Over 50 countries around the world have legalized some form of medical cannabis, while 6 countries have legalized cannabis (CBD, Hemp, Medical) or marijuana for recreational use by adults.
The global marijuana market (regulated and illicit) is estimated to be worth $344 billion according to a marijuana market research firm, New Frontier Data.
Industrial hemp market is expected to reach over USD $21 billion in seven years according to the Global Industrial Hemp Market – Industry Trends and Forecast To 2027 Report, while the CBD market value is projected to reach over $80 billion in six years.
The growth of the cannabis industry is the result of increasing legalization and demand for cannabis-based products, rising applications in different food products, and growing awareness regarding its therapeutic benefits. More countries are expected to embrace legalization, which will further fuel worldwide demand.
Reputed market research organizations differ in their predictions about how the cannabis market will grow. However, they all agree that it will be a growing market.
If you’re wanting to enter the CBD, Hemp, Medical, or Recreational Marijuana industry, the best time to start was yesterday, the next best time to start is now.
Below is a quick overview of the details and items required for starting a CBD, Hemp, Medical, or Recreational (Adult-use) Marijuana business. We have a much more detailed and thorough Starter Packages that will show you everything you need to know and do – from beginning to end – when starting a cannabis business.
. . .
Choose the Cannabis Business Type(s)
First, you’ll need to decide what type of cannabis business is right for you and what will fit your overall objectives, experience, wants/desires, and budget. The biggest factor that decides this for our clients is the budget they have and what cannabis businesses are legally allowed according to the region’s regulations.
These are the generally allowed business types (which vary based on local laws and regulations):
- Dispensaries/Retail Stores
Online Retail or E-Commerce Website
Mobile Dispensary or Delivery Service
Manufacturing/Processing (oils, edibles, topicals, etc.)
Transportation or Transport-Only
To ultimately determine your preferred business type and see everything involved with starting these businesses, including how much money each cost, see our comprehensive Starter Packages.
Create a Business Plan & Get Funding
Once you’ve decided on the type of business, the next step is to create a business plan which shows you how much everything will cost to get started, down to the penny.
In our experience, new clients completely underestimate how much money it’s going to cost to start and run their business, but they also underestimate how much money it can generate. A business plan also helps keep you organized, make decisions, as well as validates your company and potential in the eyes of investors, partners, and other business associates. In a lot of cases, a business plan or portions of it will be required to be issued your license(s), as well. To say they’re one of the most important steps in starting your business is a huge understatement.
Determine if Licensing is Possible & Available
Now it’s time to see if you can get licensed now or in the near future at your preferred location(s). Your business will need at least one, all the way up to 3 separate licenses to operate legally. Before going any further, you need to research and find the laws for your business and region to see what is legally allowed right now.
If the licensing period has passed, this is a temporary matter and most areas open their programs up to new applicants on a yearly basis. If you’re wanting to be well-prepared and assured you’ll be licensed, start preparing right away because your competitors for these limited licenses are doing it now, so you should be working on it, too.
Understand the Laws & Regulations
Now that you’ve found a location that is licensing or will be in the future, you need to read through the laws and break them down into plain English.
These laws and regulations will dictate the things you can and can’t do with your business. You should know them very well if you want to be in this industry because getting this wrong may result in your business being rejected for licensing, shut down, or possibly even land you in jail.
If you want to save yourself the time and headache of figuring out what the legalese in these documents mean, we have custom-tailored regulation breakdown packages.
Install the Corporate Entity
Now it’s time to install a corporate entity (LLC, Partnership, S-Corp, C-Corp, etc) for your cannabis business in accordance with the requirements set forth in the regulations you’ve found and read through. This step is important for a few reasons:
- Having a corporate entity is required in order to be issued any licenses.
It protects your personal assets from any potential debts, liabilities, and lawsuits.
You will need this to open any bank accounts or payment services.
Identify a Business Location
After familiarizing yourself with the rules and regulations of your preferred area, you should be well-versed in the location requirements for your business. It is now time to find a business location that meets all the legal requirements.
By far, this is the biggest hurdle for any potential business owner and is usually the make-or-break step because, without this, you won’t be issued licenses to operate your cannabis business.
We’re often asked by potential clients if they can get licensed before finding a location. The answer is no, and that’s for a few reasons:
- You’ll need to divulge the business location and show proof that you have a lease or own the property already, before getting a license.
Most cities will require inspections of the property during the licensing process, prior to licensing approval.
Submit Licensing Application(s)
In order for your business to operate legally, you need to be licensed by all the governing bodies of your region – federal, state, county, and/or city. Submitting your licenses and getting them approved can take anywhere from a few weeks to many months.
You need to ensure you have all your application documents and plans perfectly drafted because any errors in your application will only delay the process or result in a denial – costing you valuable time and money.
Install the Operations Infrastructure
While waiting for your licenses to be approved, or immediately after obtaining the permits and licenses, you need to install the operational infrastructure according to the regulatory requirements. Now is the time to hire people, buy equipment, and set up the internal policies and procedures that will ensure legal compliance. If you’re not operating according to regulations, your business will be shut down.
Market & Publicize Your Cannabis Products & Business
A lot of cannabis companies live and die based on how quick and easy they are to find online. With competition always increasing, these businesses no longer sell themselves, so you’ll need to ensure you’ve got a great Marketing & Advertising Plan in place to ensure success. Marketing a cannabis business has many pitfalls and hurdles you’ll have to overcome in order to do this legally and effectively – this is one of the biggest areas where cannabis businesses fail, so don’t write this off as unnecessary or needing little attention.
Pay Yearly Taxes & Renew Licenses
CBD, hemp, medical, or recreational marijuana businesses are only allowed to operate because of the tax revenue they’ll bring in. So it’s important to keep your books in order and have a tax professional prepare your year-end taxes and financial statements. Also, be mindful of your licensing renewal deadlines because the governing bodies may not go out of their way to inform you about renewal deadlines and your license(s) could expire and suddenly you’re operating illegally.
That’s all for now. If you’re serious about getting into this industry and want to know everything you need to do, from start to finish, check out our Starter Packages and get started right away!