How to Start a Marijuana Business
It was not long ago that possessing marijuana was a crime. Now as time has passed some states have legalized marijuana and marijuana dispensaries. Marijuana legalization has created a need for marijuana dispensaries. Before you start a marijuana business you need to know the in and outs of the industry.
Understanding Various Regulations
First, you must remember that different states have different rules. Under the federal government, marijuana is illegal to grow, possess and sell. Currently, it is legal for persons over the age of 21 to smoke marijuana, without a letter from their physician, in nine states. On the other hand, medical marijuana is legal in 29 different states. Since legalization has occurred, sales of marijuana increased to $2.7 billion. Because of this, the market is open to entrepreneurs.
Basic Categories Of Marijuana
Cultivation of marijuana encompasses the growth of the plant. This requires horticultural knowledge as well as a very large initial investment. There are many regulations regarding the cultivation of marijuana. It is suggested that first-time growers stick to the use of potting soil. With the pots, there will be a need for grow lights as well as a few fluorescent lights. This works best inside a closet or when the area being used is small. As growth happens, switching to a larger space will be necessary.
Marijuana, though often enjoyed rolled up and smoked, can be consumed in alternative forms. One option involves products that have been infused with marijuana. Those who are medical patients usually prefer infused marijuana products such as edibles and teas. Edibles require knowledge of marijuana and cooking to be successful.
Finally, there are marijuana dispensaries. This is where you can find pre-made edibles varying from brownies to lollipops. Those who have been approved to use marijuana by their doctor can go to a dispensary to purchase their goods. Despite all of this, dispensaries are difficult to start up.
Factoring In The Necessities
To build a business, you must have startup money. There are state regulations that incur costs. Most importantly you must think hard and long about the costs related to maintaining this visit. Like any business, you will need rent, so you can purchase a place to sell your marijuana. In conjunction with rent are utilities, which will be needed to open a marijuana business. You also must decide exactly how you will afford any supplies or special equipment you may need. If you plan to have employees working at your marijuana business, then you will have extra work to do before opening.
Once you have reviewed all the previous steps, you can move forward. To start a marijuana business, you must consider your residency. To open your business, you must be a state resident. As if that is not difficult enough, Colorado requires you be a resident for at least two years before you can begin creating your business. Additionally, if you have ever been convicted of a crime that was violent or related to drugs then you are barred indefinitely from receiving a license to start your marijuana business.
When you apply for your application you must decide what you want to name your business. Additionally, you must decide if it will be a sole proprietorship, limited liability company, or general partnership. Another key factor in starting your marijuana business is familiarizing yourself with state laws. Since some marijuana is for medical and some is for recreational, there are different rules and regulations that you must follow. To start a successful marijuana business, you must be aware of all the laws.
Steps To Be Licensed
Once you have completed all the above tasks, it is required that you register with the secretary of state. If you are a sole proprietorship or general partnership, then this does not apply to you. The fee for registering to start your marijuana business could be as high as $150. Before your license to operate can go through, you must prove that your local government has given you permission. This means you must find a way to meet with the city officials and get written authorization. If located in California, you will need to get a seller's permit. This can be obtained from the California Department of Tax and Fee Administration.
Next, you will need to obtain a state license so you can begin your marijuana business. The process is simple. All that is required is that you visit the Department of Consumer Affair's Bureau of Cannabis Control online. By visiting this website, you will receive a license for your marijuana business. Once registered you must decide if you will have employees. Your employees will be required to apply for a federal Employer Identification Number and contribute payroll taxes. This is the way the government keeps up with you and your earnings.
Following receipt of the Employer Identification Number, one must consider the taxes involved. While it is great to be licensed to start your marijuana business, you must remember that everything is taxed. As a business, you will be required to pay income tax, federal tax, property tax, and payroll taxes. Now that you have your license and employees ready for work, you must be sure to keep up with the registration of your marijuana business.
In the beginning, you will have to file Statements of Information within 90 days. After this initial registration, you will have to update your registration every two years to keep your marijuana business open. Finally, if you decide that you want to have a trademark, logo, or slogan, it will be required that you register them with the state. If you do not register with the state, then another business could come along and take what you created.
The last step to opening your marijuana business revolves around you working with other businesses. You must know where you are going to get your products from and how much you will sell them for. Manufacturers and wholesalers are great to develop business with.
Overall, starting a marijuana business requires many steps to be successful. You must know all the risk factors involved and costs that may affect your profit. If you follow all the steps, then starting your marijuana business will come very easily.