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Start a Cannabis Business: Advice for the Absolute Beginner

Whether you’re an entrepreneur looking for a lucrative opportunity or just someone who’s passionate about cannabis, you might want to start a cannabis business. Just like starting any other business, you’ll have to go through some extensive planning and preparation before you even start. What’s more, starting a cannabis business comes with many unique challenges. […]

Start a Cannabis Business Advice for the Absolute Beginner

Whether you’re an entrepreneur looking for a lucrative opportunity or just someone who’s passionate about cannabis, you might want to start a cannabis business. Just like starting any other business, you’ll have to go through some extensive planning and preparation before you even start. What’s more, starting a cannabis business comes with many unique challenges. However, even if you’re an absolute beginner, we have some advice to help.

Starting a cannabis business successfully will take various steps. On top of legally registering your business, writing a business plan, and getting the staff and resources you need, you’ll also need to obtain a marijuana business license in many cases. What’s more, things like getting funding and finding a suitable location can be particularly tricky for cannabis companies. But don’t be put off- there are ways to overcome these hurdles and start a lucrative business.

There are many types of cannabis businesses you can start, so whether you’re interested in selling cannabis, growing cannabis, or even offering services such as accounting or legal advice for cannabis businesses, there are various acceptable routes into the industry. So what should you do if you want to start a cannabis business the right way? Here’s some advice for the absolute beginner.

What Type Of Cannabis Business Should You Start?

If you want to start a cannabis business, the first decision you should make is what type of cannabis business you want to start. When most people think of cannabis businesses, they probably think of selling marijuana via a medical marijuana dispensary or adult cannabis store. While dispensaries and stores are still in high demand, there are various other options to consider.

Marijuana growing is another lucrative business idea for those looking to get into the industry. While you’ll need a fair amount of funding to get the land and resources you need, you can supply various cannabis sellers and make a good amount of money while also enjoying the process of growing high-quality marijuana.

Transportation is another option. Whether you want to help cannabis cultivators and retailers with the transportation of stock or simply deliver products to customers, this can be a highly successful business idea. You’ll need to invest in suitable vehicles and do some research on marijuana transportation, but it can be well worth it.

You might also want to consider a marijuana production business if you’re interested in manufacturing products such as Cannabis Tinctures, Edibles, or Concentrates. You can even start a testing facility if you want to deal with the testing of products. These businesses are among the hardest to start as you’ll need a lot of technical equipment and knowledge.

Since all of these businesses involve handling marijuana or marijuana products directly, you’ll need to obtain licensing before you start. This can be costly and time-consuming. To make things easier, you might want to consider selling hemp-based CBD products instead or even starting an ancillary cannabis business.

Should You Start An Ancillary Cannabis Business

Should You Start An Ancillary Cannabis Business?

Many types of cannabis businesses naturally involve handling marijuana, whether you’re growing it, selling it, or transporting it. Starting one of these businesses will involve going through the tough and lengthy licensing process and, although it’s worth it in the end, you might want another option.

The good news is that you can start a lucrative cannabis business without needing a license whatsoever. Ancillary cannabis businesses are businesses that involve supporting the cannabis industry without having to handle the product itself. These are much easier to start and there’s a huge demand for ancillary services.

As such, you might want to start a business-to-business service in the cannabis industry. You could offer services such as Accounting, Legal Advice, Consulting, Marketing, or IT Support specifically tailored to the cannabis industry. Cannabis businesses often outsource these operations and, if you ensure that you and your staff have the specialist knowledge to help them, you could make significant profits.

You could even consider creating a website or app. There are now many successful apps and digital services for those in the cannabis industry, from apps that help businesses run more smoothly to apps that help consumers get information on products and even social media platforms for cannabis lovers. If you can come up with a unique and creative idea, this can make for a great cannabis business idea.

There are many benefits to starting an ancillary cannabis business. Not only will you avoid the licensing process, but they’re often a lot cheaper and easier to start as you won’t need as much funding for things like stock or growing equipment.

Licensing For Cannabis Businesses

If you’re starting a marijuana dispensary, cultivation business, manufacturing or testing facility, or any other business that involves handling marijuana, you’ll need a marijuana business license. Getting your marijuana business can take a fair amount of time and you’ll also need to pay application fees, but you’ll need it to operate legally.

Getting a marijuana business license usually involves applying online via your state government’s website. The process differs slightly in every state- some only give out limited licenses each year whereas others are open to every business. This is something worth considering before you choose where to open your business.

Some people aren’t eligible to open a marijuana business. You’ll need to pass a criminal background check and you might need experience in running a business depending on where you’re applying for your license. Check the rules of your state before you apply for your marijuana business license.

The application involves providing detailed information about your business, including information on your location, business structure, funding, and proof that you have the resources to successfully operate. You should also have a thorough business plan that you can provide before you apply.

Applying for a license will involve paying a hefty application fee, often up to $5,000 or more. On top of that, you’ll also need to pay an annual renewal fee. You might even want to pay a marijuana licensing advisory service to help you through the process and ensure that you get your application right the first time.

Other Legal Requirements For Cannabis Businesses

Other Legal Requirements For Cannabis Businesses

Any business that handles marijuana directly will need to go through the process of obtaining a marijuana business license. However, there are also certain legal requirements for starting a business in general. These are some of the legal requirements you’ll need to consider no matter what type of business you start.

Registering Your Business – Whether you’re handling marijuana directly or not, you’ll still need to legally register your business. The process of registering can differ depending on your business structure- you can incorporate your business or form an LLC to separate your business finances. This usually involves a simple registration process with your local government.

Tax Number – Every business must also register for a federal tax identification number or employer identification number (EIN). This is the number you’ll use to file your taxes so the IRS can identify you. Every type of business legally needs to pay taxes so make sure you don’t skip this step.

Business License – Depending on where you plan to operate, you might also need a general business license. Some states only require you to have a marijuana business license whereas others require you to have a general business license as well. The process for getting a general business license is quick and simple, so check the rules for your state and make sure you’re covered.

Sales Tax Permit – You’ll also need to apply for a Sales Tax Permit from your local government website. While this is obviously necessary for marijuana retailers and dispensaries, it also applies to any business selling products or services.

Other Necessities – There might also be other legal requirements depending on the type of business you’re running and where you’re operating. For instance, you might need permits for things such as signage, zoning, or handling food products such as edibles.

How To Get Funding For A Cannabis Business

One of the challenges of opening a cannabis business is getting funding. Most startups simply apply for a business loan from a bank, but since marijuana is still federally illegal in the United States, most banks refuse to offer loans to cannabis businesses. Luckily, you still have various other options for funding your cannabis startup.

Equity funding is a popular option for cannabis businesses. This involves offering shares in your business in exchange for the capital you need to get started. You can do this via a Venture Capital Firm targeted at cannabis businesses. You can even find Cannabis Business Incubators that will help you with the knowledge and resources you need for a successful start.

You can also seek out investors in other ways. There are now many people looking to invest in the lucrative cannabis industry and there are various ways to find them. You might want to look for investors via cannabis business Linkedin groups or cannabis business directories. You can even attend cannabis business events and talk to investors face-to-face. Make sure you have a plan and a pitch to present to them.

Crowdfunding is another option and you can even use crowdfunding platforms targeted at marijuana businesses such as Cannafundr. Crowdfunding involves pitching your business online to the world to attract funders. You’ll need to offer some kind of incentive and you’ll need to market your campaign. However, if done right, this is one of the best ways to fund a new business.

In some cases, you can simply use savings or even a Personal Loan. This is risky for larger businesses as you’ll be putting your money on the line. However, if you’re starting a business that doesn’t need much funding, such as a small-scale ancillary service, this can be an effective approach.

How To Get Funding For A Cannabis Business

Getting A Location For Your Cannabis Business

Finding a suitable location for your cannabis business can also be tough. There are various factors to consider here and there are legal restrictions on where you can operate a cannabis business.

Before anything else, it’s important to consider where you want to start a cannabis business. For instance, some states have easier licensing processes and some have less-restrictive laws on who can buy cannabis. Some are simply more lucrative and have a higher demand for cannabis businesses.

You might want to talk to a cannabis business real estate agent about getting a suitable commercial property. States often have restrictions on where you can operate a cannabis business. For instance, you’ll need to be a certain distance away from schools, churches, and residential areas.

As well as considering the legal restrictions, you’ll also want to find somewhere that’s good for business. For instance, recreational marijuana stores might have more success in college towns, tourist towns, or simply areas with high footfall. You’ll also need to find a building that can suit the needs of your business.

Marketing Your Cannabis Business

Handling the legal requirements of starting a cannabis business and getting the funding and resources you need is the tough part. However, the work doesn’t stop once your business starts operating. To ensure the success of your cannabis business, you’ll need to market it appropriately.

While cannabis businesses are restricted from some forms of advertising such as TV adverts, radio adverts, and even Google and Facebook ads, there are still many effective marketing methods. Make sure you have a professional website set up and work on SEO to attract interested customers or clients.

You can also harness the power of social media. Set up social channels for your cannabis business, take part in cannabis-related discussions using hashtags, and build your followers by posting interesting and engaging content as well as sales promotions and deals.

It also helps to offer custom branded cannabis products. No matter what kind of cannabis business you’re running, you can help get your brand name and logo out there by planting it on accessories such as lighters, grinders, and rolling papers. You can even give these out as promotional gifts at cannabis events and festivals.

Marketing Your Cannabis Business


Even if you’re an absolute beginner, you can start a cannabis business if you’re willing to take on the challenge. Although getting licensed, getting funding, and setting your business up can be tough, it’s a great time to get into the industry, especially as demand for cannabis grows. If you need help growing and promoting your brand, check out CannabisPromotions.