Despite the pandemic, the cannabis industry is one of the fastest-growing industries in the US and the world. As local, national, and international regulations begin to ease, the industry is expected to boom over the years. Because of this, businesses in and around the cannabis space are popping up across the United States.
According to Business Insider, the cannabis market has a projection of $100 billion by the end of the decade. On top of that, Americans have a growing acceptance and demand for it. Cannabis merchants must take advantage of the trend and broaden their reach across the country and the world.
With recreational marijuana currently legal in 18 states and medical marijuana legalized in 37 states, it is only a matter of time before cannabis is legalized across the country. However, while still in its formative years, the industry is very lucrative.
Here is some basic information to note while starting or growing your cannabis business.
Know the Current Regulations
While national regulations ease to permit more medical and recreational cannabis legalization, it is vital to know your state and local laws. You should review your state’s current laws on the matter to see if you are qualified. There may also be other helpful information to successfully run a cannabis business in your state of operation on the respective government’s websites.
It will be helpful to discuss it with an attorney well-versed in the cannabis industry or talk with a business consultant who knows the current legislation about marijuana in your state. You can register with an industry association such as the National Association of Cannabis Businesses (NACB).
Focus on a Niche
Another thing you need to do is focus on a niche and understand the regulations that govern them. The niches you can focus on include:
- Cultivating: During cultivation, you get to explore and experiment with different strains of cannabis and note how they smell, taste, and affect the users. This process is highly sensitive and regulated. To have a cannabis farm, you must prove that you possess the knowledge to get a license, which can be challenging to obtain.
- Cannabis-infused product manufacturing: Infusing cannabis into meals is becoming more commonplace. Edibles are products that may look like everyday snacks which you can consume virtually anywhere. You can take a market survey of the products that your target audience is looking for and make it available. However, you should ensure that the dosage of cannabis is appropriate for each edible.
- Retail: This is one of the most profitable niches in the cannabis industry. However, that does not mean you can sell cannabis to just anyone. According to various regulations, your customer must be above a certain age before you can sell to them.
Identify the Type of Cannabis Business
Another essential factor you need to consider is the type of cannabis business you plan on creating. Do you plan to make it a sole proprietorship, partnership, corporation, or LLC? You should consider your taxation, business capital, regulations, liabilities, etc.
Sole proprietorships and partnerships are pretty straightforward and cost-effective to operate. While you and your partner will receive the profits, you are also liable for the debts, liabilities, and other financial obligations.
However, in a corporation and LLC setup, every stakeholder, board of directors, and investor’s responsibility is to share in the profits and shoulder the liabilities and loss.
Whether you are kicking off a new cannabis business or planning to expand an existing business, you must build trust with your customers. Like in most business verticals, trust is a significant factor in the cannabis space that will help promote your business reach.
Customers need to see your business as a legit operation and not involved in any illegal activity. Thus, your customer care and support team must be prepared to answer any inquiries. You should be transparent in your operations to ensure stakeholders fully support every step you take as a business.
Tweak Your Marketing Strategies
Every industry is prone to changes in trends, and the cannabis space is not left out. As soon as you identify new trends, you should position your business with the right marketing strategy. You should also review each strategy to know whether it is effective and pull the plug on ineffective methods before you suffer a loss in funding.
Establish Your Digital Solution
Lastly, you should implement digital solutions for your business. As cashless payments continue to penetrate every sector, your business should process transactions with a credit card, debit card, gift card, ATM, online payments, and many other fast payment options.
Getting Your Business Approved
Our solution is an innovative company that provides alternative payment solutions for merchants in the cannabis industry. It is a bank-sponsored and regulatory-backed corporation that can process digital payments – online payments, ATMs, bank transfers, debit cards, credit cards, gift cards, and many more with innovative payment terminals.
You get the assurances of multiple bank sponsorships. Thus, your cannabis business can accept payments from any card and bank. Other benefits include WiFi options for in-store purchase, online reporting, statement retrievals, wireless terminals for deliveries, and faster approval and setup when you apply for the terminals.
To apply for the service to set up, install, and receive your terminals, you will need the following documents:
- Voided check
- Business license
- Drivers’ license
- Completed Application via DocuSign (or similar)
- Three months statements (in most cases).
Expense To Profit is committed to reducing your overhead costs while boosting your profits. We have, for several years, supported small and big businesses to hit their financial objectives with our customized strategies.
You can learn about our services and book a free consultation right here.
Published by Marc Freedman
Marc currently serves as our Chief Cost Evaluator, expertly advising our client management team on how to help you successfully achieve your business and financial growth goals. A respected mentor to all he consults with, he is an avid collaborator and contributor to the spend consultant community, guiding thought leaders to formulate, design, and install the best operational solutions available to their clients.