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The news is all over the marijuana business, with headlines such as “Big Money Bets Weed Will Bring in the Green”. More people than ever are getting high and paying large amounts to do so – $29.7 million to be exact. With a loyal following of customers in states legally allowing the sale of retail marijuana as well as medical, jumping in to this rapidly expanding market is almost as easy as taking a hit.
However, as a prospective business, you should focus on four main questions about how you can start your company and weed out the competition.
- Will you be a licensed grower or a retail store selling marijuana products?
As a grower, you will need high quality supplies such as grow lights and proper soil regulating instruments. This can get quite expensive for larger operations; however, you are also the first in line of marijuana sales. The hundreds of retail dispensaries have a growing demand for high quality weed, making cultivation of marijuana very profitable.
Retail stores are more publicly oriented and must be friendly and conveniently operated to draw in customers. Stores can sell both medical and retail products, but must have licenses for both. If you are looking for a way to help patients and provide a safe, regulated recreational substance to consumers, dispensaries are the way to go. Retail stores also require fewer personnel and have a more straightforward operation.
If neither of these options sound appealing, you can always create marijuana-related apps. There are hundreds of successful apps that rate strains, provide dispensary reviews, and tell you where the best prices for weed can be found.
- Will you be able to meet the tax and facility expenses?
For both growing and store operations, taxes can take a large chunk out of your time. Excise and sales taxes must be filed, as well as property and license fees to legally sell marijuana. These expenses can become very burdensome for new businesses, although the payoff is usually great. Check the state marijuana website for more information on specific taxes.
- How will you market your products?
Due to the novelty of the marijuana business, marketing is key to bringing in customers. How will you set yourself apart from other dispensaries or growers? Developing a name brand and signature style could draw in more people, allowing you to sell more of your product.
Make sure you have a viable marketing plan to present when starting your business, as well as a target customer base for your advertising.
- As a retail producer, are you willing to move to Washington or Colorado to start your business?
Currently, the only states that offer retail marijuana are Washington and Colorado. If you already live in one of these states, congratulations! If not, you should consider the medical marijuana industry, which has a wider range of states that have legalized medical use.
These two states also have fairly strict laws to regulate the sale of marijuana, so be sure to prepare your business for these rules.
The future of the marijuana business is uncertain, but it’s almost guaranteed to continue to grow.