Starting a cannabis business from the ground up is no easy task, but do you really need millions of dollars to get started? The answer to this question may be more complicated than you expected. When most aspiring cannabis entrepreneurs picture themselves succeeding in the industry, the vision is often very similar. Typically, they picture themselves standing in front of a thriving cannabis field, admiring their harvest, and counting their money as buyers line up to make a purchase. The reality of the modern cannabis industry is that there are a variety of different business models, many of which may be more profitable and require fewer startup costs than growing cannabis. From cultivation to manufacturing, retail, distribution and even testing labs, there are endless opportunities to be had, if you have the right knowledge.
Having spoken with aspiring cannabis entrepreneurs from across the country and having helped hundreds of businesses get off the ground, our team at BeGreenLegal has developed a roadmap to success. This roadmap can help minimize the amount of time and money wasted by aspiring cannabis entrepreneurs during startup. Throughout the years we have met countless business owners who have jumped headfirst into the industry, spending money on needless legal documents, business plans, and lawyer fees. Some people have even purchased land intending to cultivate cannabis, only to learn the land is located outside of green-zoned areas. Spending half of your budget prior to obtaining all relevant information regarding permit requirements and necessary licenses in your area is a sure-fire way to set your business up for failure. At BeGreenLegal, we help you get set up for success by avoiding costly mistakes.
Just like any business, there is a lot of competition when it comes to the production, distribution and sale of cannabis in the United States. Without a go-to-market strategy, milestones, a budget, goals and an idea of how your business is going to be profitable, your new dispensary, delivery service, or grow-op could be in a lot of trouble. You could find yourself quickly out of funding, in legal trouble or back at the beginning having spent the entire allotted budget.
At BeGreenLegal, our process always starts with understanding the resources and available budget of the client we are speaking to.
First, establish your investment budget. Consider your savings, assets upon which to secure a loan, and personal loans or investments from friends, family and other people in your network. You may qualify for local or regional specialty loans and grants, so be sure to look into what loans may be available to you in all cities and counties in the region that you’re considering for your cannabis business.
Next, determine whether you have any advantageous resources at your disposal. For example, if you or a family member already owns property that has been green-zoned there may be a worthwhile opportunity that you have completely overlooked. While you might not be able to cultivate marijuana, maybe a property in your portfolio is in a prime manufacturing location. Or, after some focused networking, you may discover that you have a core group of people ready to build a distribution business with you. The world of cannabis business opportunities is greater than just growing and running dispensaries.
Thirdly, another option when you have a limited budget is to build up your cannabis business knowledge. Proving that you’re a highly-informed, business-savvy owner can be attractive to outside sources of funding such as venture capital firms and private lenders. Whether you’re considering cultivation, distribution, manufacturing or retail sales, get yourself educated on all facets of your area of interest. And, having a solid business plan, operations and procedures manuals, marketing plan, staffing and compliance plans, etc. will show potential investors that you can be seriously considered. Instead of ending up as an aspiring entrepreneur who can’t buy their way into the industry, you’ll have the opportunity to become a knowledgeable asset to an established team.
Fourth, starting a cannabis business with limited funding can also be part of your strategy if you want to achieve certain milestones before seeking investors. They will be more interested in your project if you have obtained one or more approvals for your cannabis license, such as a conditional use permit, or you may want to obtain the license in areas where buildout can be implemented later.
Finally, take your time, and don’t go-it alone. Too often we see people who rushed into a potential opportunity, losing a sizable chunk of their funding in their haste. Just like a cannabis plant, good businesses don’t pop up overnight. They need nurturing and development, hard work and tending. Speak with BeGreenLegal, a trusted advisor to many cannabis entrepreneurs. We will help you maximize your time, money and investments.
With more lucrative, nationwide opportunities in the cannabis industry than ever before, the green rush to licensing, vertical integration, and innovation has officially begun. While some mega-corporations are buying their way in and attempting to dominate the market, it’s still possible for a team with a strong work ethic to carve out a niche for themselves. In this article, we addressed how to start a cannabis business on a budget, but there are two key features you’ll have to bring to ensure success in the industry: work ethic and hustle.
We can’t teach you how to tap into your drive and commitment for success–that’s going to come from you. However, here at BeGreenLegal we can help you avoid misdirections, advise you as to the most effective business methods for running your business, and save you time and money. Give us a call today and we’ll get you started on the path to becoming a profitable, cannabis business owner.