So, you want to enter the highly competitive and regulated world of the cannabis industry. This can be a challenging industry to work in due to the many requirements on the federal, state, and local levels. However, that doesn’t mean you can’t start a prosperous cannabis business of your own!
Today, we’ll cover some tips to start your own cannabis business and succeed. From cannabis insurance to proper licensing to finding the right product, we’ll touch on a bit of everything.
Fully understand the legalities and stay within state regulations.
The first, most important part of starting a successful cannabis business is understanding its legalities and your state regulations. The federal regulations are standard, but your state-level regulations will vary from state to state. No matter what kind of cannabis-related business you plan on starting, from becoming a grower to opening a dispensary to becoming a cannabis distributor, it must fall under the law.
Aside from the basic business requirements, such as registering your business and applying for a tax ID number, you’ll need a license to sell cannabis. Next, you’ll need to check the regulations on your state level and local level. For example, several states have unique laws, and some cities require special permits to sell cannabis.
You’ll need funding to get your cannabis-related business off the ground.
Cannabis operations typically find it more difficult to find small-business loans compared to traditional businesses. It’s crucial to know this before getting started. The lack of funding available to companies that market cannabis products is due to cannabis still being illegal on the federal level. Most large-scale banks work on the federal scale, meaning they can’t fund a business that’s technically illegal. As a result, it’s next to impossible to secure start-up funds this way. However, some alternative lending options are starting to become available to marijuana businesses. Simply keep in mind that funding won’t be easy to come by in this industry.
Insure your cannabis-related business to protect yourself and your customers.
Even in the cannabis industry, insurance companies are there to protect your business. Cannabis insurance is available from a variety of providers with numerous insurance coverage options. Here’s a list of some coverage options you should consider including when you’re shopping around the insurance industry:
- Risk property coverage
- Stock and inventory coverage
- Workers’ compensation
- Product recall
- Product liability
- Property damage
- Operations liability
- Business interruption
- Crime insurance
- Cyber liability
- Directors and operators (D&O) insurance
- Errors and omissions employee practice compensation
- Equipment breakdown
- General liability and excess
- Inland marine coverage
- Professional liability
Get creative and set your cannabis operation apart.
Your company’s individuality can be the turning point for your success. The cannabis industry is highly competitive, and you’ll need to get creative to set your brand apart. You need to paint a picture of your company to bring potential buyers in and start building a loyal customer base. A crucial part of this is not to make any false or medical claims about your product. The FDA does not approve of medical claims about cannabis, and false claims can get into the kind of legal trouble that will shut your cannabis-related business down permanently. An excellent tip is to market your product in a way that would convince you to buy it!
Take advantage of influencer marketing.
Marketing your cannabis products won’t be as simple as setting up a Facebook ad. Social media platforms don’t typically allow paid promotions for cannabis products. So, your best bet to get your product out and on the internet is to use influencers. Popular social media influencers have a massive following, and collaborating with them can get your brand into the public eye. As a result, you get your advertising and stay within the acceptable standards of the social media platforms.
Take these tips and make the most of your cannabis business venture!
Now that you have some tips to get started, you can work on setting up your cannabis operation. Just remember to stay within the law, secure funding, insure your business, and get creative.