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Once upon a time – not very long ago, in fact – governments across pretty much all of the world were in agreement on restricting civilian cannabis use. Considered harmful to human health, nation-states banded together in the 20th Century (in line with post-war UN treaties) to outlaw the use, possession, manufacturing and sale of the plant.
With time, people have begun to realise that the controlled use of cannabis can bring about a variety of benefits to the well-being of certain people. This is especially true in the United States – where medicinal and recreational legal cannabis schemes have taken the country by storm.
For this reason, if you wanted to step into the cannabis industry, certain factors need to be acknowledged from the burgeoning market in the USA. Seeing as they have advanced so far ahead of many other countries (such as Australia), it’s only wise to learn from their experience.
How to Start a Canna-Business… According to the United States
Starting a cannabis business can be a very tricky endeavour, indeed.
There’s a range of responsibilities associated with running any business or organisation… but in this case, you’re also dealing with the challenges that come with being on the cutting edge of a fledgling industry.
With that said, if you have a clear and distinct idea in mind, are sure about the type of business you want to start, have a crystallised business plan, and have obtained the legal permit for setting up shop in your preferred jurisdiction (assuming those activities are legalised there), then you’re golden!
Although, there is still the question of cementing relationships with suppliers, kitting out your commercial or industrial space, and marketing to your audience.
Some Considerations Before Stepping Into the World of Cannabis Business
1. Choosing a Business Type
When setting up your business, there are various structures you can choose from; a sole/limited proprietorship, or a corporation/LLC?
It’s important to start off with a business type that serves the broader context of what your company seeks to achieve.
2. Choosing a Suitable Name
Choosing a suitable name can be challenging for most business owners due to the requirement of both creativity and feasibility.
If you’re lucky, you may already have a catchy name and slogan in mind! If not, it’s important to think long and hard about what to call yourself… you need to bring your creative A-game to create an interesting and unique appeal for your business.
3. Drawing Up a Financing Plan
Financing is undoubtedly the most vital element of every business. Being the business owner, you are required to draw up a financial plan for your business.
If you’re planning to set up shop in the US, Michigan’s growing cannabis market will provide you with accurate projection values to help you chalk out your finances.
The only thing you need to ensure is that your financial backdrop remains healthy. Within this, you need to account for monetary setbacks in order to keep your business funded – even under the worst-case scenario.
4. Finding Your Niche
The cannabis industry is extremely competitive.
This is why you need to find your niche. Strategise for how you can set yourself apart from your competitors. Will you do it with unique products, services or marketing?
There needs to be a unique brand value operating within what your business does to attract long-term success in this market.
5. Staying Compliant Within the Laws
Let’s face it: if you’re not playing by the rules, the greatest threat to your business is the legal system itself.
When starting a cannabis business, complying with the bounds of the law in your chosen jurisdiction is essential. You won’t be bothered by the law enforcement agencies if you are complying with the law – it’s that simple.
6. Understanding the Different Laws & Regulations
Understanding the local laws is essential to establishing your business and safeguarding its progression – it’s hard to comply with the law if you don’t have a detailed understanding of what these laws are! As the business owner, it’s on you to educate yourself around these matters – you need to have a solid grasp of state laws to avoid any potential conflicts.
We suggest speaking with some experts in the legal field to confirm that you understand what you’re dealing with.
Benefits of Weed-Related Business
The legal cannabis industry has proven extremely lucrative; generating tens of billions in revenue each year. This is without even considering the economic value of the underground, grey or illegal activity still occurring all across the globe!
Governments and cannabis businesses are aiming to take an increasingly bigger piece of that pie. With every passing year, legalised, taxed and regulated sources of cannabis are becoming more commonplace.
Although the legalisation of cannabis would no doubt spur a variety of societal benefits, one of the most recognisable is the increase in tax revenue for the state. The cannabis industry would also become a stable, legal field – incomes would increase, and jobs would be created through this process. This is what the US experience tells us!
Even in the United States, the legalisation of cannabis isn’t quite yet where it needs to be. It’s still technically illegal, federally… and there is a larger total number of jurisdictions where cannabis is not recreationally legalised. Even with tens of millions of people having gained ‘legal’ access to the plant, the fight isn’t over yet.
The cannabis industry is still operating on shifting legal sands pretty much everywhere. This is why it’s critical to be vigilant of the rules in your state before starting a business there. Pay close attention to any changes being made by the legislature, and do your research.
If you plan to initiate business in a place like Michigan, you won’t have to worry about these legal issues, so much – thanks to the government legalising the use of cannabis state-wide. However, it might be harder to justify in other states. Stay aware of the legal realities – don’t assume you can get away with it, just because other states are doing it!