How to Start a Marijuana Extraction Company in 2020

The cannabis market has grown to encompass more than just the production of dried bud and now includes businesses such as those who are doing marijuana extraction. Extraction is becoming more prominent when it comes to business choices. Concentrates, extracts and infused cannabis products make up a significant part of today’s marketplace and this area continues to grow. If you’re thinking how to start a marijuana extraction company, this article will be a good help.

With the high demand for marijuana extraction, there are lots of individuals who want to be the newest entrepreneurs in this market area. However, extraction companies are more complex than many other cannabis companies when it comes to start-ups. That does not mean its impossible. Just make sure to follow the laws, legislation, and rules so you will be up and running in no time.

How to Start a Marijuana Extraction Company: a Step by Step Guide

1. Make sure you have a good business plan. While the marijuana extraction market is big, you cannot cover it all so know where your niche is going to lie and what product is being focused on. Know who your target customer is and where production material will come from. Many things need to be set out clearly in a business plan. This plan sets out all your building blocks for the new business and will capture everything the company wants to accomplish and the journey to get there.

The layout of your building, extraction lab, equipment needed, job areas that go from extraction, testing, processing and packaging. These items all need to be outlined in detail to make sure there are no critical steps, processes or equipment missing.

2. Location, location, location. Once your business plan is in place, then it is time to search for the appropriate location where the business can thrive legally. Various states and municipalities have different laws when it comes to extraction.

When you start a marijuana extraction company, be aware of any legal issues around getting your business license and other production and distribution regulations. Make sure the area that is chosen for the business is not only convenient for sales but legal from start to finish.

3. Get all license applications ready. You have your business plan, an area to have to build the business and now it is important to make your case to the local government. They will probably want to see your business plan to make sure that the appropriate safety measures, funding, and legal requirements are in place. Ensure that you have dotted all the i’s and crossed thet’s, so everything is up to par.

You will have to be flexible within the chosen municipality to get a yes from them. Have all the information they want and answer their questions to the best of your ability. Be well prepared. Have your standards, engineering plans and any references they might require. Not every person will have an in-depth understanding of the marijuana extraction business, so make sure they can be educated in a positive way.

Cannabis lawer


The other thing to consider is retaining a good cannabis lawyer from the area. They may be able to facilitate the whole process of licensing as well as having contacts in the area who can help give the company credibility and support.

4. Once you are approved and ready to go, begin looking for real estate. The trick with this is you need to make sure the land to be purchased has the required zoning and meets all regulations. Financially committing to the property before that is in place could end up being costly and problematic. It does not matter whether the company is leasing or buying, both must be zoned correctly, or the deal should not go through.

5. Hire the best team possible. Don’t fall into the trap of hiring friends or acquaintances who are not properly qualified. You want experts in their field who know how to do it right. This means you need an architect, designer, engineers and a project manager along with a place to buy quality equipment and interior products as well.

The marijuana extraction industry is just finding its way through the maze of legalization and is very specialized, so finding experts who understand the needs around building a compliant lab that is safe and can meet the needs of the business is crucial. If you have a poor team in place it can cost not only time but money as well. Once you start a marijuana extraction company, your business must be ready to go and having downtime due to poor flow in production or missing key things needed is going to delay its opening.

6. Get ready to build. This is the time that requires everything to be in place and ready to go. You should have a list of production processes and a list of equipment needed as construction begins. When the architect has the building drawings ready, hire a qualified contractor and make sure all local approvals are in place. Hire someone who has good references and great reviews.

7. Get your equipment ready to go. Using personal knowledge and the experts on your team, do lots of research and place orders for the equipment you are going to need. Once the lab is under construction it is important to make sure things are on their way so there is no delay when the building is completed. Check on lead times, delivery flexibility and how long for installation if that is needed that as well.

8. All your equipment and safety procedures need to be ready to go and installed where necessary before the plant is inspected. Most governmental agencies will require a licensed engineer who specializes in field verification of equipment and facilities to have inspected the business and its contents.

9. Your facility will have to meet all municipal codes and by-laws as well as their business mandates. Buildings codes, fire codes and any other safety verifications and inspections will have to happen so the company can open without issue. The lab and building will need complete inspection and verification.

Once you have everything in place, you need to get staff trained on the extraction methods and work to getting everyone up to speed on the process and product. Make sure everyone is well trained from day one so there are no glitches that will cost extensive time and money.

Source of Featured Image:

Andrew Lawrence

Andrew Lawrence is the Co-founder of Cannabis Stack. He is a dedicated and experienced entrepreneur, angel investor, and growth marketing professional for a wide range of businesses and clients across different industry sectors, including the Cannabis Industry.

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