As more and more states continue with rampant efforts to legalize cannabis, the industry is set for a bright future. There are tons of new businesses and start-ups opening to attract and jump on the growth bandwagon.
29 states of the American Union have already legalized cannabis and marijuana. With the industry crossing the $20 billion mark in 2021, experts and analysts are now pointing to this as the next big thing. Given all the hoopla around marijuana, businesses are looking to enter this field and earn some sizable profits.
However, with increasing growth comes the problem of overexposure and competition. Given the grey nature of the industry, navigating through legal loopholes is also a challenge. Lastly, the lack of formal banking options also makes the industry dependent on cash.
In this article, we are going to explore how someone can run a profitable cannabis business by following five legal steps. If you are someone that is looking to start a business in the industry, please read the article till the end.
List of 5 Steps to help you run a Profitable Cannabis Business
Step 1- Identify the Exact Niche or Segment you want to get into
Many young businesses often get confused when it comes to understanding and aligning with the exact segments. Even within the cannabis business, there are numerous variations- marijuana dispensaries, become a marijuana farmer, or get into the logistics side of it. Every segment is set for growth, but you cannot do everything at one go. Identify where you want to be and then plan accordingly. You need to stay committed to your decision for at least 3 years.
Step 2- Partner with an Excellent Payment Processing Company
One of the major challenges that plague cannabis businesses is the lack of great payment processors. If you are looking for the best cannabis payment processing, you need to check out brands like Paybotic. The more financial offerings and services you are able to give to your customers, the higher will be the revenues and sales of your business. you will also be able to enjoy lower fees and expect greater transparency in financial dealings.
Step 3- Hire a Legal Counsel to help represent your Cannabis Business
A cannabis business needs to hire legal aid as soon as possible. This is because several loopholes in the law need to be navigated. For example, while states have legalized marijuana, the federal government has not. This means that there is still a lot of confusion regarding the legal status. This can get your business in trouble in areas that collide with federal rulings and stipulations. Hiring legal counsel can help you in more ways than you can imagine.
Step 4- Get all the Licenses and Permits to help your Cannabis Business
We have already mentioned how cannabis businesses are always under pressure because of legal troubles and discords. Given the volatile nature of the industry, cannabis businesses need to ensure that they always have all the licenses, permits, and paperwork in order. This extends to filing proper taxes and complying with all the state rules and regulations. This is also one area where both your payment processing company, as well as your lawyer, will be able to help.
Step 5- Build your Business and engage in Marketing Channels
Once you have all the legal and financial issues taken care of, you need to build your business plan and model. This means setting up the right marketing channels with an increased focus on digital platforms. If you are successful in the initial first few months, you can also look to increase finding and seek investments from venture firms. This is one area that almost all major cannabis start-ups in the industry are looking for- raising funds as soon as possible.
The Bottom Line
Given the high level of competition in the industry, becoming profitable is not as easy as you might think. There is still a lot of stigmas that are associated with the industry. While positive steps have been made in the right direction, there is still a long way to go. If you have any other questions on setting up your cannabis business, let us know in the comments section below.