The buzz surrounding marijuana is very real. In 2013, cannabis sales in North America topped US$3.7 billion, a 65.7 percent increase over 2012, according to a reliable report by a top marijuana consulting firm. And these numbers only include sales at licensed cannabis dispensaries, not on the black market.
The American public’s attitude toward marijuana has changed dramatically in the past few decades, particularly since California passed the nation’s first medical marijuana law in 1996. Today, 42 states and California., have legalized marijuana for medical purposes, and four states including, California., have legalized it for recreational use.
According to polls conducted by the Pew Research Center, 63 percent of Americans support legalized marijuana. Twenty-six percent oppose legalization. As state laws have changed, entrepreneurs have started to flock to this new industry. Now, weed shop businesses and marijuana dispensaries are popping up in major cities across the country. But starting a marijuana dispensary business isn’t easy. It requires plenty of patience and hard work.
Yes, the cannabis industry is growing. And, yes, there’s a lot of money to be made in it. But is it really for you? To help make up your mind, we’ve broken down some of the key aspects of starting a marijuana business.
In order to start a marijuana business, you need to know what part of the business you want to get into. You want to open a marijuana business because you are passionate about the product, not because you are hung up on potential profits. If you’re starting a marijuana business, it’s never with the intention of getting rich quick. So, when it comes time to decide how to incorporate your new company or what state in which to operate in, you have to make sure that the partners in your company are in it for the long haul. That’s why you need to actualize your ideas before moving forward.
Basically, the first step is to check the current laws where you live. Every state has laws regarding how you can sell marijuana legally if they allow it at all, so it’s wise to be aware of them before you start spending your time and money on this business idea. Input your address into the map above to see what the marijuana laws are for your state.
There are many aspects to consider when developing a business plan. It’s vital to create one for your cannabis business, no matter how small it is, because it will help you ensure that you are on the right track. A business plan serves as a frame of reference that can be used to direct your actions and gauge your progress. With the cannabis industry undergoing constant change due to new legal developments, it’s important to have an up-to-date business plan rather than making decisions based on outdated laws or regulations.
When starting a marijuana business, your business plan will need to be a bit more detailed than it would be if you were opening a less strictly regulated business like a restaurant or jewelry
Next, get your financials in order. When you’re opening a marijuana business, it pays to be conservative. You’ll need to build up a solid business foundation from the start. Use conservative estimates when planning out your expenses and projections.
If you’re considering opening a dispensary or cannabis business, you have the chance to become one of the pioneers in this industry—and let me tell you, it’s not going to be an easy one. This is why it’s vital for you to register your business as soon as possible.
The best way for a cannabis business to protect itself from the feds is to register its federal corporation, LLC or business name with your state’s legal marijuana regulatory agency. This entity will help you push back against the federal government if it attempts to seize your assets; and it can also help you to be listed as a marijuana business in any advertising and marketing material you create and distribute.
During the registration process, each state will certainly want to know the name of your company, both the business name and the doing-business-as (DBA) name. In addition, you’ll need to choose a business name for your marijuana business. This process can be a bit tricky because you have to verify that the names you’re thinking of aren’t already being used, and then you have to rent or reserve those names.
Taxes are a headache for all business owners, especially when you add in the complexity of being a marijuana business owner. Every entrepreneur faces the same challenge when starting out. It doesn’t matter what industry you’re in, or if you have a new business start-up or an established one. Your challenge is to find ways to grow your company, but without losing money. There are plenty of tools and strategies that will help you succeed financially as an entrepreneur, and paying attention to your taxes is one of them.
To better understand your state tax obligations, it is best to contact the relevant agencies who are responsible for collecting tax.
We all know that the use, distribution, and possession of marijuana for nonmedical purposes was already legalized in California. The California Bureau of Cannabis Control (BCC) is accepting applications for temporary licenses to operate a cannabis business in California. Businesses that hold temporary licenses will be allowed to operate while their application packages are being reviewed. Businesses that want to be legal under state law will need to take a number of steps to comply with rules for registration, taxation and more. Those interested in selling or growing marijuana can apply for a temporary business license during a 60-day period.
Takeaway: Any business that can be built upon an industry that is relatively new, growing day by day, and one that people are starved for information about will do well. This is why so many entrepreneurs are flocking to start their own dispensary. And who knows, maybe they’ll have you to thank in part for their success. Recreational and medical marijuana is here to stay, get in on it now while it’s hot.