The marijuana industry is changing for the better. As humane marijuana policies are set in motion and more and more states push for legalization, the future is looking greener than ever before. The incentives for starting a legal marijuana business have never been higher, but that doesn’t mean the process is easy.
If you want to know how to start a marijuana business legally, read this guide. From equipment to raising capital to marijuana financing, there is much to learn.
Finding Marijuana Financing
It’s no secret that you need capital to start any kind of business. Finding capital for your marijuana business, however, might be tricky.
Depending on what state you live in, you may have to jump through some regulatory hoops where marijuana financing is concerned. Some of these financing challenges include:
- Submitting an application
- Paying licensing fees
- Startup costs—they can range from $150,000 to millions
- Keeping up to date with federal cannabis laws
Getting a loan from an FDIC-insured bank can be a hassle. Many financial institutions feel—reasonably—uncomfortable about providing loans to cannabis businesses. The threat of facing charges for violating federal marijuana policies often looms over financial institutions’ heads, which accounts for 70% of cannabis businesses not having bank accounts.
If your new marijuana business is in need of financing but you don’t know where to turn, Sweet Leaf Capital can help. We offer a variety of financing and loan products that help you grow your business without money out of your pocket.
Acquiring Marijuana Equipment
To start your business, you need to have the right marijuana equipment for the job.
But first, what are the three main types of marijuana businesses?
- Dispensary: A marijuana shop in your local area
- Cultivation operation: A marijuana farm
- Ancillary business: Services provided without touching the plant
The marijuana equipment you need isn’t limited to the goods themselves. Whether you’re working with the physical product or not, there’s a reason why startup costs are so expensive. Here’s a roundup of costs you should consider:
- Business license
- Tax and seller’s permits
- Rent or real estate
- Interior decor
- Employees’ wages
Additional Hurdles for Cultivators and Manufacturers
Starting a cannabis cultivation operation comes with its own set of costly difficulties.
First, there’s the real estate. The average total investment of a 7,700-square-foot grow house is more than $800,000 if you’re growing more than 1,000 plants.
Depending on your state’s regulatory procedures, getting a cannabis cultivation license can be a long and arduous process. Check your state’s regulatory process to see how long that will be. Some states encourage vertical integration. This means that you must both grow your product and sell it. Other states only allow you to be licensed for one or the other.
Be familiar with your state’s laws so you’ll know what equipment to buy, how much it’s going to cost, and what licenses you’ll need to get started. The equipment used to grow and process your crop is a big (but essential) cost that can’t be ignored.
It’s best to do your research and learn everything you need to know beforehand so you aren’t overwhelmed when you begin.
Choosing Your Location
When determining the best place start a marijuana business, consider hiring a marijuana real-estate agent to ensure that wherever you go, you know you’re welcome.
These agents can also help redirect you to cannabis financing companies like Sweet Leaf Capital that can help you finance your business legally depending on your location.
A Little Planning Goes a Long Way
Starting your own marijuana business can be a daunting task, but if you can overcome marijuana financing hurdles, you’ll be entering into a billion-dollar industry that is growing with every passing year.
If you’d like to learn more about how you can support yourself and your marijuana business through legal financial solutions, contact us and we’ll help you get started.