If you are thinking of starting a cannabusiness, now is the best time: the industry is booming and 2021 promises exponential growth. As of 2020, 15 states plus D.C. legalized recreational weed and medical cannabis is legal in 41 states.
According to statistics, every fifth American can consume cannabis in a recreational way without visiting a doctor. It opens huge horizons for your cannabusiness but also arises such questions as high taxation, regulations, and other obstacles you will need to overcome before a successful launch.
Cannabusiness is a relatively new term that combines two words: cannabis + business. It may stand for the hemp business itself or any ancillary business related to the industry. Let’s take a look at the most popular types of cannabusinesses you may get interested in.
To be ready for a good start every cannabusiness needs to cover all the bases. There is no need to hire in-house experts as it’s too expensive, so the company may ask ancillary (related to a cannabis industry but not “touching the plant”) businesses for help.
The most popular services in the industry are:
Cannabis cultivation and growing is the key type of the business as it’s the very beginning of the chain. To be able to operate, the company must have a marijuana producer’s license that permits storing, growing and selling the plant.
Large-scale cannabis cultivation is impossible without automated processes: nutrients supplement, lighting, irrigation, climate control. Apart from this, compliance reporting and team management should be run smoothly as well, so to set it all up the company may think of a commercial software that will help to track, report and optimize the workflow.
Another thing to consider is a cultivation plan which is the part of the business plan and the response to the state’s request for proposal (RFP) or request for application (RFA).
Currently, the cannabis professionals are in high demand which exceeds supply. The labor market imbalance caused an educational boom in the industry and lead to various cannabis schools that offer:
Talking about cannabis certification, it covers six areas of expertise: growing, cooking edibles, how to open a dispensary, delivery services, law, and medical marijuana. Knowing which area of the cannabis industry you are going to enter will be a key factor in picking up the right type of certification.
The accessories are the most lucrative in the cannabis industry. But unlike cultivators, manufacturers of growing accessories don’t fall under so strict banking regulations. With this in mind, the entire industry is spiking now. Let’s review the most popular products you can start selling with no fear of failure:
Vaporizers are at the highest demand as they are portable and can be used anywhere including travel. More than that, these devices are considered the safest way to consume cannabis and give a quick effect compared to traditional methods. But consuming marijuana is not limited to flowers: many people use CBD vaporizers for inhaling CBD vape juice, so you can start with a wide range of products.
Weed Containers are must-have accessories for all weed smokers as keeping the flowers in a closed space not only keeps them fresher and prevents it from drying out but also maintains their high THC level. Glass jars with dark tint, stainless steel or bamboo containers are the best option as they are airtight and protect the weed from UV rays.
Dab rigs are a good choice due to the growing popularity of hash, live resin, and shatter. Unlike the flower, concentrates give the consumer more taste and a stronger effect. Dab rigs are made of high-quality glass which is more expensive or silicone.
Grinders help to increase the burning of the weed and get the most out of plant consumption, so the market offers various types of models: acrylic, wooden, metal, and electronic. As an alternative, there are mini graters in the shape of a plastic card.
Though opening a dispensary still faces regulatory difficulties and high barriers to entry, this is one of the most popular cannabusinesses in 2021. The industry is divided into medical and recreational facilities.
Medical dispensaries are licensed to provide patients medical advice as well as sell the cannabis intended to improve their condition. Each customer must be of 18+ age, have a medical cannabis certification, and a doctor’s prescription to buy weed. As the patient’s privacy is crucial when visiting the facility, every dispensary should meet a number of standards, such as a separating wall and a special waiting room.
A recreational dispensary is open to anyone above 21 years of age which makes it a promising start-up. Unlike medical marijuana that contains a higher level of CBD, recreational strains are designed to produce more THC.
An online dispensary is another type of recreational facility that usually offers delivery service to all customers who will prove their age with proper documentation. This type of cannabusiness demands less effort and seed capital as you won’t have to pay for the location or hire a big team.
The booming industry opens many roads for aspiring entrepreneurs but the idea itself isn’t worth anything without a detailed plan and awareness of all the pitfalls your business better avoid. Once you’ve decided what cannabusiness you want to run, let’s talk about preparations for its establishment.
Any cannabusiness is subject to licensing and various requirements aimed at ensuring the transparency and accountability of the industry. Since it is highly regulated, the licensing of cannabusinesses is extremely difficult. Compliance requirements differ from state to state and depend on the category of your cannabusiness.
In order to operate within the state and federal laws, it is important that you meet all the necessary requirements and permits. Let’s review some licensing basics for each type of business you should be aware of before you plan the launch.
It could be difficult for cannabusinesses to find small business loans as it is still a Schedule I controlled substance at the federal level. However, there are financial institutions that are ready to review your application as a cannapreneur. Before contacting the lender, it makes sense to look for reviews and compare the conditions. Also, make sure you qualify for the loan on the following criteria:
Finding property at an affordable price is a real challenge due to high prices, so this is going to be your biggest expense. For example, a dispensary in California will pay up to $15,000 for a good location. When it comes to a cannabusiness that does not interact with a final customer, it may seem tempting to save money and find a cheaper but remote location. Don’t be too quick to decide: if you aim to attract talented employees to your team, many of your potential candidates for business operations will be frustrated they need to spend extra time driving to the location. To keep the team engaged, you can offer benefits or additional pay.
Speaking of cultivation, consider the regulations your state has imposed such as a minimum distance of 10,000 feet from schools, libraries, parks, etc.
Useful resources to review the offers:
When it comes to choosing a team for your cannabusiness, there are a number of factors to consider as your staff should meet the experience requirements for a state application for your business license. If you start the team selection beforehand, it makes your application stand out from the rest and become competitive on the market. The more certified specialists you can demonstrate the better. It may seem challenging to start a search with your own effort, so the market offers a large number of staffing firms that have a huge base of applicants and know all the nuances of the hiring process.
Here are positions you need to cover first and foremost:
More than enough has been said about the importance of cannabis marketing as the industry is experiencing an unprecedented rise. Keeping in mind how many aspects of promotion you must consider, in order to save time and take the most effect from marketing you may turn your attention to non-staff cannabis marketing services. They are provided by companies who specialize in the cannabis industry in particular and know all implicit difficulties every company faces while advertising online and offline.
You can learn the basic steps each cannabusiness needs to take in our Complete Guide on Cannabis Marketing >>>
The cannabis industry is a dynamic and promising area. As with any emerging market, early risers can get more if they create a good product and build the right business plan for all of the aspects. Though on the federal level it’s still illegal, changes are within reach so the sooner you start the better.
Hopefully, now you have the right idea of what type of business you are likely to start and what steps to make.
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