Embarking on a dream of starting a marijuana business is exciting. You’ve got some funding in place, you’ve identified potential locations, and you have a general idea of the type of cannabis business you’re going to launch. But starting a marijuana business in California–or any state where recreational and/or medicinal marijuana can be legally purchased, is more complicated than setting up a traditional business. And, the likelihood of failure is high if you aren’t very well prepared before you open on day one.
In this article, we provide a simplified seven-step approach that addresses how to start a marijuana business. As nationwide cannabis consultants, we know the intricacies involved in each step, so if you’re feeling overwhelmed, don’t worry–just give us a call. BeGreenLegal can help you ensure you’re on the right path to success.
How to Start a Marijuana Business in 7 Steps
It’s important to note that the steps outlined here are a general guide, and many states will require a process that’s ordered differently, includes additional steps, or not as many. When we meet with clients we provide specific strategies and a process that makes sense for the client’s location and specific needs.
STEP 1 – Develop a Strategy
The first step for anyone who wants to start a marijuana business is to identify what tasks will be needed for your specific license(s). You may already have some of these items in place, including a clear direction for your business, formed entity, available capital, acquired property, and existing operations. If you are at the beginning stages of starting a marijuana business, we suggest spending time defining your goals, developing a vision for how you will operate, and finding a property in a city or county that allows marijuana businesses to operate.
STEP 2 – Prepare Site and Facilities Plans
The second step for starting a marijuana business is to prepare schematic site and facilities plans, which illustrate how you intend to operate on your property. At BeGreenLegal, we usually start with a property survey and collect measurements and observations about any land use, environmental, and/or building constraints. Our marijuana consultants then develop conceptual plans coinciding with client discussion to make sure we describe their operations in detail. Once the concept is complete, we prepare graphics to include in application packages and business plans.
STEP 3 – Prepare Business and Operations Plans
Every marijuana business application needs a solid business and operations plan that describes how it will operate. As these will be reviewed by regulators, a marijuana business plan needs to be detailed, covering a variety of topics. A thoughtful, comprehensive business plan is not only a means to earning a cannabis business license, but also ensures you and your employees have a plan for success in place on day one. Some of the 16 areas our cannabis consultants include in plans for starting a marijuana business are:
- Company Overview
- Company Structure and Legal Ownership
- Regulatory Framework
- Operations Plan
- Standard Operating Procedures
- Inventory Control
- Insurance Needs
- Waste Management
- Records and Reporting
- Safety and Security
- Community Relations
- Employee Training Program
- Financial Plan
STEP 4 – Get Local Approval
Every marijuana business in California must first obtain approval to do so from the city or county in which the business is located before the state will issue a license. Of course, if you’re located outside of California, you’ll want to check with your city and/or state to determine what’s required at a local, regional and state level. Local cannabis approvals typically involve a land use permit and a business operations permit (also called a license).
Marijuana businesses are often more controversial than other business types and local governments usually require a conditional use permit involving a public hearing to allow residents the chance to voice their opinion about whether the business is a good fit for the community. Additionally, a conditional use permit includes an environmental assessment analyzing whether the marijuana business will significantly impact the environment in any way. Business owners must also disclose a background check, entity documentation, and financial information, before they can actually start a marijuana business in California, and most other states.
Don’t get overwhelmed! Our cannabis consultants assist our clients by preparing a comprehensive and organized application package that provides regulators all the information they need for their review.
STEP 5 – Obtain Supporting State Agency Approvals and State License
Depending on what type of license you pursue, local and state agencies issuing licenses for your marijuana business may require approvals from other agencies before an application will be considered complete. Check with your state licensing agency to determine which approvals your state requires, or, contact us. BeGreenLegal helps clients throughout the United States set up successful marijuana companies.We know how complicated it can be to start a marijuana business, and you don’t have to do it alone!
Once local approval is received, marijuana businesses are ready to apply for a state license. The state agencies issuing cannabis licenses require an extensive list of information about your business before approval. However, if the steps we described above are completed, most of this information will already be ready. Our cannabis consultants help clients ensure their applications are complete and organized to streamline review and obtain approvals faster.
STEP 6 – Launch and Learn (aka Execute Business Plan)
Of course, anyone who is starting a marijuana business will need to put a lot of thought into how they will execute their business plan. There will be many elements to address, such as:
- Physical building: will you need tenant improvements, remodeling to meet local code requirements, etc?
- Staff: Hiring, training, creation of employee handbooks, etc.
- Marketing: Branding, positioning, marketing and customer engagement all require time, effort and a plan of their own.
This, of course, is not a step that can be rushed. An executable business plan is vital to the success of your marijuana business. No longer can you launch one with the mindset of “If you build it, they will come,” as the competition in most locations will be strong, with new, competitor companies ready to take over your market share.
STEP 7 – Maintain Permits and Licenses
While obtaining a permit or license is an accomplishment, it’s not a final task. Local and state agencies include conditions and monitoring and reporting requirements a marijuana business must follow to keep the approval in good standing. BeGreenLegal’s experienced consultants help clients prepare through proper organization, planning, and implementation of a compliance program that is integrated into operations. Because there are literally hundreds of requirements for a state cannabis license, it is imperative to ensure that your marijuana business is ready for unannounced inspections, audits and license renewals.
Let Us Help You Build a Successful Marijuana Business
Starting a marijuana business isn’t a decision you should make overnight. Given the amount of planning, paperwork, consideration and funding required to start a marijuana business, the smart owner will have many actionable plans in place–training, inventory management, even emergency response plans. These action plans will help secure success for your marijuana business.
Some cannabis entrepreneurs will want to build companies that integrate many facets of the industry–from cultivation to branding to retail distribution. Of course, the difficulty in creating workable plans for complex marijuana business models is exponential; it doesn’t get twice as hard, but sometimes tens times more difficult! Don’t make your dream of starting a profitable marijuana company harder than it needs to be —call us today.
