5 Things you should know and be ready for before you deliver your first order…
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The marijuana industry continues to flourish: recreational and medical marijuana sales in states where weed is legal are increasing by the day as reported in the Marijuana Business Factbook. If research would cover auxiliary companies manufacturing the machinery needed for harvesting, legal services representing weed growers, accountants and advertising agents, it would triple what has been recorded on cultivation and direct sales. Therefore, it is indeed a huge business. Are you fascinated by this lucrative business and want to make a living out of it? Well, only the knowledgeable make it big. Here are 5 important things you will need to know prior to making your first delivery:
- Tax requirements and the obstacles to overcome
The issue of taxes on marijuana dispensaries is considerably high. Therefore, you need to work a way in which you will balance this out. There are high overheads and dwindling wholesale prices that trigger a lot of competition for price. Consequently there will be a lot of pressure on profit margins. This is a tricky scenario since retailing is never the greatest business speaking on general terms. There is a lot of money in cultivation than there is at the retailing stage. If you really want good opportunities, include the auxiliary services and products as well. There are also opportunities in product testing and market research. You will also find avenues in sales data collection useful in guiding the entire weed industry. Others include software platforms and applications that have proved to be very useful in running marijuana businesses in a more effective way. All these are measures that can help you beat the tax hurdle. Then there are cannabis edibles that can count a lot in kick-starting your business. Definitely, there are market leaders but you must bear in mind that these are just players. No one has an already established brand that is dominant. This is basically due to the commerce restrictions between states.
2. Laws that govern the weed industry
Starting your marijuana business without the faintest idea of how the industry is regulated is the biggest mistake you can ever make. Therefore, it is important to know the state laws and regulations concerning the use and sale of marijuana. The current trend in marijuana reforms involves the decriminalization of cannabis growing, production and distribution based on strict regulations defined by the Department of Justice. Additionally, you need to seek compliance with state statutes and rules to get started. It is important to constantly adhere to this otherwise huge fines imposed due to non-compliance will eat into the fabric that holds your business together. It doesn’t end at the state level, county and city laws also apply. There is a huge conflict between the federal and state governments concerning marijuana and therefore, you must be aware of them and how to deal with them.
3. Your business location
Many cannabis businesses make the mistake of thinking that they will be in a position to get a location to conduct their operations with ease. However, that usually is not the case. Due to the federal asset forfeiture regulations, landlords can lose their properties should they rent their land for use by marijuana businesses if found contravening the law. Some banks are always prepared to foreclose on these properties if a cannabis business violates the mortgage. However, they are usually hesitant to lease to weed businesses. Again, you will be required to comply with the stringent square footage requirements. Most of these requirements are based on federal laws that tack additional prison time onto sentences given for drug trafficking should the defendant be caught manufacturing, distributing or growing a controlled substance like weed within 1000 feet of a park or a school for instance.
4. Banking Restrictions on Marijuana Businesses
Even before you start selling out your weed products, establish where you will stash the cash. Marijuana businesses are not allowed to participate in America’s financial system. Therefore, all your monies will be handled on cash terms. It is a lot of money and therefore, you need to establish a safe way of keeping it. Many have hired armed guards and still are haunted by the fear of getting raided. Until the cannabis is accepted to the national financial system, you will have to look into this matter cautiously.
5. Start-up Capital
After putting into consideration all the other 4 factors, you can now proceed on to look for start-up capital. There are some entrepreneurs willing to create partnership in the marijuana industry and you obviously wouldn’t mind to get one or two. To thrive in this industry, you need to be at par with what is currently happening in terms of pulling resources together. To cater for your basic assets and accommodate the skillset you need to succeed, you should be able to get enough capital. Think about what skillset you need including IT, construction, HR and public relations among others. This is what other marijuana businesses are doing currently.
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