Now that California has passed Proposition 64, you will be able to receive a license to start your cannabis business in January 2018. However, receiving a license to start your marijuana enterprise is only the beginning. In order to effectively manage your new business, you will need to consider the following:
What Kind of Marijuana Business Should I Start?
Marijuana Dispensary or Collective
Most people looking to get into the marijuana industry are hoping to do so in a retail setting, running what is most commonly known as a dispensary or collective. These are stores that generate income by supplying legal consumers with cannabis-based goods and commodities. Generally speaking, dispensaries produce a greater profit than any other type of marijuana business, although they are the most risky and challenging to start from scratch. However, while dispensaries are perhaps the most well-known type of cannabis business, there are other avenues you can take when looking to turn a profit in the marijuana industry.
Marijuana Cultivation Business
You could also start a marijuana business that focuses on cultivation. In a cannabis cultivation business, you stock the shelves of dispensaries and other marijuana businesses. In order to effectively run a cultivation business, you would need to have significant agricultural, especially considering the hefty financial investment that a cultivation business requires on the front end.
Cannabis-Infused Product Business
Creating and selling cannabis-infused products could also generate significant revenue for business owners and investors. Many individuals and marijuana dispensaries purchase cannabis-infused products such as cannabis-infused beer, oils, baked goods, candy, and more.
Important Considerations for Marijuana Business Owners
Obtaining a Cannabis Business License in California
Short of a miracle, you will not receive your cannabis business license right away. In fact, you will likely have to wait several months to a year (possibly longer). If you have a criminal record of any sort, the licensing process could become much longer or you could be barred from receiving a license at all.
Costs, Investment, and Risk
Like many businesses, a cannabis business will likely require the business owner to seek outside funding from an investor or business partner with the necessary cash to get your new business venture started. Many investors are reticent about investing in the cannabis industry because it is still illegal according to federal law, despite being legal in certain states. In order to attract the kind of investments and financing you’ll need to get your business started, you will have to put together an impressive, detailed business plan that will instill confidence in you as a business owner and your vision for your business. This will require you to consider where your financing will come from as well as where the money you make will go, which should prompt you to develop a plan to cover your costs and turn a worthwhile profit. In a new, relatively unsteady industry, you will have to prove to investors that their involvement in your business will be worth the risk.
Experienced Cannabis Business Lawyers in California
Without seasoned cannabis business law attorneys in the mix, you could be up against tough odds in the marijuana industry. There are complicated regulations and rules that, if not closely adhered to, can sink your cannabis business as soon as it starts. Our cannabis business lawyers are working hard to keep up with California’s ever-developing marijuana laws and are ready to help you do what it takes to get started.
If you’re looking to start a cannabis business in San Diego, call Purdy & Bailey, A Law Firm at (858) 360-7080 or send us your information to receive a free evaluation today.