The cannabis industry is one of the fastest-growing sectors in the world thanks to its increasing acceptance and subsequent t legalization, even in countries with previously draconian drug laws. Moreover, every day you can read about remarkable stories of success arising all across North America as more people start to see the possibilities of turning a hobby into a business.
But launching a business in an emerging market can be pretty tricky; it’s critical to understand the current laws and regulations surrounding cannabis commerce and develop a strategy for success. This post will dive into exactly what it takes to establish your own cannabis business, focusing on all the requirements related to this industry.
Consider Getting Some Form Of Certification
As the industry starts to mature, you will come up against an increasing amount of competition. While your product will ultimately be what separates you from the others (see the last point), you have other options that could expedite the process and help you with some of the other things mentioned in this post, such as securing funding, etc. One interesting option is acquiring some form of certification.
The exact type of certification you need will depend on the specific capabilities you plan to offer, but the basic idea is that you must demonstrate your knowledge and skills related to cannabis production, processing, sales, etc. Moreover, according to one such school, Cannabis Training University, these qualifications can enable you to become a master grower and provide you with a plethora s skills needed to gain an advantage. Getting certified by a reputable organization may also help you gain access to specific resources that would otherwise be unavailable to someone without their certification.
Additionally, having a documented record of your experience and qualifications is always helpful when applying for any license or permit to do business in the cannabis industry. As a final aside, certification also provides much-needed credibility. There are still instances where people are reluctant to engage with companies from within the marijuana industry due to their (unfortunately still) controversial nature.
Do Your Research And Understand The Current Regulations In Your Area
Although marijuana and its subsequent business have become more or less legal in most states and some nations worldwide, you shouldn’t treat it as a free pass to do anything you want. It is still highly regulated and taxed, and you should look at it much the same as you might if you were to start a business in the alcohol or tobacco industry (with far fewer medical and societal issues). As such, It’s essential that you understand the current regulations in your area and are compliant. Before making any plans, make sure to check with local, state, and federal governing bodies to ensure that you don’t break any laws or regulations.
However, regarding the latter, you must understand that cannabis is still illegal at the federal level in the USA, so you might have to jump through a few extra hoops you might otherwise want. After becoming knowledgeable about the regulatory environment, you can move on to the next step, which involves actually applying for the correct licenses and permits.
Get All Of The Licenses Necessary In Your Jurisdiction
There is no one size fits all advice for this step because each state and jurisdiction will involve different licensing requirements. The type of license you need depends on what you do and where you operate. It may be an agricultural license, a retail license, or a healthcare-related license (or all of the above!) For instance, some states will request you apply for a permit to sell medical marijuana, like in Arkansas.
At the same time, other locations like Colorado insist you get both a “medical marijuana business license” and a “retail marijuana business license” in order to operate legally. While this can become slightly frustrating depending on where you wish to operate, it is always wise to follow the law. Moreover, most states make it relatively straightforward to apply and often allow you to do so online through government portals.
Make Connections Because Networking Is Key In This Industry
The one thing that usually a booming business makes is the ability to network and form meaningful business connections. The cannabis biz is no different in this regard, and in some cases, your success might depend even more on it than other verticals. For example, your connections may be able to help you get approved for licenses, give you advice on state laws or even introduce you to potential investors willing to invest in startup operations. The key is to make sure that your contacts are:
- Are reliable
- Are trustworthy
- Can provide value to your company down the road
- Understand the sector
- Build a good working relationship with you and your partners
Get The Right Investors On Board And Secure Financing
All new businesses, regardless of their field, will require funding in one way or another. This might be a loan from a bank (although this is less likely as traditional banks tend to give this industry a wide berth), family or friends, or outside investors. This is because, in the beginning, you’ll need enough funds to cover everything needed to catapult your business to a place where it can become profitable, including investing in equipment, salaries, marketing, and other operational costs.
Regarding the cannabis sector, angel investors and venture capitalists often play a crucial role, as they tend to understand the potential of coming operations more than other established lenders. Additionally, crowdfunding sites such as Kickstarter can help you attract the right type of investors by connecting you with passionate entrepreneurs who are interested in investing in marijuana-related projects.
Source Quality Seeds, As It Will Be Your Product That Does The Talking For You!
The final thing to understand about setting up a cannabis business is understanding that it is more dependent than some others on providing not only a quality service but a quality product. Users of cannabis and its various related products are a discerning bunch, and if your crop is no good, they will have zero qualms about going elsewhere. If you take on board the fourth point about developing connections, this part will become much, much easier!
By obtaining quality seeds from reliable sources, your product will speak for itself…both literally in terms of excellent plant genetics and practically on the open market, where your customers’ reactions will enable your business to grow and compound via word of mouth and customer loyalty.
The cannabis industry can be incredibly lucrative and is proliferating, showing tremendous potential (some larger companies even sell securities). While starting any business can pose a challenge, the rewards of entering the cannabis industry are boundless. Properly researching your state’s laws, preparing a comprehensive business plan, and effectively understanding how to market your product or service is essential in navigating the complicated waters of cannabis entrepreneurship.