In those states where medical or recreational marijuana is allowed, business opportunities have opened for those willing to get involved in the complex and changing web of cannabis laws and regulations.
Types of marijuana businesses
The main types of businesses related to marijuana can be classified into three broad categories: (1) cultivation, (2) cannabis products and (3) retail. In addition, there are business opportunities in the field of testing facilities, delivery services, consumer appliances, and online software or services.
- Cultivation: Marijuana growing companies are subject to strict regulations and a large initial investment of money and horticultural knowledge is required.
- Cannabis-derived products: These businesses are engaged in the trade of products such as edible marijuana and cannabis tinctures, oils and creams.
- Retail: In marijuana stores, also known as “dispensaries” or “collectives,” cannabis-based products can be sold. This type of business is generally the most expensive to start, but it can also be the most lucrative.
Factors to consider when starting a marijuana business
Starting a marijuana business is more complicated than starting other types of businesses, mainly due to the regulatory environment and the uncertainty that surrounds it. The following factors should be considered before taking the step of starting a cannabis business.
- Costs: Costs vary by location, laws, and type of business and include licenses, leases, utilities, marketing, security, and workers.
- Residence Requirements: Marijuana license holders (and in some cases also investors) must be residents of the state in question.
- Criminal Record: Most states prohibit people with convictions for certain drug offences and violent crimes from having licenses for marijuana deals.
- Risk: The marijuana industry is risky due to the variable regulatory environment, but it can also be very lucrative.
- Waiting: Obtaining the necessary licenses can take several months and even more than a year.
- Investors and Partners: As with any other business, capital is required to get started. Most of the financing for these types of companies come from private investors and not from banks.
Steps to follow to start a marijuana business
- Make a business plan: The business plan is used to set goals, costs, time and financial matters, to give organization to your project, to help you stay focused and as a kind of resume to attract investors.
- Finding a place for your business: the regulatory plan (in English) and the cost of renting or buying your business site will be the main determinants of its location.
- Form a company or partnership: before applying for a license, you must set up your company or partnership in accordance with applicable regulations and identify its partners.
- Obtaining a license: This takes several months and the process can be delayed if you make mistakes in your application.
- Get operational infrastructure up and running – Be sure to comply with existing regulations and the terms of your license.
- Hiring the necessary personnel and services: the type of people or companies with whom you must contract will depend on the type of business you are starting. For example, store owners should probably hire marijuana growers and vendors of marijuana derivatives.
- Advertise your business: There are many ways to do this, including newspapers, online directories, trade magazines, and trade shows.
Speak to a Qualified Cannabis Lawyer Today
This article is intended to be useful and informative, but legal issues can be complicated and stressful. A qualified cannabis law attorney can attend to your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a qualified cannabis law attorney near you to discuss your particular legal situation.