How to Start a Marijuana Business: The Ultimate Guide
There has never been a better time to start a marijuana business. As time goes on, attitudes towards marijuana around the world are loosening up. More people than ever are starting to see the benefits of marijuana for both recreational and medical purposes. Many countries are moving further towards marijuana legalization, and Canada is one of the best places to start a marijuana business right now.
Marijuana is now legal for all purposes in Canada. Anyone over the age of 19 (18 in Alberta and Quebec) can buy marijuana in stores in all kinds of forms. Consumers can even buy marijuana online. With the growing love and demand for marijuana, it’s a fantastic time for opportunistic entrepreneurs to get involved in the marijuana industry.
Starting a dispensary or marijuana growing operation can be a little tricky. Depending on where you’re operating, you might have to wait a while to get licensing. However, growing, manufacturing, and selling marijuana aren’t your only options. There’s also a huge demand for smoking accessories and ancillary services such as marketing, accounting, and consulting for marijuana businesses. If you can find a suitable niche, you could get a foothold in this rapidly growing industry.
Of course, starting a business takes a lot of planning and research. So how should you go about getting into the marijuana industry? Here’s the ultimate guide on how to start a marijuana business.
How To Start A Marijuana Business
Like with any other business, there are a lot of things to consider before you start a marijuana business. Of course, you’re going to need to plan out where to operate, who you’re trying to appeal to, how you’re going to fund your business, how your business will profit, and what exactly you’re planning to do.
Getting involved in the marijuana industry also comes with some unique obstacles and challenges. Marijuana is now legal throughout Canada, but you’ll still have to go through some legal complications before starting a marijuana business. If you’re planning to grow, produce or package cannabis products, you’ll need to apply for a licence before you can operate.
You’ll also need to consider that different provinces and territories have different rules and regulations. Some only allow government-run cannabis stores whereas some allow you to apply for a retail licence to sell cannabis. It’s worth researching where you plan to operate before you rush into trying to start a dispensary or growing operation.
However, it’s also worth considering that growing and cultivating aren’t your only options. With so many marijuana businesses cropping up in Canada, you might want to consider offering B2B marijuana services. There’s now a big demand for services such as marketing, legal advice, accounting, branding, and more tailored to marijuana businesses. If you get into one of these niches early, you could stand to make huge profits.
You’re going to need a lot of planning and likely a lot of help when it comes to running a marijuana business- especially as there can be many legal complications. However, with the industry growing fast and consumer demand rising, it’s a great time to get involved.
How To Get A Cannabis Licence
While there are many kinds of businesses you can start in the marijuana industry, you’ll need special licensing for some. In particular, you’re going to need to apply for a cannabis licence from the government if you plan to grow, manufacture, sell or package marijuana products.
You can apply for a cannabis licence online at the Government of Canada website. The law states that you must apply for a licence if you’re cultivating, producing or packaging cannabis products. You won’t need licensing if you’re offering ancillary services or if you’re planning to grow, produce or sell industrial hemp products.
You’ll need a CRA cannabis licence if you plan to do any of these things. Medical cannabis retailers will also need a licence from Health Canada. Businesses planning to package cannabis products will also need to register for the cannabis stamping regime before they start operating.
A cannabis licence is valid for up to 2 years. Once your license expires, you’ll need to renew it as it does not automatically renew. You’ll also need to meet a list of eligibility requirements, which you can see on the Government of Canada website.
Keep in mind that you may also need to gain licensing for the province or territory you plan to operate in. Some provinces only issue a limited amount of dispensary licenses and some only allow government-run stores. Make sure you do your research before starting a growing, retailing or packaging business.
Why You Should Start A Marijuana Business
There are plenty of great reasons to start a marijuana business right now. A recent report from Grand View Research projects that the marijuana industry could be worth USD 66.3 billion by 2025, showing just how much potential the industry has.
While more users are beginning to enjoy marijuana for recreational use, it’s also becoming popular for therapeutic use. Many people now turn to marijuana to help with conditions such as chronic pain, anxiety disorders, depression, insomnia and other sleep disorders, neurological conditions, and various other serious health issues. There’s an increasing amount of support for both the recreational and medical use of marijuana, and the more the demand grows for marijuana, the better the profits will be.
Not only will there be more consumers to cater to, but there’ll also be more marijuana businesses. Many of these companies will be looking for services such as packaging, transportation, marketing, legal advice, accounting, and more. Entrepreneurs can get ahead of the market by offering ancillary services specifically tailored to marijuana companies.
What To Include In Your Marijuana Business Plan
If you’re planning on starting a marijuana business, you’ll need a thorough business plan. Having a business plan will help you ensure your business operates successfully. It can also help catch the interest of investors. Planning is especially important for marijuana businesses- especially as many unique challenges come with it.
Of course, knowing what kind of business you’ll be operating and how you plan to operate it is crucial. Dispensaries might want to consider how they’re going to position and brand themselves to make them stand out ahead of competitors. Marijuana B2B services will need to consider what they can offer to marijuana businesses to get them interested.
Location can also be a key factor. Rules and regulations on licensing and who you can sell to vary between provinces, so do your research and figure out where the best spot for your business is. Ancillary services will want to consider where they can reach the most businesses. You can also consider operating online.
You should also think about who you plan to sell to. Marijuana appeals to many demographics nowadays, but some marijuana businesses make themselves stand out by targeting a specific subgroup such as medical users or college students. Knowing who you’re going to target and how you’re going to reach them is important for marketing.
It’s essential to map out what you’re going to need to spend to get your business up and running. Stock isn’t your only concern- you’ll also need to think about logistics, licensing costs, legal costs, staffing, and the costs that come with renting or buying a business location. Make sure you know exactly what you need to spend before you start seeking funding.
It’s also important to figure out how your business is going to profit. Calculating projected profits is extremely useful, especially when it comes to getting funding. Make goals and targets for your business and think about how you’re going to achieve them.
Types Of Marijuana Businesses To Start
As the marijuana industry grows, so do the companies and services that come along with it. You now have a lot of choices to consider when it comes to starting a marijuana business.
Starting a dispensary or cannabis store is always a profitable choice. However, it’s also one of the most challenging. Depending on where you plan to start your business, you may be waiting a while to gain licensing. You’ll also have a lot of competition.
Marijuana cultivation is also highly profitable. But again, there are a lot of challenges when it comes to licensing, funding, and getting everything set up in the first place. Marijuana packaging is another business idea that you’ll also need licensing for.
Aside from the obvious choices, you have many other options. For instance, apps aimed at marijuana users or marijuana businesses are becoming increasingly popular. Some tech entrepreneurs have started business directories, social networks, and various mobile apps revolving around marijuana.
There’s also a growing demand for B2B services. If you’re experienced in any kind of B2B services such as marketing, accounting or business law, you might want to make a service aimed at marijuana businesses. Putting in the research and showing these companies that you can tailor your services to them can go a long way.
You might want to take inspiration from other successful marijuana companies. Alternatively, you can get ahead of the competition by coming up with something new and unique.
Funding Your Marijuana Business
Funding your marijuana business might require an alternative approach to funding other kinds of startups. Business loans aren’t available in the United States for marijuana businesses due to legal complications. While marijuana businesses in Canada may have an easier time getting business loans, some banks are still wary about funding the marijuana industry.
Fortunately, you have plenty of options when it comes to funding a marijuana startup. Many marijuana businesses seek out investors. Since the industry is rapidly gaining pace, many enthusiastic investors are looking to invest in marijuana businesses. You can find marijuana investors via business events, business directories or through networking both online and in person.
You might also want to consider crowdfunding. Crowdfunding through sites like Kickstarter has become a godsend for many startup businesses. There are now sites dedicated to crowdfunding for marijuana businesses, such as Fundanna. One Canadian cannabis company raised C$6.2 million through crowdfunding, showing just how successful it can be.
You could even use your own funds. Many entrepreneurs build startups purely from their personal savings or personal loans. While it’s riskier than other methods, it can pay off big time. It’s especially useful for marijuana businesses that don’t require a lot of funding, such as ancillary services.
Before you seek out funding, make sure you plan out how much money you’ll need for your business. Remember that your inventory and location aren’t the only costs. You’ll also need to consider the costs of staffing, equipment, maintenance, legal costs, upkeep, and more. Knowing how much funding you’ll need and projected profits is especially useful when you’re looking for investors and funders.
Marketing Your Cannabis Business
Marketing your business can also be an obstacle for marijuana businesses. There are certain restrictions on how you can advertise and market marijuana in Canada. Most importantly, you can’t use mass marketing such as billboards or TV and radio commercials and should never market to young people.
You should also be careful with digital marketing. Although many marijuana businesses use methods such as social media marketing effectively, it can be tricky on some platforms. Facebook bans all kinds of cannabis advertising, so it’s best to avoid it for marketing your cannabis business. Google also restricts advertising for marijuana businesses.
While there are some challenges, there’s still plenty of impactful ways to market your marijuana business. You should make use of marijuana-friendly platforms as much as possible. For instance, you can use cannabis-based social networks and directories like WeedLife, Leafly and WeedMaps. You can also market to consumers directly at marijuana events and trade shows.
When it comes to marketing your marijuana business, it’s best to seek help from marijuana marketing services that understand the complications and restrictions when it comes to marijuana marketing.
Starting a marijuana business is a great idea for any aspiring entrepreneur interested in the industry. Demand for marijuana is growing, as is the demand for marijuana-based services. Although running a marijuana business comes with some unique challenges, such as licensing and how to market your business, it’s still an exciting and worthwhile industry with plenty of potential for huge profits.