Legalization of Marijuana in many states has made entrepreneurs excited about this relatively new yet promising industry. Many entrepreneurs are wondering how to start a Cannabis business. The cannabis business is booming and this industry is expected to grow at an exponential rate so there is a huge potential to make big bucks.
Although the marijuana business is still illegal in the U.S federal Law, it’s legal in more than half of the states in some form. You can get recreational marijuana in almost nine states and District of Columbia; and medical marijuana in 29 states.
A great thing about U.S. cannabis industry is the fact that worldwide market of marijuana grew by 37% in 2017 with the total worth of $9.5 billion, and the U.S. market accounts for 90% of it.
This market is expected to hit $23.4 billion by 2022. It’s the best time to hop on this train if you want to be a successful marijuana entrepreneur.
So, are you one of those cannabis entrepreneurs who want to start a Cannabis Business?
Of course, you are.
Or you won’t be looking for ways to start your legal marijuana business, right?
Well, here is the 6 step process to start your own cannabusiness.
1- Come Up with an idea
This might seem strange to you because when you think about starting a cannabis business, what usually comes up in mind is either marijuana growing operations or dispensaries.
This industry has a lot more to offer than these two options. Yes, you might have seen a lot of dispensaries making a lot of business but it might be very risky for small businesses.
According to the Controlled Substance Act, most of the rules and regulations in the cannabis business will be applicable only on marijuana growers, processors, and sellers. It might be acceptable for you if you have a huge capital behind you, otherwise, you might not want to get stuck in this mess.
On top of that, some states need a proof of a minimum of $1 million capital before giving license of a dispensary.
When the competition increases, the weed prices will eventually go down and you will end up with low-profit margins, high taxes, and strict regulations. I am sure you don’t wanna go down that road.
Due to this reason, ancillary marijuana businesses are doing well as they don’t have to face high taxes and so many regulations.
You can choose from a lot of options including cannabis-related Apparel, Dabbing Products, Vaping, Tourism, Topical Products, Services or Edibles.
2- Make a Business Plan
Yes, your marijuana business will also require a business plan. I know it’s weed we are talking but when we are talking about the business, we have to follow the rules.
What you have to do is to document your company resources and goals including your start-up costs, milestones, growth model, monetary model, and financial details.
I understand the fact that entrepreneurship is exciting but this paperwork is so dull and boring. Most of the entrepreneurs dread making the business plan but trust me, this business plan for your cannabis business will help you stay focused on your goals and milestones and help you pivot if that time ever comes.
3- Find an ideal location
Finding an ideal location for your weed business will depend on which type of business you are going to start. If you are looking to start a cannabis growing operations, you can do it on a far distant place by keeping in mind about the security, costs, future expansion and logistics.
However, if you want to start a dispensary or an edibles business, you might have to look for a good and cannabis friendly neighborhood where you can easily market your business.
You might have to look at your state laws regarding this business prior to choosing a location.
Doing all this alone would be tiresome, so you can get help from a local realtor to make this process easy for you.
4- Get a State License
Even if you have plenty of funding, a great product or service, and people are too excited about it, you have to know and stick to the rules if you ever wanna succeed in this industry.
You are going to need a license for running a medicinal or recreational marijuana business from your state. It will only be valid in that state and you can’t operate outside that state without a license.
Although, every state has its own rules, what’s common is that you must be a resident of that state and you shouldn’t have a criminal record. You can have a look at this state wise guide to get marijuana business license.
5- Hire your Employees Wisely
Now that you have a state license and a business location, you can now start your operations. To run your business operations smoothly, you are going to need good and dependable employees.
To see if you are hiring the right talent, make sure to view the work history of the candidates to see if they are dependable or they just jump from job to job.
Contact the references and previous employers of the candidates to see what their character and personality is like. Don’t just hire the selfish overachievers. Hire people who can work as a team and fit your company culture as well.
6- Market your Marijuana Business
Now you have hired your staff and your business is up and running. It’s the time to market your marijuana business. Yes, you can go for traditional offline advertising but it’s too expensive and not as effective as it used to be.
I found online advertising to be extremely powerful especially in the case of Cannabis industry. Wouldn’t you agree?
Well, that is how we found you and that got to mean something.
I know there are a lot of restrictions these days to advertise your business through Facebook marketing or Google ads. But, that’s not the end of it.
You can leverage Social media organically to build your audience and Search Engine Optimization (SEO) to Target your Customer.
There is very little competition in terms of Search Engine Optimization for marketing your Cannabis Startup to the potential customers. That’s why it’s easy to rank at the top and stay there if you start early. If you start after everyone else, you might have to spend big bucks on SEO.
All you have to do is to:
1- Make a website for your cannabis startup.
2- Write good SEO content for your prospects.
3- Let the content rank on its own (It might take 1-2 months to rank the content)
4- Create funnels by offering the call to actions to take visitors to appropriate pages.
5- Collect Leads.
6- Start Selling.
This process might differ in different types of legal marijuana businesses but you can talk to us (Free CONSULTATION and no Strings Attached) if you are considering digital marketing for your startup.
Challenges in the Marijuana Industry
Every business has some challenges and technicalities, and the marijuana industry is no different from other industries. It has a fair share of its own problems and challenges.
One thing that you need to understand about weed business is that it might be legal in many states, but it’s not legal in U.S Federal law.
How will it affect your marijuana business?
1-You will not be able to keep your profits in any bank.
2-Banks will not give you loans to fund your cannabusiness.
3- Regulations are different in each state so compliance with regulations and documentation will be very time-consuming.
4- It might take some several months to get a license for starting your own marijuana business.
5- With a lot of changing rules and regulations, it might be a risky industry as compared to other industries.