Cannabis business enthusiasts should stay above board to make a positive impact on the cannabis industry

Published Aug 17, 2019 12:00 p.m. ET
iStock / p_saranya

Marijuana legalization has spread across the world. The cannabis industry is booming economically now more than ever. There are many business people enthusiastic about establishing their own cannabis business. Like any business, the establishment of a cannabis business is a difficult task and requires much thinking and innovative ideas. However, prospective business owners are encouraged to enter the cannabis market, which will help to drive the unemployment rate down by providing cannabis jobs for many people.

Funding for business

Funding for any business is not an easy task, and there is much less funding for cannabis business, then there are for others. Apart from having a good business idea and knowing the demand from consumers, you should have the funds to finance your business. Funding will allow your business to move from an idea to reality. Acquiring funding from investors can be difficult, considering the legalization of cannabis issues in some countries. Some investors are afraid to take a risk with a new industry, so you must be prepared to be denied the help from some investors.

Getting investors to invest in your business will require you to have a solid business plan that includes evidence to support your claims about cannabis and the demand for your business. If you have sources to acquire the funding and your source of funding is legitimate, then this may prevent you from being targeted by local law enforcement agents. A prospective business owner should ensure the legality of the business.

Compliance with the laws and regulations

The cannabis industry is an industry that can be profitable for business owners. However, due to the regulatory issues in the United States, businesses must cross over many legal hurdles. Cannabis is still illegal under federal law in the US. As such, cannabis businesses must be cautious, but they are not breaking the law. This means that you will need to know the laws regarding cannabis in the country you reside. A business enthusiast should also try to stay above board by complying with the laws.

FDA regulations and marketing

Cannabis businesses should not disregard the policies of the FDA, and it is important that business owners hire legal counsel to provide them with necessary information regarding the regulations.

The marketing of CBD products should not violate the FDA rules. CBD products must have an ingredient list, and the labeling on products should not make false claims. As a prospective business owner, you should know that the marketing of CBD products may be limited. It is critical to follow the rules and regulations so that you do not get into any trouble.

Taxation

Businesses should also ensure that their taxes are paid in full so that they do not get in any trouble with the legal authorities. Accounting books and audits should be completed and provided to the necessary authorities. Payment of taxes should be a priority to ensure that your business stays above board.

Food Products-CBD and THC

A business owner who is considering establishing a business that manufacturers CBD products should be aware of the FDA regulations regarding food products. Hemp is now legal, but business owners should be mindful that the FDAsaid that the inclusion of CBD and THC in food is still illegal. Therefore, a business that markets its food products as CBD or THC infused can face legal issues with the relevant authorities.

Prospective business owners should stay updated with the latest cannabis news to be informed on new policies.

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