How to Get a CBD License in Utah and Start Your Business

It’s illegal for the residents of Utah to possess or use marijuana-derived CBD products (unless you’re an approved medical patient with a qualifying medical condition). However, for CBD enthusiasts, it’s open season. The law permits the possession or use of Hemp-derived CBD products, provided they don’t contain more than 0.3% THC. This has dramatically increased demand in the state (recent data shows the U.S. CBD market is expected to reach USD 13,655.70 million by 2029) ^[1]Data Bridge Market Research. “U.S. Cannabidiol (CBD) Market – Industry Trends and Forecast to 2029”. Accessed August 29, 2024..

With that in mind, business-minded CBD enthusiasts may find great opportunities here in the beehive state. In this article, we’ll take you through all the up-to-date, nitty-gritty details on how to get a CBD license in Utah and legally sell CBD in your new small business.

How to Start a CBD Business in Utah 

Though many of the steps below are fundamental to starting almost any sort of business anywhere, others are about getting acquainted with Utah’s specific rules. Here’s how to get started:

Ensure you’re familiar with the state and federal laws, such as the U.S. Farm Bill of 2018, which federally legalized hemp-derived products. Also, research specific hemp guidelines in Utah around growing, producing, or selling cannabidiol (CBD), product content rules, and the specific state licensing requirements ^[2]Utah Department of Agriculture and Food. “Industrial Hemp and Medical Cannabis Division”. Accessed August 29, 2024.. Don’t forget to demonstrate market demand by doing your market research and analysis.

Conduct market analysis and design a business plan. You must decide what CBD products you want to sell and design a business plan that includes business structure, startup capital, and revenue forecasts. 

Register your business with the secretary of state after defining your business structure (sole proprietorship, partnership, or LLC, among others). Then, apply with the Internal Revenue Service (IRS) for an Employer Identification Number (EIN) for tax obligations.

Once you’ve registered your business, you can apply for a Utah CBD license from the Utah Department of Agriculture and Food.

Invest in affiliate programs and influencer/social media marketing to convince, convert, and retain a loyal customer base. To run a successful marketing campaign, research what social platforms your target audience uses the most and their active hours. Also, observe all regulations regarding CBD marketing in Utah.

When starting a CBD business, you can make your own CBD products in-house or partner with a licensed vendor you trust. Don’t forget your license to process or retail CBD products. You’ll also need to obtain a certificate of analysis (COA) from an accredited laboratory to ascertain your products’ quality, potency, and safety. 

eCommerce is now, and businesses that establish an online presence are more likely to thrive. One way of making your eCommerce platform reliable and customer-centric is partnering with a payment processor. You can create a CBD merchant account with multiple secure payment solutions and easy integration options.  This will also make it easier for you to accept various types of payments, including credit card and mobile payments.

Under federal and state laws, CBD merchants must meet packaging and labeling requirements. Use sustainable materials to package items and accurate data and descriptions of your products. New rules require COA, THC content, batch number, processor details, and any necessary disclaimer on each product. 

The CBD industry is a dynamic niche with regular amendments to existing laws as well as creating new ones. This makes the CDB industry high-risk, requiring you to keep up with the latest regulations to remain compliant. Monitor new trends in the market and adjust where necessary. 

How to Get a Utah CBD License 

Merchants that market or sell CBD products in Utah must obtain and maintain a current permit with the Department of Agriculture and Food ^[3]Utah Department of Agriculture and Food. “Hemp Retail Permits”. Accessed August 29, 2024.. Here are a few steps to follow when applying for Utah CBD license: 

1. Determine the permit you need. You can either choose to process (grow) or retail CBD products from hemp or medical marijuana, though marijuana products fall under state licensing for medical marijuana. Your choice will depend on your target audience, demand, competition, and available startup capital.  We advise working with a business attorney or accountant to help you analyze the market and pick the best opportunity. 

For a license to deal in industrial hemp, you will need to get a permit to either grow, produce, or sell CBD from industrial hemp ^[4]Utah Department of Agriculture and Food. “Industrial Hemp Processor License”. Accessed August 29, 2024..

2. Submit a license application. Apply for a CBD license through the Department of Agriculture and Food. The department charges a non-refundable $50 application fee to process CBD permits. 

To apply for a CBD license in Utah, an applicant must submit the following to the Department of Agriculture and Food. You can see a sample application form here.

• Pay a non-refundable $50 fee
• Contact information (name, email, and phone number) of key players in the business 
• The legal description of the business, including its name, location, and license number 
• A written consent allowing representatives of the Utah Department of Agriculture and Food to enter the premises where the merchant processes or sells CBD products 

Laws and Regulations for Selling CBD in Utah 

It is illegal to buy, sell, or use CBD products in Utah with more than 0.3% THC content on a dry-weight basis, and merchants can only sell marijuana-derived CBD products to persons with medical cannabis cards ^[5]Utah Office of Administrative Rules. “Agriculture and Food: Medical Cannabis and Industrial Hemp: Rule 35: Cannabinoid Product Registration and Labeling”. Accessed August 29, 2024. However, for low-THC cannabinoids like CBD, new regulations are in place that help prepare the state for business. Merchants must obtain an industrial hemp retailer permit from the Department of Agriculture and Food to grow, produce, or sell CBD products. There are also new rules around what exactly constitutes CBD. Some of the updates include:

“Cannabinoid product” has been changed to mean products that, when combined, THC and CBD cannot contain more than 10% of the total content. Or, it does not exceed a total THC (or any THC analog) greater than 5 milligrams per serving and 150 milligrams per package.

In addition, inhaled cannabinoids (i.e., by a vaporizer) must include a label warning regarding possible health effects. CBD products in Utah include capsules, oral liquids, gummies, tablets, topicals, and concentrated oil. Currently, CBD inhalers, vapes, drinks, baked goods, and bandies (chocolate bars) are banned in Utah. 

How to Renew Your CBD License in Utah 

CBD licenses in Utah expire after one year. Pay your annual renewal fee ($50) on or before 31st December each year through the Department of Agriculture and Food. The department charges a late fee for permit renewals made after December 31st. You’ll be mailed a new permit once your renewal is approved.

Start Selling CBD in Utah 

It’s a criminal offense to sell CBD products in Utah without a valid CBD license. Interested individuals and business entities can obtain a Utah CBD license from the Department of Agriculture and Food. After an initial $50 application fee, your application will be reviewed, and a permit will be mailed to you once approved.

You should do thorough research before venturing into the lucrative CBD niche. Once you have all the requisite information to start your CBD business, you might open an online space to reach a wider market. You should also partner with a high-risk payment processor to get a CBD merchant account. At PaymentCloud, we aim to give your customers a seamless payment experience. Contact us today to see what we can do for you!

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