Welcome to my Hempworx MLM review.
It hasn’t taken long for MLM companies to recognize that there is a lot of money to be made in the surging CBD market and in this Hempworx MLM review I am going be looking at Hempworx, a relative newcomer on the scene, and letting you know whether, as they claim, they really do offer a great business opportunity or whether it’s just another dubious scheme that will give you little or no return. Worse still, could it be an outright scam? Let’s see.
What is Hempworx?
Hempworx is an online network marketing organization (another name for Multi-level marketing, or MLM) that sells hemp-sourced CBD oils and a range of other CBD infused health-related products. It was founded in 2017
Its products can be purchased online directly from Hempworx but most are sold, as per the standard MLM model, by Hempworx members, who are known as ‘affiliates’.
Hempworx is not a company but a ‘brand’ owned and operated by My Daily Choice Inc. (more on that below).
|Owner||My Daily Choice Inc.|
|Price||$20.00 one-time fee|
|What you get||Replicated website for product sales|
Support and training
|Guarantee||60-day money-back guarantee on products sold both to |
the general public and to members. Hempworx also says
that it will buy back a member’s entire inventory of products if
they terminate their membership, as well as refunding the
$20.00 joining fee.
|CRIO rating (0-10)||2.9|
Who is Hempworx For?
Hempworx is for anyone interested in selling CBD oil and related products but who does not want the expense or risk involved in setting up their own physical retail business or online store.
Experience in marketing, or at least sales, would be a definite advantage but is not required. As with virtually all MLM schemes, there are no educational or prior experience requirements. In other words, it’s open to anyone and everyone.
Hempworx and My Daily Choice
As I previously mentioned, Hempworx is not a company but a brand owned by My Daily Choice Inc.
My Daily Choice Inc. was founded in 2014 by Josh Szwagil, who is the current CEO. The company originally sold health and wellness products, again on the MLM model. Jenna Zwagil originally joined the company as a sales affiliate and is now the CMO (as well as Josh Zwagil’s wife).
Apparently, Jenna Zwagil discovered the benefits of CBD oil during an illness, and the couple was so impressed with the results that they decided to switch the product line of My Daily Choice to exclusively CBD oil and CBD-infused products. In 2017 the Hempworx brand, and website, was created.
Hempworx products are currently available on both the Hempworx and My Daily Choice websites.
The Hempworx Affiliate (MLM) Program is administered by My Daily Choice Inc.
What is CBD oil and is it Legal?
CBD (cannabidiol) is one of the many compounds found in hemp, which is part of the cannabis family of plants.
The longstanding health benefits claimed for cannabis derive principally from its CBD component and so CBD oil is claimed to have similar benefits. Used widely for pain relief, CBD oil has also been claimed to be a cure or at least a beneficial treatment, for practically every ailment known to the medical profession, including high blood pressure, Parkinson’s Disease, and even cancer.
Unfortunately, there has been very little scientific study of the health/medical benefits of CBD oil and, with one exception (in cases of Lennox-Gastaut syndrome and Dravet syndrome, two forms of epilepsy), CBD oil has never been approved by the US FDA. However, there are millions of people around the world who swear by it.
Previously illegal, the farming of hemp and the sale of hemp-derived products (including CBD oil) was legalized by the 2018 Farm Act, provided those products contained less than 0.3% THC (tetrahydrocannabinol). THC is another compound found hemp/cannabis and it’s the part which causes the ‘high’. So, so far as the US Federal government is concerned, and provided some very strict rules are followed, CBD oil can now be produced and sold legally in the US.
At the US state level, the legal status of CBD oil is more uncertain because every state has its own rules and regulations with several states still banning completely the sale of any derivative of the cannabis plant and others requiring a medical prescription for CBD oil. Anyone considering joining Hempworx needs to carefully check the laws pertaining to the states in which they plan to sell.
Outside the US, the legal situation varies from country to country and which Hempworx discovered in a costly fashion when they started marketing in Canada in 2018. The Canadian government almost immediately began enforcement proceedings and Hempworx quickly took its products off the Canadian market, much to the chagrin of the many affiliates who had put a lot of time and money into setting up their marketing campaigns.
Hempworx Products and Pricing
Hempworx has a fairly limited (by MLM standards) range of products which includes:
- CBD ‘Tinctures’ (oils) with varying concentrations of CBD (starting at 500mg), and a variety of flavors, with retail prices starting at $89.00. The oils are offered either ‘full-spectrum’ (may contain trace levels of THP) or broad-spectrum (completely THP free).
- CBD softgels at $89.00 for 30, 25mg capsules.
- CBD ‘Topicals’ (skin creams and sprays) containing varying quantities of CBD and starting at $89.00
- Hemp Infused Coffee at $89.00 for 30 servings, each serving delivering 5mg of CBD
- Fruit Gummies at $89.00 for 45 gummies each containing 10mg of CBD
- CBD Pet Products including bacon-flavored CBD oil with 5mg of CBD per dose and dog treats containing 2.5mg per treat, both selling for $49.00
- Haircare products containing hemp seed oil (no CBD) ranging from $49.00 – $89.00
- Bath Bombs at $61.50 for 6 differently scented bombs, each containing 30mg of CBD
Hempworx CBD oils, in particular, appear to be of high quality. The owners state that the CBD is pulled from the hemp plants by CO2 extraction which is generally considered the best way to obtain the purest oils. Lower quality CBD oils are often produced through the use of solvents and other chemicals. The extracted CBD oil is then blended with a carrier oil (hemp seed oil) in varying concentrations.
Hempworx CBD oil prices, while in line with those of other CBD oil MLM companies, are very high when compared with those of other, non-MLM, retailers. For example, CBD Buddy, an online retailer based in the UK, and enjoying an excellent reputation for producing high-quality oils, sells 1,000mg of CBD oil for around $56.00. That puts the cost, per milligram, of the CBD Buddy oil at less than one third the price of the Hempworx 500mg offering at $89.00.
The CBD oil market has become very competitive over the last few years and will become even more so in the future as more and more companies jump on the CBD bandwagon. Hempworx Affiliates are going to really struggle to sell their products at over triple the price of their competitor’s equivalent offerings.
The Traditional MLM Model
Hempworx follows the traditional MLM model under which companies recruit members to do two things for them, namely sell their products (for which the members earn a commission) and recruit other members, who, in turn, do the same thing.
When a member (A) has recruited other members (B and C) they form part of A’s ‘downline’, as do further members recruited by B and C. A is then entitled to receive commissions not only on A’s personal sales but also the sales by everyone in his/her downline.
The result is a huge sprawling network of members all selling the company’s products.
In most cases, the members are also required to achieve weekly or monthly sales quotas, failing which they might lose whatever rank they have achieved in the organization and/or the right to earn commissions from their downline sales. To prevent this from happening, the members can, and usually do, themselves purchase sufficient products to reach their quota, following which they sell the products (if they can), consume them themselves (which many do), or store them in their garage (even more common).
So, now the MLM company has a huge (unpaid) salesforce frantically trying to sell their products, and when they don’t reach their quotas that salesforce turns into purchasers. What a win-win situation for the MLM company! Maybe not so much for the salesperson, though, who not only has made no commission this week but has actually had to buy products to maintain his/her standing in the organization. To make matters even worse they can’t park their car in their garage because it’s full of products they cannot sell.
The MLM company is not the only one sitting pretty in all this. The few members at or near the top of the organization (usually the ones who joined early) are also going to be making a lot of money. After all, they now have huge downlines of people selling products and recruiting yet more members. It’s the members further down the chain who are going to be in trouble.
A number of surveys have been done, including one by the Consumer Awareness Institute, that show conclusively that nearly all MLM participants (they estimated 97%) either don’t make any money or actually lose money.
And that’s the case with Hempworx. But don’t just take my word for it, take a look at Hempworx’ own 2019 Income Disclosure, taken from their Compensation Plan:
According to Hempworx’ own figures:
- 97% of members earned less than $82.00 per month on average
- 68% of members earned less than $16.00 per month on average
- only 0.37% of members earned over $2,000 per month on average
Also, bear in mind that these figures represent the member’s gross income from Hempworx, not the member’s ultimate profit. In order to earn these commissions, the members will have very likely incurred numerous expenses which could easily result in them making no profit or actually losing money. That’s more than likely the case for the vast majority, if not all, of that 97% of members earning less than $82.00 per month. It just doesn’t make economic sense!
Is Hempworx a Pyramid Scheme in Disguise?
Pyramid schemes are illegal in the US, Canada, and many other countries around the world, and with good reason. They are unsustainable and are inevitably doomed to ultimate collapse, frequently resulting in financial ruin for most of the participants. Because of the similarities between the MLM model and pyramid schemes, if you are ever considering participating in an MLM scheme you always need to ask the question: could this be a pyramid scheme?
The two principal characteristics of a pyramid scheme are the absence of a viable product for sale to the public and reliance on recruitment as the sole realistic means of earning money.
Hempworx does have a viable product and, while a strong emphasis is placed on recruitment, no payments are made for bringing in new recruits and it is, at least theoretically, possible to earn an income solely from the sale of products. For these reasons, I do not believe Hempworx is a pyramid scheme.
The Hempworx Compensation Plan
The Hempworx Compensation Plan is posted to its website but it’s really short and there are so many glaring omissions that it is impossible to get anything approaching a full understanding of how a member gets paid. Someone with knowledge of how MLM schemes generally work and with previous compensation plan experience can likely fill in some of the gaps and get a reasonable idea of how the plan works, but for someone new to multi-level marketing, and perhaps looking at a compensation plan for the first time, this is going to read like gobbledegook.
Such a lack of clarity is not uncommon with MLM compensation plans, in fact, it’s the rare exception, rather than the rule, to encounter a well-written plan that is both comprehensive and not unduly complex. And, of course, this is intentional on the part of the owners writing these plans. They want their rank and file members to be confused about how they can earn money, get paid, and progress through the ranks. This is because when those members ultimately realize how little they are earning, and try to complain, the owners can point to some ridiculously complex terminology in the plan by way of explanation.
Having said all that, let’s now try to make some sense of the Hempworx Compensation Plan and how it works.
Four ways to Make Money
Hempworx, essentially, gives its members (‘Affiliates’) four ways to make money:
- Purchase products from Hempworx at wholesale prices and resell them to family, friends, or anyone else whose interested, at retail prices. In this case, the affiliate simply pockets the difference between the wholesale price and the retail price.
- Earn commissions on the purchase of products by regular retail customers introduced by the Affiliate. The commission is the difference between the wholesale price and the retail price of the product.
- Earn commission on the purchase of products by other members recruited by the Affiliate (his ‘downline’) and by Preferred Customers, who are customers that have signed up, through the Affiliate, or other members in his downline, to receive repeated monthly deliveries of products. These are called Binary Commissions and, in reality with Hempworx, this is the only way most Affiliates have any chance of making any money.
- Earn bonuses and other perks through five additional programs; Leadership Check Matching, Global Bonus Pool, Rank Incentives and Bonuses, VIP Auto Club, and Elite Expense Accounts.
Hempworx Binary Compensation Plan
When structuring their network of members, there are several models that most MLM schemes follow, the two most common being unilevel and binary.
Under a unilevel plan, every new member that an Affiliate recruits slots into the network hierarchy directly beneath that Affiliate and that first tier, or level, of recruits can be infinitely wide. The recruits in that first level will, in turn, recruit more new members who will form a second level below the member who recruited them. And so on. Subject to various rules and conditions, that original Affiliate is now going to be entitled to commissions on the product sales by all the members on each of those succeeding levels (his downline). But, in a Unilevel plan, there is almost always a limit on the number of levels in the downline that is taken into account for this purpose and that limit is usually in the 5-10 range.
Under a binary plan, the first level below the Affiliate is limited to just two members, each one being termed a ‘leg’, and any further members recruited by that Affiliate are placed further down one of those two legs along with all new recruits recruited by other members in those legs. The two legs form the Affiliate’s downline and, again subject to rules and conditions, that Affiliate will receive commissions on product sales by that downline. Frequently those commissions are limited to only one of the two legs, but the number of levels that get taken into account is not limited, i.e. it is infinite.
Hempworx has adopted a binary compensation plan. Under its terms, an Affiliate is entitled to receive a commission on all the sales by just one of the Affiliate’s two legs. That leg can change from month to month and is the leg, for any given month, that has achieved the lesser total sales (known as Business Volume or BV) that month (the “lesser leg”). Of course, this being multi-level marketing, it’s not quite as simple as that and various other factors come into play:
- The share of the total BV that an Affiliate is entitled to, is determined by the Affiliate’s rank in the Hempworx organization. At the lower end, a ‘Builder’ is entitled to 10% of the BV while at the higher end a ‘Master Affiliate’ is entitled to 20%
- Each month, the Affiliate’ has to ‘qualify’ to receive a commission by achieving three different sales quotas:
- 40 Personal Volume (PV). PV is a value assigned to the Affiliate’s own personal purchases and by regular retail customers. Each product has its own assigned PV.
- 90 Business Volume (BV) in “Personally Enrolled Volume” on each of the Affiliate’s two legs. Personally Enrolled Volume is the value of purchases by Prefered Customers or other members personally enrolled by the Affiliate.
- 300 BV on the Lesser Leg.
- All BV generated by new affiliates during their first month of membership is excluded from the Binary Commission calculation and is instead made available for Jump Start Bonuses.
Jump Start Bonuses
Jump Start Bonuses are a %age of the BV (Business Volume) generated by new affiliates in an Affiliate’s downline during those new affiliate’s first month of membership. Remember, this is the BV excluded from the Binary Commission calculation. The actual %age and the number of levels to be taken into account are determined by the Affiliate’s rank at the time.
To ‘qualify’ for these bonuses, an Affiliate has to have generated at least 40 PV (Personal Volume) and the only way they can realistically achieve this is by personally purchasing products. 40 PV is the equivalent of a $69.00 (at member prices) 500mg bottle of CBD oil.
Jump Start Bonuses are primarily intended to allow new affiliates the opportunity to actually make some income during the first month after joining because, when earned, they are paid out weekly (all other Hempworx commissions and bonuses are paid monthly). What they actually do, of course, is encourage all new affiliates to recruit like crazy during the first month and persuade those new recruits to do the same.
Rising Through the Ranks
All MLMs have some kind of ranking system whereby, the higher a member’s rank within the organization the more benefits accrue.
Hempworx has a total of thirteen ranks. They start at Affiliate and culminate at Master Affiliate.
At Hempworx a higher rank means a higher %age of the BV in the Binary Commissions calculation and both a higher %age and more levels in the downline when calculating Jump Start Bonuses. Particularly as you get closer to the top ranks, bonuses and other ‘perks’ kick in that are just not available to the lower ranks (see Additional Bonuses and Perks below)
The flip-side of the coin is that the higher the rank, the greater are the requirements to maintain that rank.
At Hempworx, a Director (the third rank up) simply has to generate a monthly PV (Personal Volume) of 90 to maintain rank and which he can do by purchasing a couple of products each month. On the other hand, a Super Affiliate (one down from the top) not only has to generate the same 90 PV each month but also a BV (Business Volume) of 1,000,000 plus they have to generate at least 90 BV from each of at least three affiliates or preferred customers that they have personally signed up.
Additional Bonuses and Perks
Hempworx has five further programs that pay additional bonuses and perks to those Affiliates who qualify:
- Leadership Check Matching: is available to all ranks from Builder up and pays out a flat %age of the total of all binary commissions paid out in an affiliate’s downline. Rank determines how many levels in the downline are taken into account; for instance, for a Builder its just one level whereas for a Master Affiliate, it’s 10 levels. Payments are made monthly and an Affiliate needs to have a current PV of at least 40 to qualify.
- Global Bonus Pool: is a fund created each month and which comprises 2% of Hempworx’s total BV for the previous month. Affiliates can earn shares in the fund by Personally signing up four new affiliates in the preceding month (1 share), personally signing up four new preferred customers in the preceding month (1 share) or having advanced rank in the previous month (2 shares), although the last only applies to 5K Affiliates and up. Each month all the allocated shares are totaled and the fund is divided in accordance with each Affiliates individual share count. To qualify an Affiliate must have a PV of 40 and have signed up at least four Preferred Members or four Affiliates in the previous month and who have all placed product orders.
- Rank Incentives and Bonuses: are flat payments made to Affiliates (5K and up) who have reached a new rank and then maintained it for a consecutive period of 90 days as well as a PV of 90. The payments are generous, starting at $500.00 for 5K Affiliates and rising to $500,000.00 for Master Affiliates. This is a one-time payment for each rank achieved.
- VIP Auto Club: pays a monthly vehicle allowance to Affiliates after they have received a Rank Incentive Bonus and for so long as they maintain their new rank. It appears these payments are only available to 5K, 10K, 25K, and 50K Affiliates and the payments vary with rank from $150.00 per month to $1,000.00 per month.
- Elite Expense Accounts: are provided to the top five ranks, starting with 100K Affiliate. These are similar to the VIP Auto Club payments in that they kick in when the Affiliate has received a Rank Incentive Bonus. The payments vary with rank and range from $2,000.00 for 100K Affiliates to $100,000.00 for Master Affiliates.
As I mentioned previously, Hempworx does supply an Income Disclosure even though, in my opinion, it paints a sorry picture. In my experience, it is rare for an MLM company to do this and so I do give Hempworx credit for their openness in this regard.
For a company only in business for around three years, there are a lot of complaints filed at the Better Business Bureau (BBB) both by consumers and members.
The consumer complaints cover a variety of topics including ineffective products, receiving damaged products, problems getting refunds, false advertising, and delays in receiving products.
Member complaints include disputes over commissions earned, delays in getting paid, being shut out of their account without proper cause, misleading claims in the recruitment process, and problems in obtaining third-party lab testing results for products.
Hempworx/My Daily Life Inc. gets only a B- rating from the BBB.
Hempworx Pros and Cons
- Good-quality products
- Income disclosure available
- Inexpensive to get started
- Products are expensive when compared with regular (non-MLM) retailers
- Numerous consumer complaints
- Highly competitive market
- No scientific proof of CBD’s claimed health benefits
- Very close scrutiny by FDA of CBD advertising means marketing the products will be a challenge
- The legal status of CBD remains uncertain
- Poor customer support
- the only way to make money is by constantly recruiting new members
Is Hempworx a Great Business Opportunity or a Scam?
Hempworx is not a scam. There are real products that are sold to the general public and, despite some consumer complaints, those products appear to be popular and well thought of. Some members do make a modest income and a few (and I mean a few) right at the top of the chain are making a lot of money. For these reasons, Hempworx is not a scam.
But, neither is Hempworx a great business opportunity. How can it be when 97% of the members either make no money or lose money. Any business where for all practical purposes, all the income is shared by just 3% of the members should be avoided like the plague.
Hempworx has a line of, what appear to be, good quality products. They claim those products are independently tested by third-party labs but some doubt is cast on that by some of the complaints I have seen. It also appears to have a decent sized customer base for its products, although I have seen a disturbing number of complaints about shipping delays and problems getting refunds under the Hempworx guarantee. Also, their customer service seems to be a disaster.
Even allowing for the quality of their CBD oils, Hempworx’s prices seem really high when compared to those of their non-MLM competitors. In addition, the CBD market place is becoming saturated which means members are likely going to have great difficulty making sales to anyone other than themselves and other affiliates. This, of course, is a common theme with most MLM schemes.
The Hempworx Compensation Plan has some glaring gaps and ommissions which means it is impossible to gain a full understanding of it before joining. However, it is clear that the only way to make money with Hempworx is by continually recruiting more members. This makes Hempworx a classic example of the MLM model and that model is fundamentally flawed because it naturally funnels all the money to an incredibly small number of high earners at the top while those further down the chain make nothing or lose money. I refer you again to Hempworx’s own Income Disclosure which clearly shows that in 2019, 97% of all members earned less than $82.00. After you figure in expenses, that 97 % of members more than likely made nothing or actually lost money! Not very encouraging, is it?
What’s a Good Alternative to Hempworx?
There is a much better, and safer, way to make an income selling CBD oil, and that is through affiliate marketing. As an affiliate marketer:
- you don’t have the expense of carrying stock
- your startup costs are minimal
- you can choose which company’s products you want to sell, provided they have an affiliate program, which many retailers do
- you can earn excellent commissions on every sale
- you truly are your own boss and
- you don’t have to press family and friends into buying your products and joining your program
The total opposite of the MLM model!
Take a look at the program I recommend to get you started in affiliate marketing. It will:
- teach you everything you need to know about affiliate marketing and more
- help you build your sales website
- host your website
- provide excellent tools to help maximize traffic to your website
- provide 24/7 super-fast technical support and excellent community support
For more information, you can read my review of the program here.
Have you ever worked with Kannaway? If you have then please share that experience (good or bad) with our readers by leaving a comment in the box below.
Likewise, if you have any questions about anything I have written about in this article, please also leave them in the comments box and I will get back to you as quickly as possible.
Thank you for reading and I wish you every success in your financial endeavors.
- Good-quality products
- Income disclosure available
- Inexpensive to get started
- Very low probability of making any money
- Numerous consumer complaints
- The legal status of CBD remains uncertain
- Products are expensive
- Can only make money by recruiting new members