Venturing into the cannabis industry can be challenging, especially due to the diversity in cannabis regulations. Although most states have legalized medical marijuana and some recreational marijuana, cannabis is illegal under federal law. When venturing into the cannabis market, you must comply with the current cannabis laws in your state and adhere to the set regulations.
As more states consider legalizing marijuana, the cannabis business market is up-and-coming for entrepreneurs. According to cannabis business statistics, cannabis sales are projected to reach $50billion by 2026, presenting entrepreneurs with more earning potential.
Here is how to venture into the cannabis business market.
Decide the kind of marijuana business you want to run
First, decide the type of cannabis business you want to venture into. Do you want to cultivate marijuana, start a marijuana dispensary or deliver marijuana products to customers? Ensure you have an idea of what the cannabis market landscape looks like, the earning potentials, the risks, and your competitors before making your final decision.
Try to look for a unique business idea that will expose you to a broad audience in the market. You will also have to spend more time researching the laws surrounding that specific cannabis sector. You can talk to people who have been in the industry to get more genuine opinions.
Establish your business plan
Unlike starting a less strict business such as a restaurant, you need a detailed business plan when starting a marijuana business due to the stringent cannabis laws involved and the fact that they keep on changing. To establish a good cannabis business plan, think about your:
- Business costs.
- Your cannabis suppliers if you intend to outsource from other cannabis growers.
- How you will attract customers.
- What will give your cannabis business a competitive edge in the market?
- How you will ensure your business adheres to state cannabis laws, for instance, having a legal advisor, etc.
Although your business plan may change as the cannabis regulations change, you need to have it in place when starting your cannabis business.
Register your cannabis business name and obtain a license
Your cannabis business will likely be local, so you need to choose the business entity suitable for you, keeping in mind that your business entity impacts the taxes you pay and the risks you are exposed to. Conduct a name search to ascertain the name you want to use is available, then register your business. From there, get the legal permits and licenses from your state’s cannabis authorities to legalize your marijuana start-up.
Register for business tax ID number
When starting a cannabis business, you need a business tax ID number regardless of the state. You can register online in the IRS portal, and it will come in handy when paying your marijuana business taxes.
Look for funding
Now that you have a legal cannabis business start-up, the next thing is to look for funding to grow your business if you can’t cover the costs yourself. You can look for investors to invest in your cannabis business or a lender to give you a loan to expand your cannabis business.
With a strategic plan in place, you can successfully run a cannabis business.