If you’re looking to jump into the cannabis business, you’re in good company. California alone is forecasted to generate between $6 billion and $7 billion annually as the industry continues to grow. Making money in the marijuana sector requires business acumen, market research, and a strong understanding of local, city, state, and federal laws. We don’t recommend dumpster diving or blindly investing in cannabis stocks to get cash quick — instead, it’s important to take a more measured approach.
Keep reading to learn about the top three ways you can make the most out of the exploding marijuana business scene by starting your own dispensary, opening a bud and breakfast, or investing in specific cannabis stocks.
Starting Your Own Dispensary
Are you ready to open your own business? Before signing the dotted line for a lease, consider the steps below to see if you’re actually ready to commit.
- Research: Make sure you know the exact laws surrounding cannabis and licensing requirements in your particular states. Remember, under federal law, marijuana is still a Schedule 1 narcotic – which means although you may be fine operating in your state, but there’s a gray area when it comes to federal legality. There are also certain cities and counties where no laws have been passed regarding marijuana dispensaries. It’s in your best interest to immediately hire both a tax professional and a lawyer who is familiar with marijuana laws and regulations in your immediate area. It will reduce the risk of you having legal troubles later.
- Rental property: In most areas, you’ll have to find a space for your dispensary that counts as a compliant property. For example, a San Diego weed dispensary must be 1000 feet from a school, 1000 feet from a church, 1000 feet from a residential neighborhood, and 1000 feet from another compliant property. When searching for the right location for your cannabis venture, make sure to brush up on local property requirements.
- Write a business plan: Like any new company, you’ll need to create a business plan. This will be the blueprint for how your business operates and guide you as you grow.
- Budget: You’ll need to build a budget that includes expenses like licensing, renting the shop space, license application fees, labor costs, and security – just to name some of the considerations you’ll want to keep in mind.
- Raise the funds: Ideally, you’ll have savings to tap into but if you’re starting a grassroots campaign to open a dispensary, you can also turn to crowdfunding sites. The interest in investing in cannabis has skyrocketed now that it is FDA approved. Kickstarter or GoFundMe might be options you want to check out.
- Get your license: You’ll need to apply for a license initially and then also make sure you stay compliant if any regulations change while you’re in operation. Staying compliant with marijuana laws will likely be a full-time job, so it’s a good idea to have a lawyer on your payroll who you consult to make sure everything is operationally sound.
- Get your products, legally: Whatever you decide to sell – dabs, oils, concentrates, pre-rolls, etc. – you’ll need to make sure you buy from legal companies that sell wholesale products.
- Market your new shop: Social media, conventions, and fairs are all good ways to get the word out about your dispensary.
Rent Out Your Home
You’re probably already familiar with Airbnbs but there’s an open market for a niche within the world of cozy, homey spaces to stay for visitors. If you live in a weed-legal state, you might want to consider starting you’re very own bud and breakfast spot in Juneau or Boulder. Offer guests a waffle and weed breakfast, tours of local dispensaries, or plan activities for your guests around cannabis.
Investing in the Cannabis Stock Market
Anybody who produces or sells marijuana is operating illegally under federal law, this means that marijuana companies can’t list on Nasdaq or the New York Stock Exchange. Instead, American marijuana companies are turning to the Canadian Stock Exchange in Toronto and the OTC Markets Group.
Tips for investing:
- Invest in cannabis companies who regularly post updates and news. These companies are the ones that are generally doing well and keeping their name relevant in the industry.
- Look for older companies. Sure, there are plenty of new, up-and-coming cannabis companies that show promise but for more reliable returns, you’re going to want to focus on businesses that have been around for a while.
- Biotech companies are looking into cannabis-based medical treatments to treat a variety of illnesses and conditions – it’s an area of the medical industry that’s exploding. Keep this in mind as you’re evaluating stocks to put your savings toward.
- If a company has incredible branding, that’s a good sign they’re going to become a leader in the industry. As brands and the cannabis industry matures, consumers will likely stay loyal to their preferential brands.
You can’t just expect to make easy money off cannabis – it’s not as simple as opening a dispensary or picking a random stock to invest in. You’ll have to do some serious research and consider all of the legal implications of the strategy you choose. The cannabis industry is rich with profit opportunities and with the right knowledge, you can create your own success.