How to Get into The Cannabis Industry
Breaking into such a brand-new market can be an exciting and lucrative endeavor, but the cannabis industry, like any other, comes with regulations, positives and negatives that all must be weighed and considered before deciding on how to proceed.
If you already know which sector of the cannabis industry you would like to become involved in, then you are already ahead of the game, but there is still plenty more that you will need to know long before you get a business up and running. Here, you will find a helpful summary of all the cannabis industry basics, including how to open, loans to consider, and so much more.
How to start a marijuana business
Before you start a cannabis industry business, you will need to figure out where you want to be, whether that’s behind the scenes on more of a technical level or all-in with your face on every product sold. There are, of course, many options in between those two extremes, but this is an important first step for all entrepreneurs and business people. Try to narrow down your list of options to two or three viable possibilities before moving onto the next step.
What to know
A lot of people don’t realize how much time, planning, money and energy go into the cannabis industry, and all of that comes from people who are just like you. The next thing you will have to do after settling on a section or two of the market is to research how well the current competition is doing. Companies reporting losses in your local is a significant indicator that those types of marijuana business opportunities might not be profitable.
Often uncovering this revealing data is enough to either solidify your intentions, or make you rethink your entire approach, but it’s much safer to do that before you have a financial investment, so even if research doesn’t show you the incredible potential you had hoped for, now is the perfect time to come up with less risky alternatives.
Marijuana industry opportunities
It is important to look at all available opportunities so that you don’t miss out, and to help below we have laid out a list of exciting cannabis industry options to choose from:
- Cannabis cultivator
- Selling Cannabis products to medical patients, recreational consumers, or both (dry herb, edibles, beverages, concentrates)
- Process and or sell cannabis derivatives (terpenes, seeds, and other non-psychoactive options)
- Produce medicine
- Tools vendor and or setup for private individuals (lights, exhaust system, nutrients, pots, soil, grow tent etc.)
- Industrial scale set up (exhaust, building, lighting, grow tents, etc.)
- Making marijuana concentrates (tincture, BHO, shatter, oil, rosin, hash, etc.)
- Smoking accessories vendor (bongs, pipes, grinders, etc.)
- Indoor consumption venues (vape lounge)
- Cannabis event coordinator
Once you have run the numbers and determined what you would like to do, there are a couple of different options set out for you. You can always secure your own funding and go ahead with opening your very own cannabis industry business from scratch, but there are always business opportunities that are pre-established, which can sometimes offer more security than you’d have from branching out on your own.
How to open a dispensary
One of the first things that new entrepreneurs who are interested in the cannabis industry want to try is a marijuana dispensary. The success of these types of businesses is still difficult to measure, with an ever-changing set of regulations that have hindered financial success thus far. However, if this is something that you want to try, then you will need to come up with a cannabis dispensary plan.
Dispensary business plan
1. Menu choices
This could include a lot more than dry herb, as the majority of successful cannabis dispensaries make a large portion of their income from products and accessories sales.
Aside from selling weed, do you plan on offering any kind of special services to your customers? This is important and should include, in the very least, a skilled budtender on hand, which may increase your overhead costs each year, as good help and skill aren’t going to come cheap. However, those who offer more unique services like strain pairing assistance, rate better with consumers and often make more money by offering a more unique experience. So, it is an essential section of any marijuana business plan.
3. Who will your consumers be?
As much as most enthusiasts delve into the cannabis industry in hopes of serving everyone equally, there are so many different preferences out there that it is nearly impossible to accomplish that kind of goal. Instead, think of one consumer base that you would like to gear towards most, as this will be essential a little further down the line when you seek to obtain funding for your new marijuana business.
The location of your potential cannabis industry business will determine its success. You will need to find storefront’s or other options that are affordable but also easily accessed by the very consumers that you need flowing in the door.
This is often the most difficult part of any cannabis industry start-up, as you will need to be able to pay for the business for the first several months or longer. However long it takes for your marijuana dispensary to start bringing in an income, which can take a while, you will need to finance the business. However, if you have access to your own funding, then this step is easy, but if not, then you will need to look at some of the other opportunities that are available to help.
Getting a loan for a cannabis dispensary can be a bit more challenging than it is for a regular business. Funding tends to come more from private benefactors and companies than it does from banks, as many financial institutions remain firm that they will not directly deal with or relate to the cannabis industry. It’s still a taboo subject in much of the world, so you’ll need to ensure that you are looking in the right place for funding.
Cannabis business loans
All cannabis industry businesses have a variety of options available for loans, and if you aren’t sure where to start, then you might want to look over this helpful list of cannabis business financing opportunities:
- Alternative financing companies
- A business line of credit
- Equipment loans or leasing
- Private equity firm
- Personal loans
- Private investors
- Home equity loans
Marijuana business license
Don’t forget that no matter how successful your marijuana business plan might be, you will need proper licensing to avoid repercussions, and some of it can take a long time to obtain. In some regions like Ontario, the only way to get a license to open a cannabis dispensary is to win a lottery, so it’s important to look at the municipal as well as the federal requirements long before you seek financial planning assistance or loans.
There are so many cool cannabis jobs that can be created as a result of opening a business such as this, which stimulates the local economy and helps to lower unemployment rates by introducing fun and well-paying positions to the job market, and these are just a few of the most popular among the general public:
- Grower (cultivate indoors)
- Farmer (cultivate outdoors)
- Weed delivery driver
Cannabis business resources
The cannabis industry is enticing and ripe for new and exciting prospects and ideas, but most first-time business owners could use some guidance, and there is plenty available if you know where to look, with two of the best and most trusted found at www.canadianstartups.org and www.cultivatecapital.com. If those websites and available specialists are able to provide the assistance that you need, then it’s a good idea to approach your bank’s financial planner for more advice on where to run in your region.