When selecting a property for your cannabis business, you want to be certain your investment aligns with your goals. At the outset, it’s important to think about how to maximize your cannabis yield in terms of production and financial return regardless of the vertical in which you choose to operate. Whether you’re thinking of buying, leasing, or doing a custom build, we have some tips on what to look for in a piece of commercial real estate — and some pitfalls to avoid.Continue reading
Cannabis businesses have been deemed essential during the COVID-19 pandemic. This is a time of responsibility and opportunity for those in the industry to highlight their commitment to their communities by continuing to serve them while implementing safe operating procedures. It is also a window of opportunity for cannabis branding. There are several phases that brands and consumers are likely to experience as we navigate this difficult time and adjust to a new normal. Here’s a look at the landscape, what to expect, and how to think about cannabis branding today and moving forward.Continue reading
In cities and states where cannabis is legal in some form, governments are introducing social equity programs to address the lack of diversity in the cannabis industry. Local and state lawmakers are weaving social equity programs into legislation, thereby enabling minorities and those impacted by the war on drugs to pursue cannabis business opportunities. For decades, advocates for cannabis social equity and justice have pushed to create equal access and fairness in the cannabis industry. As with most social change, results take time. Below are some of the measures states have taken to grow cannabis social equity programs, and a few ways in which they still fall short.Continue reading
As with most big opportunities, cannabis businesses of every size face risks. A robust cannabis security system mitigates some of those risks while doing more than meets your security camera’s eye. A holistic approach will help protect your business against losses that affect your bottom line and attract negative attention from the press, regulatory agencies, and law enforcement. Learn what a successful security plan entails and how an ounce of loss prevention can be worth many times its weight in cannabis security.Continue reading
When it comes to finding a home for your cannabis operation, you may be challenged by zoning regulations, competition, and a looming deadline. Some cities and states require you to provide proof you’ve already secured compliant cannabis real estate as one of many rigorous criteria to apply for a license. We have some tips for finding and securing cannabis real estate, even in a tight market.Continue reading
How to Get Started in a Legal Cannabis Business
More than half the states in the U.S. have already legalized marijuana in some form. Most of these states have started by legalizing medical marijuana for patients with qualifying conditions, while some states also have programs for recreational cannabis.
The cannabis industry is expected to grow into a $21 billion market by 2021. With business booming and the potential for high return on investment, there’s much interest in starting a legal cannabis business. However, because of the complex cannabis laws and regulations that vary by state, it’s easy to get lost and confused by all the requirements it takes to participate in this multi-billion industry.
Before you start your marijuana business and even consider beginning the application process, you should study your state’s specific marijuana programs, laws, and regulations. Because the legal cannabis industry is relatively young and highly regulated, starting a marijuana business won’t be like launching a regular business.
In this guide, we will briefly discuss the cannabis industry’s history, the unique requirements of becoming a cannabis entrepreneur, and marijuana business ideas. We will also talk about how you can improve your chances of getting a license.
Brief History of the Cannabis Industry in the U.S
Cannabis prohibition dates back to 1937 when the Marihuana Tax Act was passed. The Act levied a tax on anyone who dealt in marijuana, cannabis, or hemp. Just a year later, hemp was declared as the “New Billion Dollar Crop” because of its 25,000+ potential uses. And by 1942, the U.S. Department of Agriculture and the U.S. Army urged farmers to grow hemp. And though the Marihuana Tax Act was rendered unconstitutional by the Supreme Court in 1969, cannabis was classified under Schedule I under the Controlled Substances Act.
It would be decades before the journey toward legalization of marijuana would begin. In 1996, California passed Proposition 215, legalizing the medical use of marijuana in the state. Arizona, Alaska, District of Columbia, Oregon, Washington, Maine, Colorado, Hawaii, and Nevada legalized medical marijuana and developed their own medical marijuana programs over the next four years.
More states would follow suit over the next few decades, with some states legalizing recreational marijuana for adults. In 2018, the passing of the Farm Bill or the Agriculture Improvement Act into law legalized hemp and ended federal prohibition of hemp and hemp-derived products. .
Business Opportunities in the Cannabis Industry
The booming cannabis marketplace means a variety of business opportunities for entrepreneurs looking for their slice of the multi-billion-dollar pie. Because of the many types of cannabis businesses, getting started requires a decision on which area of the sector to focus on. While cannabis businesses now come in all shapes and sizes, the following are the most common marijuana businesses:
Dispensary – Marijuana dispensaries are also referred to as retail stores. They are the physical stores where consumers can buy cannabis products. This type of cannabis business is ideal for the entrepreneur who enjoys contact with the customers. Depending on your state, this could be a recreational or medical marijuana dispensary.
Cultivation Facility – Marijuana cultivation businesses are also known as grow facilities. Depending on the state regulations, marijuana may be grown indoors or outdoors. Cannabis cultivators are typically located in remote areas because of the space requirement. To maintain quality, cultivation businesses have facilities that are climate-controlled, well-ventilated, and have advanced irrigation systems. They are also expected to be highly secured.
Extraction Lab – Extraction labs have advanced extraction systems and extraction technicians that use processes to extract pure compounds from the cannabis plant. These potent extracts are what you will find in commercial products, such as oils, tinctures, and concentrates.
Manufacturer – Marijuana products can be consumed in a multitude of ways. Manufacturers process the cannabis plant to produce a variety of products, such as edibles and concentrates.
Transportation Services – Marijuana transporters get marijuana from point A to point B, safely and legally. Because marijuana is highly regulated, traditional courier services are out of the question. Only licensed marijuana transportation services are allowed to move raw marijuana materials and goods. This type of business will typically require armored vehicles and trained and armed drivers to ensure goods are delivered without incident.
Investing in Cannabis
Starting your own cannabis business operation isn’t the only way to get your start in the marijuana industry. Many people decide that investing in cannabis stocks is a good way for them to understand the industry before fully committing to business ownership. This approach will require market research into the performance of existing cannabis operations and an understanding of industry trends. Educate yourself and stay up-to-date on the latest cannabis business news and the ever-changing rules and regulations of the cannabis industry.
How to Improve Your Chances of Getting Licensed
The highly regulated nature of the cannabis industry makes getting a license for your business to operate legally challenging. And since most license applications are evaluated using a scoring methodology to rank them based on quality, competition is fierce. However, the application process for licensing is complex and rigorous for a reason; it’s to weed out those who do not have a potentially successful business strategy and the ability to operate a legal cannabis business properly.
Completing a marijuana license application is not a one-man job. It requires the expertise and insight of various cannabis professionals – ranging from operations to tax accounting and compliance with cannabis regulations. Some basic requirements the application process include are a well-developed business plan, detailed standard operating procedures (SOPs), and proof of strong financials. Before you begin the application process, you will also need to secure cannabis-friendly real estate that complies with all the zoning laws of your state. You will also need to craft a blueprint of your cannabis business facility, ensuring that it abides by all the compliance laws of your state.
Because of all the requirements, documents, and specialized skills needed to complete a license application, it would be wise to leverage the expertise of a cannabis consulting agency. Cannabis consultancies have teams of experts who specialize in each area of the cannabis industry – from licensing to accounting to compliance to facility design to branding. With years of experience in marijuana licensing and permitting, professional application writers will help you complete each section of the application properly by using an efficient process that saves you time and money.
Realistically, you may only have one shot to secure a cannabis license. Most states have a limited number of marijuana business licenses to award. Once an application window closes, another one won’t likely open unless the state determines that the existing marijuana businesses cannot meet consumer demand. Because cannabis licensing is highly competitive, an experienced cannabis business consulting company will ensure you are equipped with everything you need to make your application stand out.
Before you build your business, you need to understand the complexities of obtaining business licenses in the marijuana industry. Because the industry is highly competitive, and marijuana remains illegal under federal law, your best chance at becoming successful is to leverage the expertise of cannabis professionals who can increase your chances of getting licensed while ensuring you remain compliant with the law.
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The Ultimate Guide to Cannabis Consulting Services
The cannabis industry has come a long way, evolving exponentially in just the last two decades. With cannabis laws and regulations established on a state level, each state will have its own unique marijuana programs. And with the recent passing of the 2018 Farm Bill that legalized hemp and hemp-derived products on a federal level, the negative perception that has long lingered around cannabis and marijuana continues to fade.
With the remaining stigma surrounding cannabis decreasing also comes more entrepreneurs who want to participate in what is predicted to become a multi-billion industry. However, because most legal cannabis programs are still in their infancy, there is still much to learn.
Business owners who want to get into the legal cannabis space can’t approach the marijuana industry without in-depth knowledge and insight into cannabis laws, regulations, and compliance. While hemp is legal on a federal level, marijuana legalization varies from state to state, with each state having its own cannabis laws and marijuana programs. Some have both legal recreational and medical marijuana programs, while most only allow medicinal use of marijuana. Some states have only decriminalized marijuana by classifying possession of small amounts as a misdemeanor or punishable by a citation or fine. However, some states have not legalized cannabis on any level.
Navigating the complex cannabis industry can be challenging to do entirely on your own. The best way to enter the marketplace is by consulting marijuana business professionals. In this definitive guide, we will discuss how to get started in the legal cannabis industry, what a cannabis consulting firm can do for you, and how to choose a cannabis consulting company.
How to Get Started in a Legal Cannabis Business
Because cannabis is regulated at a state level in the U.S, you need to know the specific laws and regulations of your state before you embark into the world of cannabis and plan to start your cannabis business. The legal cannabis industry is young and therefore, ever-changing. Policies, rules, and regulations evolve as more cannabis businesses come into play and states learn more about consumer demand and the marketplace.
Whether your plans are to open a dispensary or cultivation facility, you need more than a basic understanding of the industry to become successful. If you do not have the expertise, it would help to partner with a consultant you can trust. Here are some basic first steps to get started in a legal cannabis business:
Decide on the Type of Marijuana Business
When you apply for a cannabis business license, you will need to accomplish the specific license application for the type of cannabis business you intend to operate. The cannabis industry is mostly known for two major types of business – cultivators and dispensaries. However, there are many opportunities in the cannabis business space.
The names of the business types will differ from state to state. For example, one state may refer to what another state will call a cultivator as a marijuana grower. Another state will classify a cannabis dispensary as a retail store. Some states only have business permits for manufacturing, where everything from growing to processing and packaging takes place. And in some places, a dispensary for medical cannabis is referred to as a cannabis pharmacy. Recreational marijuana may also be referred to as “adult use” marijuana in other states. This is why it’s important to familiarize yourself with the different American cannabis terms, particularly the one used primarily in your state. The following are marijuana businesses to consider:
- Breeder – Breeders focus on developing high-quality cannabis seeds, creating new strains, and experimenting with cannabis traits.
- Cultivator – Cultivators are focused on growing cannabis. Depending on the state’s marijuana cultivation policies and regulations, this may mean a requirement to grow marijuana indoors in a climate-controlled, highly secured facility. These types of cannabis business typically require the biggest investment because of the equipment and technology needed to produce the highest quality plant.
- Dispensary – A marijuana dispensary or retailer is the physical store where you can buy marijuana products. Therefore, consumers are most familiar with dispensaries, as this is where they encounter the product itself. Because dispensaries are where you can purchase medical and recreational marijuana, they are highly regulated and secured.
- Extractor – Marijuana processors may also be referred to as extractors. Extractors take the raw cannabis plant to extract concentrates, such as cannabinoids or THC. Extraction facilities require the right equipment, technology, and intimate knowledge of the cannabis extraction processes and controls.
- Manufacturer – Some states will only have licenses for manufacturers and dispensaries. Manufacturing includes growing, processing, packing and labeling, and distributing marijuana products to licensed dispensaries.
- Ancillary Service Provider – Ancillary businesses provide B2B services to other marijuana businesses. Ancillary cannabis businesses provide relevant services without “touching” the plant; they are typically marketing agencies, security companies, payment processors, and so on.
Prepare a Business Plan
One of the main requirements of the marijuana business application process is to provide a business plan. The quality of your business plan won’t just impact your chances of winning a business license, but it will also help secure investors.
Once you have determined the type of cannabis business, you need to work on the details, such as real estate, business strategy, team, and financials. Your business plan will detail your business name, location, management team, target market, competition, business model, and funding needs. It should also include your plans on how to turn a profit, attract customers, and a value proposition.
Beyond showing how you plan to create your company; your business plan should also demonstrate how you intend to sustain it and make it stand out. Application evaluators and investors will want to see creativity and strategy on how you will remain competitive and fill gaps in the cannabis market. Your business plan must also prove how you will accomplish all this while remaining compliant with the state’s laws and regulations.
Register Your Marijuana Business and Obtain License
Choose the business entity that is right for you, keeping in mind that the different business entities come with their own taxes and risk levels. Before choosing a name for your marijuana business, check to see if your state has specific rules and regulations when it comes to business names for cannabis businesses. When registering your cannabis business, remember that you may have other requirements that a regular business would not typically have.
The laws and regulations for starting a cannabis business will depend on the state. Therefore, there will be different registration processes, business license types, and requirements. Some states announce specific windows when applications will be accepted; some states will accept applications year-round.
Learn Your State’s Cannabis Laws
Your best chance at becoming successful in the marijuana marketplace is to have an understanding of your state’s cannabis laws. Engage an experienced attorney or a cannabis consultant who will educate you on applicable laws. From the design and construction of the facility to the business permits, a cannabis business can cost you hundreds of thousands of dollars. A trusted advisor or cannabis consultant will ensure you follow all the state marijuana laws and regulations to ensure you don’t put your investment at risk.
What a Cannabis Consulting Company Can Do for You
The complexities of all the moving parts of launching a cannabis business can be too challenging and confusing for a business owner who only has basic knowledge of the legal marijuana industry.
Cannabis consulting firms help entrepreneurs launch and establish their marijuana business. They not only help startups but also existing cannabis companies that may want to expand. It’s tempting to save money and go at it on your own. Here are the main services that professional cannabis consultants can provide their clients:
Cannabis Business Tours – From cultivation and extraction to retail, there are various types of cannabis businesses. Each type of marijuana business will have different facility designs, daily operational goals, equipment, and so on. So before you spend a significant amount of time conceptualizing your marijuana business, you need an idea of the unique requirements of your facility. The best way to gain a better understanding of the type of cannabis business you intend to launch or invest in is to visit a facility that is already operational.
Established cannabis consultants typically have an extensive business directory and networks in the legal cannabis industry. By giving you access to a cannabis company that has a good track record, operational management, and business model, you gain insight into what it truly takes to operate your own marijuana business.
Facility Design Build – Mistakes in planning and engineering can be costly and set your timeline back, which not only costs time but also money. Without adequate knowledge in facility design, you may be taken advantage of, and construction could go on for much longer than necessary. For example, an outdoor grow facility or a greenhouse will differ from an indoor cultivation facility. Each facility and state will have its own set of zoning and planning laws, safety and security standards, and municipality regulations.
To ensure you’re investing your funds wisely, a cannabis consulting firm can work as the design-build team that will craft a blueprint of your facility, including everything from HVAC systems to environmental controls. The cannabis consulting firm will have their own team of architects and construction professionals, including a project manager, engineer, electrician, plumber, HVAC technician, and general laborers, that specialize in designing and constructing efficient and compliant cannabis facilities.
The beauty of having the design and construction of your facility under one contract is dealing with one project manager. This decreases miscommunications and bottlenecks, which increases organization and productivity and ensures construction is completed according to the timeline.
Cannabis License – You can’t participate in the legal cannabis industry without a business license. Because marijuana laws and regulations differ from state to state, your state will have its own license application process. The requirements will also depend on the type of cannabis business you are applying for – recreational or medical cannabis license.
The cannabis license application process is rigorous. The cannabis industry is highly regulated, and competition is fierce, as each state will likely have a limited number of licenses to award. Therefore, your application will need to stand out. The whole application process will probably involve completing dozens of sections. Some sections will have a word count limit, which makes it crucial to write in a clear and concise manner. You will also need a well-thought-out business plan, proper documentation authorization, contracts with trusting partners, and standard operating procedures. This includes showing that you have a security infrastructure in place to safeguard your legal marijuana business.
Many states use a scoring methodology to rank permit applications. Therefore, your chances of being awarded a coveted license is determined by the quality of your application. Licensing consulting gives you an edge when it comes to the highly competitive nature of marijuana business applications. By utilizing the services of a professional application writer, you increase your chances of being awarded a license significantly. Expert cannabis application writers have an in-depth understanding of the specific requirements crucial for creating a successful application. Their expert writing can help you demonstrate your ability to fulfill claims.
Standard Operating Procedures (SOPs) – One of the most crucial requirements of your cannabis application is showing your ability to adapt to regulation changes, stay organized, and achieve compliance. You can do this by outlining your business’s Standard Operating Procedures (SOPs). SOP requirements will typically involve employee documentation, including training manuals. SOPs should contain processing procedures, safety and health protocols, security measures, and emergency practices. SOPs should also contain procedures on how you will handle cash, maintain financial records, sales processes, marketing, and customer service.
A cannabis consulting company can help you not only create proper SOPs but ensure you are implementing them properly. Cannabis consulting companies have expert technical writers who can create detailed, step-by-step SOPs for your business that display your facility’s ability to operate in accordance with the state’s specific marijuana laws and regulations. An experienced SOP writer will ensure your processes are described in-depth, while remaining easy to read and understand.
METRC and Cannabis Business Compliance – The Marijuana Enforcement Tracking Reporting Compliance (METRC) is an elaborate cannabis compliance system required by some states. The system helps you monitor and verify reported cannabis inventories. It proactively analyzes trends and stays on top of cannabis news to assess risk and identify non-compliant behavior. It is currently a requirement for all cannabis businesses of all types in 14 states to follow a product back to its origins, should it become a public health concern. If the METRC system is a requirement in your state, a cannabis consulting company can provide METRC training, reconciliation services, and perform compliance audits.
Not adhering to your state’s established cannabis laws, standards, and policies can result in the suspension, revocation, or cancellation of your business license. The cannabis consulting agency will have a team of expert compliance consultants that will help keep you on top of cannabis compliance and regulations, which are ever-changing. By complying with relevant laws, your cannabis business stays competitive and on the radar as a reliable and law-abiding cannabis business.
Accounting – Maintaining financials, accounting, and staying compliant with tax regulations can be intimidating. A marijuana consulting firm can help organize your business’s accounting finances, thanks to their knowledge of the laws and regulations surrounding cannabis accounting and cannabis tax trends.
Marijuana Business Marketing and Branding – The right cannabis consulting agency wants you to succeed. To ensure you remain competitive and relevant, they can provide marketing services that increase brand awareness and improve brand development.
Because marijuana remains illegal on a federal level, it’s important to remember that your state may have certain restrictions when it comes to marketing marijuana. Because a cannabis consulting company has extensive knowledge in specific state marijuana marketing laws, they will ensure there is nothing illegal about your branding and marketing campaigns. This includes everything from your web design and your social media content to ad campaigns on other media outlets. The marijuana consulting company can also implement your online marketing strategy, while keeping in mind compliance regulations.
Investing in the Rapidly Expanding Legal Marijuana Market
Entering the cannabis industry doesn’t necessarily mean putting up your own business. A way to get started in legal marijuana businesses is by investing in cannabis stocks, cannabis companies, and more. A good place to start is to invest in one of the hundreds of cannabis companies currently on the stock exchange. A cannabis business consultancy can also offer their expertise on how to invest intelligently so you get your return on investment.
Cannabis consulting companies provide a wide range of services. As the business owner, you are in control, running your business the way you planned. However, the right cannabis consultant is there as a strategic partner to ensure your investment is safeguarded and that you ultimately enjoy a significant ROI. Because comprehensive cannabis business consulting agencies have a team of cannabis advisors ranging from professional application writers and facility design teams to branding experts and cannabis compliance officers, they ensure you stay on track, compliant, competitive, and successful in the cannabis industry.