In 38 states, marijuana is now legal medically or recreationally, so it is a viable and exciting industry if you want to start your own business. This means people are demanding marijuana more and more, so it is a potent industry to enter for entrepreneurs.
Of course, because of this business’s limited history, no one can be completely confident in how cannabis businesses will do in the long term. A significant factor to mull over is your community’s demand and how you can make yourself stand out from your competitors. That said, sales of cannabis are expected to hit $50 billion by 2026 in Colorado alone….so if you know what you’re doing, this is a business to consider.
If this sounds like your type of gig, here’s how to start your marijuana business:
What Type of Business?
You know you want to be in the marijuana business, but which part? Do you want to run a dispensary, grow marijuana, sell marijuana-based products online, or something else? You cannot form your marijuana business until you know exactly what you want to do.
Keep in mind that the laws governing marijuana sales vary by state, so you need to know your local legal landscape before investing your time and money. Talking to people working in the trade in your area is the best place to start.
Come Up With a Business Plan
When you begin your marijuana business, you need a detailed business plan. First, you must be sure that you are following all state laws. From the place you want to open your doors to who your vendors and suppliers are, be sure you are legal.
People active in the business note that there are many regulations, and they change regularly, so your business plan may have to shift as the legal winds do. Some of the key aspects of your business plan will be:
- Business costs and when and how you will make money
- How you are going to market to potential customers
- What will make your marijuana business different from others
- Where your business will be
- Who your vendors and suppliers are
- Who your attorney will be – it is strongly recommended to have an attorney on call who specializes in the legal aspects of the marijuana business in your state
Get Licenses and Permits
All states have different laws regarding starting a marijuana business. So, there will be various business licenses, permits, and registrations needed depending on your state. Do your homework, and ideally, talk to a lawyer to help you understand how to register your business and get the permits you need legally.
Before you begin your business, know the licensing and regulatory bodies you must comply with to keep your business above board.
Prepare to Pay Taxes
No matter which state you are in, you should get your business tax ID number or EIN to pay taxes on your revenue. You are going to need your EIN when tax season comes. You also need it when you open a business bank account or attempt to get funding.
Many new businesses have high startup costs, and they can be particularly so with a marijuana business. If, for example, you want to run a dispensary, you need a license to sell medical marijuana. You probably need to pay around $5000 for an application fee, as well as high rents, taxes, few write-offs, and licensing costs.
So, starting a marijuana business takes some effort, but marijuana legalization is spreading, and there is no doubt there is plenty of cash to be made in this booming industry.