The Bright Future of the Cannabis Industry
The commercial cannabis industry is on the rise, with an ever-expanding market and projected sales revenue growth. The industry is expected to reach $33.6 billion globally by 2025, compared to $13.4 billion in 2020.
Despite various challenges such as legal obstacles, social stigma, licensing processes, and limited financing options, the marijuana industry continues to thrive.
In this article, we will provide you with essential tips to help you establish a successful cannabis startup.
- In 2020, the states with the highest sales per capita of cannabis were Colorado, Oregon, and Alaska.
- The percentage of adults in the US who reported using marijuana in the past month increased from 7.5% in 2013 to 14% in 2019.
- The U.S. cannabis market employed around 243,700 full-time workers in 2020, with a projected growth of over 400,000 jobs by 2022.
Where is Marijuana Legal?
Recreational use of marijuana is legal in 21 states:
Alaska, Arizona, California, Colorado, Connecticut, Illinois, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, and Washington.
The Cheapest State to Open a Dispensary
Oklahoma is considered the cheapest state to open a dispensary due to its low application and annual renewal fees for licenses.
States like California and Colorado, while pioneers in marijuana legalization, pose challenges for entrepreneurs due to high taxes and licensing fees. Additionally, it’s essential to consider that marijuana laws and regulations may vary between cities within a state.
4 Tips to Stand Out in the Cannabis Business
While the cannabis industry offers tremendous potential for profitability, it’s crucial to stand out in the competitive market. The following tips will help you achieve success:
Choose the Right Marijuana Business Type
The cannabis industry offers various business types to enter the market:
- Dispensary: Retail locations that sell cannabis and cannabis-infused products directly to customers.
- Cultivation: Businesses that grow and harvest cannabis plants and sell raw marijuana to other businesses.
- Manufacturing: Companies that process raw cannabis into products such as edibles, concentrates, topicals, and tinctures.
- Distribution: Businesses that transport cannabis products from producers and wholesalers to retailers or consumers.
Develop a Strong Business Plan
Creating a comprehensive business plan is crucial for the success of your cannabis business. It will help you gauge its viability, secure financing, and guide your operations effectively.
Perform market research to identify your niche and develop a deep understanding of your product’s unique selling points and the daily operations required to sell it. Include financial projections, a management description, and an overall summary of your company in your business plan.
Obtain the Required Licenses and Permits
Before starting your cannabis business, it’s essential to obtain all the necessary licenses and permits. Stay updated with the regulations in your area and utilize cannabis-specific software, websites, and legal services to ensure compliance. Requirements may vary depending on the type of marijuana business.
Securing funding for a cannabis business can be challenging due to the federal illegality of marijuana in the US. Traditional financiers are often hesitant to invest in this industry. However, alternative options such as private investment, grants, and crowdfunding platforms like Fundanna can provide funding opportunities.
The Time to Take Action is Now
Armed with the necessary knowledge and resources, it’s time to turn your cannabis business idea into a reality. Start by finding your niche, conducting market research, obtaining permits and licenses, and then embark on your entrepreneurial journey in the booming cannabis industry.