Podcast 235: Starting A Compounding Herbal “Apothecary”

This is the fourth in a series about herbal businesses. These videos cover what each kind of herbal business is and what kind of work you’d be doing, what kinds of education and experience you’ll need to get it started, and a few tips to help you along the way.

This video focuses on building a Compounding Herbal Apothecary – but as you’ll hear right up front, part of this now involves avoiding calling it an “apothecary”, because that word is regulated in every state. 😱 (Don’t worry, Katja has a dozen business-naming suggestions to get you started!)

A compounding apothecary (whatever we call it) is someone who makes custom products for clinical herbalists’ clients and ships them out. That way, a clinical herbalist can focus on clinical herbaling, and someone who makes really great medicines can focus on making the blends that each individual client needs! We don’t have to do it all – we can collaborate with each other! 💓

Interested in starting a different kind of business? Check out our episodes on starting an herbal products business, starting an herb shop, and starting a clinical herbalism business.

The courses mentioned in this episode include:

• The Herbal Business Program – which covers every aspect of GMP compliance, as well as every other part of running your business, from getting registered, paying taxes, and getting insurance to building your website and marketing without selling out – even hiring employees!
• The Family Herbalist Program (Materia Medica + Medicine Making)
• Foundations of Phytochemistry
• Fundamentals of Formulation
• The Community Herbalist Program
• Herb-Drug Interaction & Herb Safety

All of our courses include twice weekly live Q&A sessions and you can ask questions in the discussion thread attached to every lesson – we answer them ever day! Plus we have a student community where you can get support from other business herbies too!

If you have a moment, it would help us a lot if you could subscribe, rate, & review our podcast wherever you listen. This helps others find us more easily. Thank you!!

Our theme music is “Wings” by Nicolai Heidlas.

Episode Transcript

Katja (00:14):
Hi, I’m Katja. And I’m here at Commonwealth Holistic Herbalism in Boston, Massachusetts making this episode of the Holistic Herbalism podcast by myself today because R is out leading a plant walk. And I wanted to talk about another type of herbal business that you could run. So, a little while back I had done a series of episodes on different kinds of jobs you could have as an herbalist: a clinical herbalist, or a product maker, or different things. And so, you can scroll back in the feed to find the other ones in the series. And today the business type that I want to talk about is a compounding apothecary. And so, there’s already a little problem with that because we are not legally allowed to use the word apothecary anymore. You can’t put it in your business name. You can’t put it in any official record. But when we just talk to each other, we can still refer to things as an apothecary. And you of course can point to the herbs on your shelves and call that an apothecary. You just can’t call your business an apothecary. Over the last handful of years, the pharmaceutical, the pharmacy industry has done a whole series of laws in every state. And it’s the same law. They just passed it in every state. And there are words that previously were not regulated, that now are regulated. And apothecary is one of them. You’re not allowed to use the word unless you have a licensed pharmacist on staff. Okay, well, so that part’s a little bit of a bummer. But we can still, between us, we can still refer to the work that we’re doing as a compounding apothecary.

Katja (02:17):
And I am realizing that I have just jumped right into the topic. And not only that but jumped right into a tangent of the topic. Oh, my goodness. It’s the first however many seconds, and I’m already on a tangent. See, it’s so much better when Ryn is here. So, let me just back up real quick and give our reclaimer. It’s going to be this super short form of the reclaimer because even though I’ve said it 231 times, I have not memorized it. I don’t understand how that’s possible. So, the super short version of the reclaimer is we are not doctors. I’m not a doctor. This is not medical advice. And also, because I’m not talking about that so much today as I’m talking about business, this is some business advice, but it’s not legal advice. And it is of course not 100% complete here. We’re talking about ideas. But don’t worry. I’m going to give you resources to get all the way 100% complete as we go through. Okay, that was the dumbest reclaimer ever, but here we go.

What a Compounding Apothecary Does

Katja (03:20):
So, all right. I launched right into a topic about how we’re no longer allowed to use the word apothecary. And I did that even before I really explained what a compounding apothecary is. So, let’s do that. A compounding apothecary is like a subset of a products business. You’re still making herbal products, but you’re making a very specific type of herbal product. And that is that you are basically operating like a pharmacy. Of course, we can’t use that word either. But you are in communication with clinical herbalists who are either working online with their clients. Or maybe they work in person, but they don’t have their own apothecary to provide herbs for their clients. And so you are going to receive from either the clinician or the client the formula that that person is supposed to take. And you are going to custom blend that formula for that person as written down by the herbalist, the clinical herbalist. So, what that means is that normally when we think about an herbal products business, we’re thinking about coming up with formulas and different specific products. And then carefully naming them so that they don’t say arthritis salve, whatever, all that kind of stuff. And yes, it’s important that those products are really well made, and really potent, and also clever in your formulation, all that kind of stuff. And then, but the other half of the job is that you’re selling it to individual people. And so, you’re either marketing and selling it online, or you are selling it at a farmer’s market or something like that. And there’s a whole episode specifically about that business model.

Katja (05:26):
But in this case, you are not coming up with your own formulas. You are stocking individual herbs. And so, you would probably be stocking individual dry herbs and individual tinctures. Likely you might also stock several individual types of salve. That’s possible. And all of it would be set up so that you could formulate it as requested. You would not be inventing the formulas. You would be formulating on demand for someone else. And then you would be sending out the product to the person who needed to receive it. So, some of the nifty things here that would be different is that your marketing is very, very different. You’re going to be marketing directly to clinical herbalists. So, you’re marketing within the industry – Industry sounds a little weird, but it’s what we are – instead of marketing to individual customers. So, your customers will be the clients of other herbalists. And that can be a little bit easier marketing. It’s like a different kind of marketing. Some people like one, some people like the other.

Katja (06:45):
Just like a regular product business, you’ll still need to come up with your packaging. And it’s cool if your packaging is cool and has some kind of artistic flair. You’ll need labels, but the labels will need to be very flexible. Like a section of the label that you can write on in Sharpie. Or maybe you get a thermal printer so that you can custom print the labels. And everything is pre-designed as a template except for the part where you type in the formula. You will still need to do all the GMP requirements for your labeling. So, all the ingredients have to be on the label, that kind of stuff. And then of course you will be shipping it out. So, you’ll need to do the packaging for the postal service, or UPS, or whatever and actually getting it out the door. Now, if you have this kind of business, you may also have a product line with stuff that you formulate just like a regular herbal products business. If you’re a clinical herbalist, you’re not supposed to have a separate product line that you work with. But if you are making custom products for someone else, there’s no problem with combining that with your own product line of your own formulas and stuff. So, you could absolutely do this as a hybrid business if you wanted to. That would be completely fine.

Katja (08:11):
Now, the management will be basically the same either way. You’re still going to have inventory to deal with. You’re still going to make products. The type of products that you make will be different – simples versus formulas and stuff – but you’re still going to be making products. You’re still going to have to stock tincture bottles, and bags for tea, and all that kind of stuff. You’re still going to have to do all the GMP stuff. You’re going to have to do accounting, and sourcing, and all that. And your advertising, although your advertising will be internal. It’ll be internal to the community of herbalists as opposed to out in the real world. So. That kind of stuff will be basically the same. But still the sort of day-to-day work is different, and it has a lot of variability. So, if you’re a person who doesn’t really like to make exactly the same thing all the time, this could be really appealing because you get to make different things all the time. Now, I mentioned GMP a couple of times already. Your labeled GMP is the same. All the rules are the same there. That’s not tricky. But some of your documentation will be just a little bit different. Because when you are making standard products, you need a master record that has the recipe of everything that you make with a very precise recipe, including perhaps, common substitutions if you have seasonal variation or something like that.

Katja (09:37):
And then you’ll have a batch record. And that document just says okay, well I made the batch. I followed the recipe. And this is the date that I made it. And I checked all the boxes, and everything’s good. And here’s the batch number. Well, that makes sense. And you’ll still do that as an apothecary because you’ll have a batch of skullcap tincture. And that batch will be like, what, a gallon of skullcap tincture or whatever. And then you will use that to formulate for other people. And then eventually you’ll need a new batch of skullcap tincture. And your master recipe will be super easy because it’ll be like skullcap, vodka. We’re done, you know? And so, your batch record also will be super, super easy. I got the skullcap. I got the vodka. I’m done. But you will need one more. That’s not actually enough because you’re sending out these customized products, and each one of them is a micro batch. So, you will need another set of batch records for the actual blends. That is not actually going to be a problem because here’s the thing. You can design the invoice or the receipt that goes to the customer to fulfill all of the requirements of a batch record. There’s nothing in a batch record that would be weird if a customer saw it. And you can just use the order number as the batch number. Super, super easy. So, you don’t have to do the work twice. You are going to need to send the customer the information about what was in that bottle anyway. It was already going to be on the invoice. So, all we have to do is just design the invoice to make sure that it fulfills all the needs of the batch record. And that’s not hard to do.

A Needed Business that Prioritizes Quality

Katja (11:22):
So, okay. So, there’s a few little adjustments that we would make that are a little bit different than the standard. But that can be an example for you that the adjustments are going to be super easy. It’s not a huge deal. All right. So, hopefully so far that already kind of appeals to you. There are not a lot of people doing this kind of business right now. There are some. But as a clinical herbalist who doesn’t want to send things to clients, I’m not good at that part. I am good at making stuff. And if I see a client in person. And I make something, and I hand it to them, fantastic. But man, getting it into a box and getting it to the post office. I don’t know what it is, but that is a huge block for me. It never works out. So, I don’t try to send things to clients. And instead, I have them buy things from people that I know directly. But then it can’t be custom formulated the way I want it. So, this whole thing of having these custom blenders who will ship stuff is amazing. It works great for the clinical herbalists. It works great for the clients. It is great all around. So, I hope that some of you already – even though I’m not done yet – already are thinking uh, that sounds like a job I would love doing. I really want to do that. Because, like I said, there’s a very small number of people doing this. I don’t know. The number is like 10? It’s not a big number, is what I’m saying, of people doing this that are really doing it, and they’ll ship it anywhere, and whatever. So, we need people doing this, is what I’m saying.

Katja (13:14):
Okay. So, let’s have one piece of advice for you if you’re going to do this job. And I think the single most important thing about this kind of business is that you need to have super effective, very potent herbs and herbal extracts. Because if some clinical herbalist sends you a formula. And then you make it and ship it to the client. And the clinical herbalist expects a certain result, and the client expects a certain result, and that result is reasonable. It’s not like… There’s no mismatch in the wrong herbs were chosen or something like that. It’s a reasonable expectation. But your herbs weren’t really great, and your extracts weren’t super potent and really good. Then that’s going to be the weak link in the chain. And that’s going to hurt your reputation of course. But also, it’s going to hurt the client because they’re not going to get the results that they’re expecting. And it’s going to hurt the clinical herbalists too, because now the client’s not going to trust the clinical herbalist, right? So, what that all boils down to is that the number one most important thing is that you make really good medicine. Your medicine is all simples because you’re going to formulate what was asked for. Okay, and if they ask for something that wasn’t going to work to begin with, well that’s not on you, though you always could consult a little. Regular pharmacists do that with doctors too. Sometimes they say hey, this person’s already on this drug. And you want them to be on that drug, and that’s actually not an awesome idea. Maybe we should think of something different. Well, you could do the same thing too. You wouldn’t necessarily have the client’s whole health history and all that kind of stuff. But if a formula came in, and you were like hmm. That formula doesn’t make a lot of sense. There’s no reason that you can’t email the clinical herbalist, and be like is this what you actually meant? Was there any kind of mistake here? I’ve never seen these put together, something like that. You can become a double check or a safety net for the clinical herbalists too, which is a cool way for them to develop more trust in you.

Katja (15:34):
But the really most important thing is that your medicine is strong and effective. So, that’s going to mean that the herbs that you source have to be really high quality. Whether you are sourcing them from local farms. Whether you’re getting them from mountain rose herbs. Whether you are growing them yourself or wildcrafting them ethically and sustainably yourself. Whatever your method is for getting the herbs, they have to be really good. And it would be better to run out of something than to settle for low quality. It would be better for you to be like, oh, dear clinical herbalist, I actually don’t have any skullcap in stock right now because the skullcap that I received was unacceptable quality. And I don’t want to give your clients something that isn’t high quality. But I do have passionflower, and I have chamomile. I could substitute the two of those in for skullcap. But I want to check with you first that that would meet your requirements. You know, something like that. As a clinical herbalist, I would love hearing that from a person who is a compounding apothecarist, even though we would not say that legally, of course. But I would love hearing that. I would love hearing somebody say actually, I’m out of that because I couldn’t find good enough quality. I’ll have some when I can get it. But I’ve got these other things that we could substitute instead. I’d be thrilled. So don’t feel like you need to sacrifice quality just so that you have it on the shelf. Put the quality as the most important priority.

Katja (17:18):
And then the second thing is that your extraction skills must also be very, very good. So, this is going to mean that you need to have developed a real feel for which herbs you want to tincture fresh because that gets you higher quality. You get a better tincture that way. Versus which herbs you prefer to tincture dry because that gets you the better tincture. And sometimes there are guidelines for this. And sometimes it is kind of like you’ve tasted it so many times, and you’ve tried it both ways. And you’ve really developed a strong preference for the potency of one way or the other. And if you are harvesting or receiving fresh herbs, and you are going to dry them for tea. Then also your drying skills have to be really, really good. You have to have a good dehydrator. You can get good dehydrators for not an arm and a leg, for a hundred dollars, which is not cheap. But if you’re doing this as a business, you could be in that range and still have a good quality product. It doesn’t have to be the shining silver whatever. But just your end result has to be high, high quality, good color, good flavor, good smell. All right. But then the fun thing here is that maybe you have never really had quite the creative flare for formulation. And so you make amazing quality extractions and amazing quality dried herbs. But then you go to formulate, and it’s like hmm, that worked really great, but it didn’t taste awesome. But that’s enough for you. That’s actually enough for me. I just take stuff. I like my tea to taste good, but I don’t spend a lot of time making artisanal recipes. Once in a while I really work at something until I get it to be so delightful. But most of the time I’m kind of in a hurry because of the next client or the next class to teach. And so, I’m just like hey, this formula is going to work great. And if it doesn’t taste fantastic, that’s also fine. So, if that is you, then this is a great business model for you. Because you don’t have to have that as a strength. Coming up with really creative artisanal formulas, that doesn’t have to be your strength. Your strength is very potent, very effective extraction or drying of the herbs and having them at a really high quality. Yes, excellent.

GMP, Interdependency, & What to Know to Do the Job

Katja (19:58):
All right. And I mean that’s the job. Just making sure that you’re stocking stuff. Making sure that you’re in regular communication with your clinical herbalists. Making sure that you’re getting everything out to the clients in a speedy manner. That you have kind of a system for making it speedy. Because of course they just got all their protocol. They’re anxious to get started on it. So, you really want to get that turned around pretty fast. And that would be not only a lovely way to spend your days, but a lovely way to be in service to the community. People get really annoyed about the GMP stuff. Especially the part that says if you see clients, you’re not supposed to make products. Now, right now if you see clients, you are still allowed to custom formulate for your clients. But a lot of us don’t, either because it’s very expensive to keep a whole apothecary. It’s a whole different kind of business expense. Or because there just isn’t time to be sending it all out. But a lot of people kind of really have a bug about the GMP regulation that you also can’t have a product line. And I think it’s awesome actually. Because I think that it is opening up space in our community for more people to do more parts of the work. Which means that we are freer to dive deep into the part that we’re really good at and rely on each other for the other parts. None of us has to do it all by ourselves. If I cannot get myself to the post office in a timely manner, I don’t have to do that. I don’t have to hate it literally and be mad at myself that I said I can’t believe I told them I would send this. I hate going to the post office. Actually, I love the postal service. I love them. Just getting there is a real pain in my butt. But I just want you to know I love the postal service. They’re great.

Katja (22:07):
Okay. So anyway, I think that this interdependency is first of all important. We can’t all do everything ourselves. And I think that it was certainly not the intent of the FDA and the FTC when they created the GMP regulations. They did have an intent, and that intent was people should have products they can trust. People should have products that don’t have allergens in them that they don’t know about. People should have products that don’t have cat hair in them. Which my cats are always all over the place. You wouldn’t want products out of… Well, this is the home stash anyway. But you wouldn’t want products. Now, when we had our whole big space with the clinical space, and the school space, and everything before covid, obviously there were not pets there. So, there was never any risk of cat hair in the public-facing herbs. But anytime I post our cats or our dog on the internet, most people are like I love them. And some people are like that’s so dirty. It’s not GMP compliant. Yeah, it’s my house. It’s fine. But it’s just one more reason that I don’t want to be sending things out to people. Because I don’t want to keep a whole separate everything that is not where my cats are. My point is they were just trying to keep people safe from cat hair, and allergens, and whatever else. But the side effect of that is actually more space to have a more vibrant, more interdependent, more connected community of herbalists. And I think that is amazing.

Katja (23:52):
All right. Okay, so what are you going to need to know to do the job, and how are you going to learn that? So, you are going to need to know all the herbs themselves. And if you’re going to be growing them, or sustainably and ethically wildcrafting them, or any other method of receiving those herbs that doesn’t include a label that says what they are, then of course your plant identification skills are going to have to be really good as well. And you’re going to have to be very good at making the products. And then when you blend things, you will need to be good at blending precisely. So, you’ll have a form for them, and you’ll tell them what they expect. If you work in parts, or if you work in milligrams, or if you work in whatever, you can choose that. And then you can tell your clinical herbalist how you want to receive the formulas. But you will need to faithfully produce the formula that they give you. And so that might mean being comfortable with a scale if you’re working with grams or being comfortable with like measuring all the milliliters and all that kind of thing. It’s not hard to do. But when you’re just making it for yourself, you just kind of eyeball it, and that’s fine. Okay. And you’ll need to know the GMP. You’ll need all the business administration stuff. So, that’s going to be your website, and your taxes, and registering. And your marketing, although your marketing will be a little easier because it’s just to other herbalists. And if you aren’t good at design, that’s okay. But you will at least need to have some ideas for what you like, so that a designer that you work with is going to have an easier time producing what it is that you want to see on your labels, and as a logo, and stuff like that.

Our Courses Can Help

Katja (25:54):
Okay. And then obviously you might know all that stuff already. You might have all that knowledge right now. That’s cool. But if not, we can help you do that. So, our programs and the courses that you would take to be proficient in doing this work would start with the Family Herbalist program. That will teach you more than a hundred herbs. And it’s the most common and also safest herbs. And more than 52 ways of how to make things with them. So, tinctures, and tea, and stuff like that of course. But treats, lozenges, salves. Oh, you know, I was talking about salves. So, you can just like making tincture where you make your skullcap tincture, and your passionflower tincture, and your chamomile tincture. And then one day somebody asks for all three. So, you blend a little bit of each one together, right? You can do that with salves also. You can have a big thing of calendula salve, and a big thing of plantain salve, and a big thing of some kind of warming thing, and whatever. And then all you have to do is heat it up just very gently. It doesn’t even have to be all the way to liquid, just like very melty ice cream kind of melty. And stir it up, and then let it harden up again. And that’s very quick to do. You can do it in one of those little mini personal crockpot things. So, that is also something that you could do. You could make lozenges. You could make little herbal pills. That’s a very old style of working with herbs instead of capsules. It was before we invented capsules. But they’re legit. You can do that. You could encapsulate things yourself. You could even offer herbal treats as an option. In our Medicine Making course we have cookie recipes. and infused wine, and truffles, and all different kinds, oh, hot chocolates and stuff. So, there’s no reason that you can’t also offer those things. Clinical herbalist would be thrilled if you had that ability to offer that because it’s so good to give people something delightful as their medicine, right?

Katja (28:18):
Okay. So, learn all the herbs. Learn all the different ways to turn them into things so that you can decide which ones you want to offer. All of that is in the Family Herbalist program. You will probably also really want to have the phytochemistry course as well, because if you’re going to do high potency extractions, it’s going to be important to understand for this herb I’m trying to get these particular constituents. And they come out best in alcohol, but even better if I add a little vinegar because that acidity helps draw some of the constituents out, whatever. So, if you’ve ever thought about those kinds of things, that’s phytochemistry. And so, the Phytochemistry course would really help you in terms of increasing the potency of your products. And then the Herbal Business program because that’s where you’re going to learn all of the GMP, all of the marketing, how to build your website. Now, for your website, if you did this kind of business, you might want a few extra things that most people wouldn’t have on their website. You might want some form submissions so that you don’t have to have 10 million emails from different people. They could just go to this exact form. They could put it all in. And then you would get it formatted exactly the way you want it. So that you can very easily just check everything off, and then turn that into a receipt, and then presto. You’re done. So, that needs a little bit of extra website configuration, but it’s not hard to do. And I can help you do that. That’s no problem. And you’ll need all your marketing stuff. Did I say that already? Your marketing stuff. So, you’re going to market to the clinical herbalist. All that stuff. Oh, how to do your labels. What kind of printers are best? Or do you want to have them pre-printed and write on them, or do you want a thermal printer? All the different things.

Katja (30:26):
And everything you need about the kitchen regulations. You’ll need commercial kitchen space. People get really stressed out about commercial kitchen space. And everybody I’ve known has been like actually, once I finally sat down, it was so much easier than I thought. There are so many resources to help you with commercial kitchen space. And not a hundred percent of the time, but often you might even be able to find commercial kitchen space near you that you can use for free or very low cost. Yes. So, okay, all that kind of stuff. All of the nitty gritty business stuff, all that is in the Herbal Business program. And I love the Herbal Business program. I love it because I love seeing all of everyone’s ideas. And I would love seeing them progress and then actually come into being. But I love it for you because you can literally ask me any question. You can ask them at live Q&A. You can ask them in the private community. We have a double private business community. It’s a private section of our private student community for everybody in the Business program. Everybody in the Business program signs a code of ethics so you don’t have to worry about your intellectual property. All of that, everybody agrees that everybody’s going to respect everybody else’s formulas and everything else. So, that means that you can be asking questions in this space and get responses from me, but also from everybody else. And I think that’s pretty cool. Or you can just put a question right on every single lesson of the course. You can just type the question while you’re watching the video. I answer all of them usually within 24 hours. Sometimes it’s 30 hours, y’all. Occasionally that happens. But I’m the one who answers them all. We do have helpers – Kenton, and Emmy, and of course also Ryn – who answer questions in all the other courses. But I selfishly keep all the Herbal Business questions all for myself because it’s my favorite thing. I just love seeing what everyone is doing.

Katja (32:39):
So, great. And then okay, so that’s it. Family Herbalist program. Probably also Phytochem. And then the Herbal Business program. And you might also want the Community Herbalist program or the Clinical Herbalist program, or Herb-Drug Interactions and Herb Safety. Those are all things that could benefit you, but that you won’t actually need to do this job. Because you won’t necessarily have to do the herb-drug interaction thing because you won’t have the list of the client’s drugs. The clinical herbalist already did that part for you. So, I think it’s great for everybody to learn that stuff. Just anybody who likes herbs and is working with herbs, it’s just good to know. But you are not going to need it to be able to do your job successfully.

Katja (33:29):
All right. So, that is the life of a compounding apothecary person. And I hope that some of you think that this sounds fun because I would like there to be more of you out there. Also, I try to maintain a list of all of the compounding apothecaries. So, if you decide that you want to do this, please let me know. Or if you’re listening to this, and you’re like hey, that’s my job. I have that already. And you have not already talked to me, then please send me an email and let me know so that I can let our clinical students know about you. Yes. Excellent. So, I guess that is the end of this episode of the podcast. And this is where Ryn would say take care of yourselves, and take care of each other, and drink some tea. And so I’m going to say that too. Drink some tea and all the other parts also. And we will be back soon with another episode of the Holistic Herbalism podcast together. It just happens that he made the last episode without me because I was doing a thing. And now I made one without him because he’s doing a thing. And don’t worry. We’ll be together again very soon. And until then, thanks for listening. And don’t forget that they still like it if you write the review. Put the little stars, and say why you like it, and whatever. The algorithms still want people to do that, and it does help other people find the podcast. So, if you’re still listening right now, probably you like the podcast. And if you haven’t already rate and review and all that stuff, then hey, just do it real quick. It’s pretty fast, and we would appreciate it. But also, other people out in the world who find us because of your review will also appreciate it. All right everybody. Bye-Bye.