The cannabis industry has become one of the fastest-growing and most lucrative industries in recent years. As more countries embrace the benefits of cannabis and begin the legalization process, the growth of the CBD industry has been consistent and is on its way to continued growth and success.
This guide will provide you with the key steps that you should follow to begin the path of starting a medical marijuana business.
Table of Contents
Getting into the Cannabis Industry
Although there is a high potential for returns when first finding how to get into the medical marijuana business, there are still plenty of factors that you will need to consider in order to develop an effective business plan and be successful. You should consider these questions when learning how to get into the medical marijuana industry:
- Will you be able to obtain the required license or permits?
- Do you know all local regulations surrounding cannabis?
- How will you ensure you have enough money for your startup costs?
- Will you have enough revenue to sustain your business?
- There are a lot of CBD products out there; what will make yours different?
You should have formidable answers to these questions by the time you craft your business plan. These should provide an idea of some of the initial challenges of getting into the medical marijuana business.
When seeking how to get in the cannabis industry, some places will provide a better environment than others. Different countries have different rules, licensing procedures and consumer demands. Some of the best countries to experience how to get into the medical marijuana industry are:
As states in the US continue to embrace recreational marijuana, the US is projected to lead the international marijuana market in sales by 2024. The US has 35 states that have legalized cannabis so far, with more likely to follow. The cannabis industry could grow to contribute up to $130 billion annually into the US economy, making it a great place to business in the industry.
Currently, recreational use is illegal in the UK. However, starting a medical marijuana business could be very lucrative. Medical cannabis has been legal in the UK since November of 2018, and the UK is now the largest CBD market in Europe with over 1.3 million CBD users. It is also legal to grow controlled cannabis crops and sell cannabinoid products under 0.05% THC content.
Since being legalized in 2018, the cannabis industry has grown steadily in Canada. In 2020 alone, cannabis in the country accounted for over 2 billion dollars in retail sales. In Canada, cannabis is legalized for recreational and medicinal use, making it easier to start a CBD business.
Are you curious about How to Get into the Cannabis Industry? Explore our list of CBD conferences on ConferenceCast!
How to Start a Cannabis Business
When you are ready to experience how to get into the cannabis business, there are several steps you should consider:
Find Your Niche
The first step of how to get into the cannabis industry is knowing what type of business you plan on running. There are multiple sectors of the industry that all offer completely different experiences and require different expertise. Different business options in the industry include:
- Production and Manufacturing
- Delivery service
- Cannabis testing
To have a successful business, you should know your sector and make sure you are well-educated on the proper operating procedures.
Study the Legislation Surrounding Cannabis in Your Area
Especially when starting a business, you should never make assumptions. Even if cannabis has been legalized, you should study the laws carefully as there may be nuances involved. For example, in the United States, cannabis was legalized in certain states but not on a federal level, so you may be able to sell the product, but you could run into difficulties in other areas of running a business, like obtaining a loan from a bank.
In some places, cannabis has been legalized for medicinal use but not recreational use, whereas, in others, it has been for both. Local and federal regulations will help you determine if you want to run a recreational marijuana business or a medical cannabis dispensary.
Identify Your Start-Up Costs
When starting your business, your funding is what is going to make or break you. The price of starting a cannabis business may be higher than you think, so you need to have plenty of funding to cover it. Factors like licensing, production, taxes and hiring employees are all going to cost a hefty amount of money before you even begin doing business.
Bear in mind that many banks may not be willing to finance a cannabis business because of remaining stigma or because of questionable legality depending on differences in local and federal legislation, like in the US. Whether you plan on starting your business with the help of investors or through financing, it will be necessary to have a complete understanding of your up-front expenses and determine how you are going to cover them.
Obtain a Cannabis License
Working in the cannabis industry will require that you obtain a license. Licenses to work in the cannabis are not cheap and should be a major consideration in your initial expenses. Licensing requirements will also depend on federal, state or local legislation, so again, make sure you are familiar with local regulations. The application process will look different depending on where you are. The licensure application process can be very complicated and can involve multiple applications, take several months and require thousands of dollars, if not more, to complete.
This process will also largely depend on what sector you are entering. Licenses will look different for cultivators, manufacturers and sellers. Make sure that you know local laws and licensing requirements to meet the proper criteria before beginning the long process.
Build Your Foundation
Whether you are involved in the cultivation or sale of cannabis, you need to consider what it takes to get going. If you are running a cannabis growing business, you will need to locate land and know the materials and labor required for a cannabis farm. If you are in the transportation or delivery sector, ensure that you have all the necessary permits. If you are in the retail sector, you will need to locate a store, determine how to supply it and know where you will be sourcing your cannabis from.
Make sure you have thought through these foundational components to ensure your success and avoid hitting any obstacles.
Understand Your Consumers
Marketing is one of the most crucial factors to any business. When you are first learning how to get into the cannabis business, you need to know about consumer demand in your area and how you will meet demand. This can be challenging since the cannabis industry is still relatively new. In some places, this data is not yet collected because it is illegal. As a result, it will be harder to obtain data and information about consumer demand.
With these barriers in place, it may require a lot more work to build an understanding of your potential consumers. However, this work can be valuable to fostering a successful business by developing a strong customer base and ensuring demand is met. This may include preliminary interviews of customers and consistent surveys for your customers once you begin doing business.
Develop Your Team
Having a knowledgeable and experienced team will be invaluable when getting into the medical marijuana business. Determine what tasks will need to be accomplished and what skills are needed to accomplish them so that you can look for leaders that have these skills and will help your business grow. It helps to identify your own strengths and weaknesses so that you can find individuals that will complement them and fill in the gaps. The best teams are versatile, well-rounded and have a variety of individuals with different strengths.
It is best to create a team that shares your vision and goals toward developing your business. This will ensure that everyone involved is on the same page and prepared for the tasks and effort involved in developing and growing the business. It also helps to avoid conflicts later on.
Know Your Products
This may sound obvious, but you need to know what you are offering and know it well. If you are in the retail sector and have customers looking for a specific strain or seeking specific medical benefits, you should know the benefits of each of your products and be able to point your customer in the right direction. The same goes for the cultivation, manufacturing and all other sectors. Many people enter the cannabis industry and do not have the right knowledge. Customers are less likely to do business with someone who is not knowledgeable about their product or industry. Fortunately, there are plenty of options to expand your knowledge.
Starting a cannabis business is not for all entrepreneurs. The cannabis industry can be highly lucrative, but it is still a new industry with many challenges and risks. However, with the right preparation and dedication, you can develop a successful business.
For more great information on entering the CBD industry, check out our extensive catalog of recorded speeches and seminars from leading industry experts. Gain insider secrets and tricks to running a successful cannabis business, learning about anything from topics like the international cannabis landscape to the future of CBD products.
One of the best ways to expand your knowledge and build your brand is by gathering and networking with others in the industry. We can help you get connected to dozens of yearly cannabis conferences and events, bringing you information on the best conferences worldwide. Explore our list of CBD conferences to help you learn how to get in the cannabis industry.
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