in this region requires organization and dependability. Start by thoroughly reviewing your CBD product range and creating product descriptions, competitive pricing, and captivating visual content.

For peak performance, opt for top-tier hosting services alongside a blog. This tool is valuable for connecting with your customer base and potential collaborators and sending organic traffic to your site. Securing a Rhode Island CBD license is necessary if your business aspirations encompass hemp production.

A highly efficacious strategy for establishing a direct sales channel to your clientele entails an email list. This approach diminishes reliance on external distribution channels, affording you greater control over your sales and marketing strategies. While choosing an eCommerce platform, explore reputable options like Shopify, WooCommerce, and BigCommerce. Nevertheless, be wary as not all platforms readily accommodate CBD sales due to perceived regulatory risks. Hence, it’s an excellent idea to collaborate with an experienced payment processor, preferably one offering specialized CBD merchant accounts.