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In 2022, legal U.S. cannabis sales exceeded $30 billion with the launch of new markets and the growth of current markets. New Frontier Data expects global cannabis sales to reach $51 billion by 2025.
Despite the COVID-19 pandemic, its consequences on the global economy, and a lack of federal legalization, the cannabis industry is thriving.
Learning how to start a cannabis business requires a solid strategy to weather the challenges of the marijuana industry.
Starting a successful cannabis business in 2023 is possible with the right guidance, planning, and financing. New marijuana business ventures need to consider everything, including the application process, startup costs, funding, and state regulations.
Choose Your Cannabis Business Type
In the cannabis industry, there are many different plant-touching segments, including cannabis cultivation, extraction, retail, and ancillary businesses that provide essential services such as accounting, insurance, security, real estate, and marketing.
Ancillary businesses do not have to worry about the red tape that plant-touching marijuana businesses face.
In some states, vertical integration is allowed or required, which means that a marijuana business must grow, process, and deliver the cannabis they sell.
In other states, vertical integration is not required, and operators can apply to get a particular cannabis license.
Research Local, State, and Federal Cannabis Laws
Before starting your marijuana business, research the legality of cannabis in your city, county, and state.
Is cannabis legal for medical and/or recreational use? A few states are expected to launch their markets sometime in 2023. Knowing the application deadlines and launch date of cannabis markets can help aspiring cannabis entrepreneurs start on the right foot.
Cannabis entrepreneurs should also look at the states that could legalize marijuana in 2024. Staying up-to-date with cannabis legalization news can inform business owners who want to start a business or expand in certain states.
Many marijuana entrepreneurs in the legal cannabis industry are betting big on hemp-derived cannabidiol (CBD) products due to their federally legal status.
Under federal law, hemp-derived CBD products containing less than 0.3% THC by dry weight are legal. While CBD may be legal, it may not be legal to ship to certain states, and certain CBD-derived products may be restricted.
Create a Cannabis Dream Team
For long-term success, cannabis entrepreneurs must create a team of experienced workers with the right talent.
Business employees can range from dispensary budtenders to an experienced attorney that can provide you with legal counsel on the latest cannabis industry laws.
When hiring employees for your company, direct cannabis experience should not be a requirement. Since the cannabis space is a relatively new industry, you may need to hire someone outside of the industry who has the right transferable skills.
Learn About the Cannabis Industry Challenges
Starting a cannabis business requires understanding your licensing application process and the different laws, including state law and laws on the federal level, that shape the legal cannabis industry. These marijuana laws and consumer trends are constantly changing in the industry.
Whether you are new to the new industry or are seasoned in the world of cannabis, a comprehensive cannabis education can prepare your marijuana business to compete with other businesses, some of which may be vertically integrated and have operations in multiple markets.
Cannabis Training University is the world's most renowned online industry training program, helping students grow their hobbies, careers, or businesses. Our complete curriculum can guide you through the essentials of starting a cannabis business and covers the following topics:
- Government regulations
- Cannabis industry challenges
- Creating a business plan
- Creating a pitch deck
- Marketing and advertising
- Transporting products
- Inventory management
- Legal considerations
Consider Your Finances
In 2023, federal cannabis banking reform may be a possibility, but marijuana businesses shouldn’t bet on it. Since cannabis is a federally illegal substance, banks tend to shy away from financing cannabis businesses for fear of criminal prosecution by the federal government.
Since most banks do not work with cannabis companies, marijuana entrepreneurs must find creative ways of finding funding for their cannabis company.
Cannabis businesses must get funding from outside investors, venture capitalists, private equity firms, and alternative financing institutions. Learn more about financing your cannabis business in our blog post.
Develop a Marijuana Business Plan
If you want to start a cannabis business, you need a solid marijuana business plan to guide your operations and scale your business.
A business plan clearly outlines your business type (cultivation, testing, extraction, processing, retail, distribution, ancillary), which will affect your target market and operational practices.
Business plans can be used internally to guide the staff and owners or be used as a resource for potential investors.
A marijuana business plan should include market analysis, marketing and sales plan, research and development, facility operating plan, finances, and more to cover the planned growth of your marijuana business.
Invest in Marketing and Advertising
Cannabis advertising laws are notoriously strict to reduce exposure to young people. We recommend researching your state and local advertising regulations for cannabis before launching a cannabis marketing strategy.
You must also stay up-to-date with the latest advertising laws to ensure your packaging and advertising are state-compliant.
When advertising on social media, you will have to follow each platform's policy on cannabis or illegal substances. If not, a post or an entire account can be suspended for violating terms of service, resulting in losing your followers and business profile.
Learn More on How to Start a Cannabis Business Today!
Starting a cannabis business in 2023 is possible. Whether you want to start a medical marijuana or recreational cannabis business, CTU’s comprehensive cannabis industry training can help. Find out more about obtaining the proper licenses in your state to build your marijuana company.