During this era, where in some states it is legal to sell cannabis, how do you just go about legally selling it? A cannabis business is not just like any other concern. This one has so many laws and regulations around it. The plus side is that this industry does not look like it’s going anywhere anytime soon, so if you are financially able and ready to take this responsibility on, we will give you some rules to make this process smoother. This is First in obtaining a business loan.
Before starting your business, you should know exactly every document required to run it, for example licenses, registrations, contracts, etc. But your number one priority is going to make sure that you know the laws regarding the solicitation of cannabis. If you are caught without the correct documents needed, you can get shut down or even worse incarcerated.
So let’s find out the three licenses you need for full cannabis retail.
- Bureau of cannabis control: this is who will issue a commercial licensing to you so that you may open a cannabis retail store or legally sell cannabis.
- California Department of Food and Agriculture CalCannabis cultivation licensing: they are responsible for the licensing of cultivators for adult cannabis use.
- California Department of public heath’s manufactured cannabis safety branch: this branch will supply the licensing for cannabis infused edibles as well as licenses for the manufacturing companies that produce these edibles.
How much capital do you need?
Although a very lucrative business if ran correctly, The start up costs can be pretty costly. We are going to explore just some of the costs that you should be prepared for.
You might be shocked to learn that the starting cost for a storefront cannabis shop usually starts right around $150,000 and can go all the way up to 2 million. So, why on earth is it so expensive and how are so many people able to start one? A breakdown below of the costs needed are just a rough estimate. You should consult with a business attorney to make sure you are paying what you should.
- Licensing and applications. After you have created a strong business plan the next thing you should do is apply for all the licensing and applications. But be ready to spend a nice amount of money. You are going to be spending anywhere from $1,000 to $10,000
- Capital- You’re going to need capital and a nice amount of it. At least $150,000 of it is best to find a business loan or look for investors that are willing to partner with you. Looking up cannabis business loans in california would be a great start to finding a lender.
- Marketing- A major part in planning the success of your company is having a good marketing team and plan. Especially with the market being so saturated with cannabis businesses, it’s key that you set yourself apart from the other stores. If you want an aggressive marketing team you’re looking for $50,000 annually. Definitely worth it if you’re looking to be successful.
- Product- Product is obviously necessary if you don’t have it, you have nothing to sell. So with your product you’re looking at around $1,500 per pound. You might want to also pay a little bit more for a higher level product.
- Staffing- As we know a business needs staff as well as management and security. This will also help alleviate stress on you by having trusted people run your business. So paying everyone’s salary annually your looking at around $150,000
So now what?
Now that you have gotten your licensing, applications, capital, and all the other requirements, you are ready to start your own cannabis company. Remember that this industry is very hot right now, i.e., you can make a healthy amount of profit. However, you must make sure that you comply with all the rules and regulations, which are often updated. It would be a pity to have to shut down because for legal reasons.
We hope you now have a better idea of what is required to set up your own cannabis business. Good luck!
Interesting related article: “What does CBD mean?“