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The cannabis boom is reaching full swing. By 2020, it’s expected that the cannabis industry will create up to a quarter of a million new jobs. This makes the cannabis industry a big job-growth driver. Bigger than the traditional big employers, like the government or the manufacturing industry. Medical marijuana sales reached $4.7 billion in 2016, while recreational marijuana sales raked in close to $1.9 billion.
In Oregon, a state that allows recreational use, there were 917 licensed cannabis businesses in February 2017. At the same time, however, there were 1,225 applications for a license waiting to be processed. That’s a lot of interest in an industry that was, until a couple of decades ago, completely illegal. But now, entrepreneurs are lining up for licenses. If you’re thinking about joining them, here are a couple of things you should know.
Start by Looking for Help
The marijuana industry is not an easy industry to enter. You can’t just move to a state that legalized marijuana and start growing and selling from the back of a truck. Even the states that have gone a step beyond allowing medicinal use still keep the industry tightly regulated. And that’s just the beginning of the troubles.
Some states will leave it to the counties to set their own regulations regarding marijuana businesses. If you move to a state that allows some form of legalized marijuana, you still might not be able to set up your business anywhere you like. You could also be facing stiff competition in some markets. Finding financing can be a nightmare because banks usually have a problem working with business in the cannabis industry.
The bottom line is that, right now, the cannabis industry in the United States is a terrain that’s difficult to navigate. The first step you should make should probably be to hire marijuana consultants who will help you make the most important decisions. Consultants will also help you deal with complying with regulations.
Businesses that “Touch the Plant”
One of the ways you can cash in on the cannabis boom is by dealing with the plant and its products directly. These are the business that “touch the plant” and require licensing. It’s important that you decide early on what type of business you’d like to start. The type of business will determine the type of license you need to get. And you can’t use a license for one type of business to open a different type of business.
Usually, licenses are issued for the following types of businesses: cultivators, processors and manufacturers, sellers, transporters and distributors, and lab analyzers. In some states, you might need to get separate licenses for medicinal and recreational businesses. So your first step would be to determine what type of cannabis-related businesses you want to start.
Ideally, you’d want to start doing something you already know how to do. If you already worked in agriculture, for example, you can use your experience to become a marijuana cultivator. If on the other hand, you like to bake, you can start making edible products. Next, you need to find out what type of license you need to apply to before you open the business.
Different states have different laws. Counties and cities can have different regulations than their state. Having professional consultants on your side can be really helpful here. You need to understand what it takes to get a license, how much it costs, and what the license allows you to do.
Ancillary Businesses that Support the Cannabis Industry
You don’t have to deal with marijuana directly if you want to take advantage of the cannabis boom. Businesses that work directly with cannabis need support services, and you can start a business that provides them. That way, you don’t have to meet any additional regulatory demands. Accounting businesses, marketing agencies, and software developers can specialize in servicing cannabis businesses. There’s always a high demand for new and improved growing systems. The same goes for other products used during growing, manufacturing, and distribution of cannabis.
Of course, you can always let your entrepreneurial spirit guide you into uncharted waters. Some people started offering marijuana tours. You can open marijuana-friendly bed-and-breakfasts. There’s a big market opening up for security services providers. It would be difficult to say that the sky is the limit when it comes to ancillary businesses. But you’d be surprised at how many cannabis-friendly endeavors you can successfully set up. If you’re not willing to deal with a lot of bureaucracy, you have your work cut out for you.
