10 Best Practices for Opening Your Own Cannabis Business

Infuzes Team Posted 5 years ago

What was taboo years back has now turned into a promising field for business development. The cannabis industry expands rapidly and thus attracts enthusiastic entrepreneurs. Over half of the United States has legalized cannabis in some form – that’s 33 states, plus the District of Columbia. Many states have only legalized cannabis for medical use, but that’s gradually changing as well. Marijuana sales in North America are projected to reach $20.2 billion by 2021. These figures are impressive, especially in light of the fact that the industry is still in its development stage.

Starting a business, every entrepreneur faces certain obstacles. It's more difficult to deal with cannabis than having a fashion boutique or managing a coffee shop, for example. But numerous profitable cultivators, dispensaries, and distributors prove that it is possible. With its age and legal requirements, the cannabis industry is unlike any other. Here we have collected 10 tips and recommendations that every beginner should keep in mind to thrive in the cannabis business community.

How to start cannabis business

Business Type

Marijuana licenses to grow, sell or create marijuana-infused products have become the most coveted vertical in the industry. Types of licenses vary from state to state and depend on specific circumstances. To help you make a choice, we have selected a number of the most popular licensed activities:

Cultivation/Growing. Cultivates, dry, trim, or cure and package marijuana for sale to a processing or dispensary/retail facility.

Processing/Manufacturing. Obtains marijuana from authorized licensed facilities and extract resin from the marihuana or creates marijuana-infused product for sale and transfer in packaged form to a dispensary/retail facility.

Dispensary/Retail Facility. Purchases marijuana from a cultivator or processor and sells, supplies, or provides marijuana to customers.

Distribution/Delivery. Transports marijuana between licensed marijuana facilities or from a licensed dispensary/retail facility to patients/caregivers/customers within the operating state.


Staying compliant with state and local laws is one of the most important focuses when starting a cannabis business. Familiarize yourself with the law requirements and learn how it will affect your business. Consult an attorney, preferably one that specializes in cannabis legislation, do your due diligence to figure out if it is possible to get a license. You will probably need the help of an accountant to ensure you are correctly handling your state and federal tax responsibilities. In general, you must be a resident of the state or province to which you are applying for a license and have a clean criminal record. However, these requirements can vary from place to place. So before giving a pretty penny to cover non-refundable licensing fees, verify that you meet the qualifications in your target area.

Business Model

Create a unique idea that will satisfy the unmet needs of consumers and distinguish you from other similar businesses at the same time. This is a good opportunity to show your own creativity, but to achieve a win-win effect don't neglect the help of professionals. Design a workable business plan that covers all the important aspects of running the business, including marketing, sales, competition, team, and safety. An important part of your plan is budgeting. You should understand that a young enterprise will not make a profit from its beginning days, which is normal. Make sure you have enough money to cover business expenses for the first few months. Think of a Plan B in case of unforeseen circumstances. The submission of a business plan may be required by authorities for granting a license. In any case, you should have a clear idea of how you will run your business.


Starting your own business is always not easy and costly. In the cannabis community, novices should know how to manage their money to stay afloat. Do not expect big profits from the very beginning, and be ready to wait a few months before earning. You will need to consider application fees, the state required proof of funds, professional services (realtor, lawyer, accountant, consultant etc.), and other expenses. Talking about the license, marijuana businesses typically need to pay around a $5,000 non-refundable application fee for starting the business. (In Louisiana, it’s only $150 to apply, but in New Jersey, it’s $20,000!) Another obstacle is that no bank will give you a loan for a marijuana business. The solution is to entice private investors. Also, all businesses that directly deal with cannabis are forced to keep their capital in cold hard cash though some have been getting around this issue using cryptocurrencies to keep their funds more secure.


A professional advertising campaign will benefit any young business. This will help attract potential customers and create a positive reputation. Considering marijuana-related business one should keep in mind local restrictions on advertising. Some states that allow the operation of dispensaries don’t permit the advertising of the business or its products. States like Alaska even limit how many signs you can display to the public. Work on promoting your business, but in full compliance with the law.

Real Estate

Finding a suitable place for a marijuana-related business might be harder than you imagine. When looking for a viable location for your facility, you must consider state and city zoning laws for your type of business. Most zoning laws require you to be at least 300m from a school, church or daycare center. In this case, a realtor may come to your aid.


You and your employees should be completely aware of what is your business about. Depending on the type of enterprise, it may be cultivation technology, packaging features, customer consultation, and so on, there will be a need to educate your staff. Whether or not local law requires training, make sure you staff your business with employees who are proactive and well educated on the product. In addition to basic cannabis knowledge, it’s always a good plan to have in your team personable and friendly people. The marijuana industry is quite young and is constantly evolving, so it is necessary to keep abreast of any changes in your field.


Even the most talented entrepreneur needs a team that he can count on. You cannot do everything by yourself. Therefore, it is in your interests to hire a professional staff or people who are ready to master a new profession. But remember that in the second situation you will be their boss and teacher at the same time. Look for entrepreneurial-types, medical professionals, specialists in public relations and legislation, people with marijuana industry experience. Consider hiring veterans, women, minority representatives as states have been implementing diversity bonus points in their programs.


Know your plants. Know your growers or be good at growing. Know what good product looks like. Interaction between all the components of your cannabis business is very important, from cultivation to the sale of the finished product. Maintaining a steady supply of high-quality cannabis is the lifeline for your business, especially in the first few months. Be sure your suppliers are professional workers and decent people. Make sure you and your growers are aware of compliance with pesticide laws. In short, become a product expert!


When you already have a business idea, find out who your target audience is. In other words, who is going to be interested in your products or services and what particular wants and needs do they have. You can conduct research on how you can ensure your future customers are happy and satisfied with what you offer them. Understanding your consumer base is an integral part of a successful business.

From the foregoing one can conclude, that it is possible to open and run your cannabis business if you play fair and square. The biggest obstacle for entrepreneurs is legislation and other related challenges. However, the cannabis industry is booming and brave souls who venture to open their own business will be rewarded with high profits. Starting your own business is difficult, so do not neglect the help of cannabis professionals and experts. If you still doubt whether the marijuana industry is for you, then visit some conferences and events dedicated to this topic.