In the past decade, the legal cannabis business has skyrocketed, which now generates billions of dollars annually and has become a fairly lucrative business opportunity for many. There are currently 33 states who have legalized either medical marijuana, recreational marijuana, or both. In the United States alone, there are more than 10,000 legal marijuana businesses; which is considered to be one of our fastest-growing industries.
The marijuana industry generates more than a billion dollars annually. There are currently state-regulated marijuana dispensaries located all across the United States, which are located in the following states: Oregon, California, Washington, Nevada, New Mexico, Arizona, Michigan, Maryland, Rhode Island, New York, New Jersey, Massachusetts, Minnesota, Connecticut, Colorado, and Illinois.
Since Colorado legalizes pot in 2004, the industry has seen significant growth, which has produced more $6 billion in revenue in Colorado alone. The cannabis boom, led by the legalization of cannabis is often compared to the California Gold Rush, which saw a dramatic economic, climate change in the late-1800s. Many industry leaders, companies, and blossoming entrepreneurs such as Anheuser-Busch, Snoop Dog, Coors Brewing, and even Warren Buffet have jumped on-board the marijuana-legalization bandwagon.
Starting a legal cannabis business may seem like a walk in the park, but there are multiple steps that must be in place in order to open a legal cannabis business, which requires more than patience, careful planning, and money. Here are some approaches on how to set-up a legal cannabis business.
How to Set-Up A Legal Cannabis Business
Starting Costs and Creating a Budget
Opening a cannabis business can potentially generate hundreds of thousands of dollars, but it may end up costing you thousands of dollars to set-up, which is why business owners typically will join a pre-existing partnership, search for investors, or try to obtain one or more cannabis business loans. If you are considering entering the cannabis business, you should be unaware of your limited financing options. Most cannabis entrepreneurs are unable to obtain loans from most major banks, which is mainly due to the fact that marijuana is illegal under federal law.
Decide of the Type of Marijuana Business You Want to Open
When it comes to investing in legal marijuana or opening a dispensary, the profit definitely outweighs the risk. If you’re considering going into the cannabis business, you should first decide on the type of business you want to go into, which can be broken down into three main categories; cultivation, infused products, or retail sales.
Obtaining the Correct Licenses
Entry and start-up costs associated with opening a cannabis business can be extremely expensive. You’ll first need to obtain the correct state-issued licenses in order to sell medical or recreational marijuana legally. This is typically between $5,000 and $20,000, which may take several months before you’re finally approved.
Hiring a Good Attorney
The cannabis industry is continually hampered by federal red tape, which is often difficult to navigate around unless you have legal representation on retainer. Even in states where marijuana is legal, there are a plethora of laws and regulations, which can make it difficult to operate a marijuana business. By hiring a lawyer or legal representation, they’ll make sure your permits and licenses are up-to-date.
Other General Factors Include:
- Location: The location of your cannabis business must comply with local zoning laws and regulations, which also requires being a resident of the state your business resides in.
- Criminal Record: If you’re a convicted felon or if you’ve previously been convicted of a drug crime, you’ll likely be prohibited from applying for a marijuana business license.
- Time: Establishing a successful cannabis business requires plenty of time and patience. Depending on the state you live in, securing the proper licensing can take up to 18-months.