A short while ago, being a part of the cannabis industry meant illegal and shady business, but not anymore! With the laws surrounding the use of both medical and recreational marijuana adapting quickly to the demands of the public, the cannabis industry is booming. If you are looking for the right time and opportunity to venture into this business, now is a perfect time. In fact, according to a news report, the worldwide consumer spending on legal cannabis has hit 12.2 billion dollars and will grow by about 38% by the end of this year.
In 1996, California legalized the use of marijuana and since then a large number of states have followed suit. The current industry offers a number of opportunities for motivated and willing entrepreneurs. The following article focuses on some laws you should be aware of if you intend to start a business in the cannabis industry.
A large number of states have legalized marijuana for both medicinal and recreational purposes. However, each state has its own set of unique rules and regulations. You should be aware of the rules and regulations in whichever state you reside.
Navigating through the chaotic laws can be extremely challenging. Even the factors to consider before starting a business vary from state to state. Applying for a license in Louisiana costs only 150 USD whereas in New Jersey it costs about twenty thousand. California takes anywhere between 3 to 10 months to issue a license whereas Washington DC takes 18 months. One final thing to keep in mind is that the federal government of the United States has not legalized the use or distribution of marijuana. This implies that the Justice Department gets to decide whether to enforce the rule. Arming yourself with the knowledge of the state laws will allow you to steer clear of all offenses.
There are mainly three kinds of ventures you can set up in the cannabis industry.
This venture focuses on growing and maintaining cannabis. Not only does it need a lot of horticultural knowledge and equipment it is also heavily regulated by the government and hence could cause problems getting the required license.
This next venture focuses on products infused with marijuana strains for patients and recreational users looking for edibles. These can include direct marijuana edibles, tinctures, and salves.
The final main venture is the distribution of marijuana in any form including strains such as sativa or edibles to authorized customers. While these are hard to start and set up, they can be very lucrative in the long run.
Outside of these three types, you could also consider ventures in the cannabis industry without any risk of falling prey to the ever-changing laws. These ventures could include cannabis lawyers, cannabis app developers, and website developers.
Some states are liberal with handing out licenses whereas others require significant proof of capital and a clean record.
Financing your business has its own set of problems as the federal government controls a large number of banks making it next to impossible to secure funding through them.
Setting Up Your Business
One of the decisions you must make when starting a business in any industry is what kind of ownership model you want your business to follow. The types include owning a business by yourself or converting it into a business entity. Owning a business includes sole proprietorship (Only you are the owner) and a partnership (Agreement between two or more owners). This model makes the owner liable for all debts and obligations.
A business entity (known as a corporation or an LLC) is only liable for business-related debts. The owners and shareholders are not personally liable. Creating a corporation requires registering your company at the state’s business entity filing office.
Another thing to keep in mind when setting up your business is the name and logo you want your business to be associated with. Choosing these requires ensuring that you do not infringe on any intellectual property or trademarks of other already existing companies.
There are a wide variety of advertising forums and venues for you to market your venture. Attending marijuana business trade shows and other related events let you spread the word about your company and what it offers. Advertising comes with its own set of issues in this industry. Only licensed customers can use marijuana products so your potential audience is limited.
Further, you may not be able to promote it on social media and most other platforms due to the difference in state laws. Websites selling mk 677 in Canada do exist and you should consult a lawyer before setting up similar advertising and sales portals.
To ensure that you retain your license once you obtain it, it is necessary to follow the compliance laws. The following are some of the necessary measures you should take to stay compliant and keep your business in the clear,
- Maintain your license and permits
- Keep up with the updated rules and ensure compliance with the same
- Maintain security and surveillance as per standards
- Ensure thorough packaging and detailed labeling of products
- Maintaining and filing annual reports and taxes
Regardless of the risks posed by the changing laws, the “green rush” is fast gaining momentum making right now the best time to move into this industry. Well thought out and researched ventures following tried and tested business models that ensure are almost certain to succeed due to this growing momentum.