How To Start A Weed Business – Full Guide 2024

Before you begin a business, know the industry well. What can you earn? What risks are there? Who else is in your competition? These things will help you to make your decision right. The weed business is quite new, so it's not easy to predict how things will turn out.

One big thing to think about is how much people in your chosen location want it and how you can be different from others doing the same thing. Keep in mind, that you won't be the only one figuring out how to start a marijuana business.

More states saying it's okay means weed businesses can make more money. Colorado, where it's legal since 2014, has sold over $6 billion of regulated cannabis. People think sales could hit $50 billion by 2026, showing a good chance for a successful business.

Steps To Start A Weed Business

Decide the kind of weed business

Normally, to start a business, you'd need a business idea. But for a weed business, you've got that part down. What you need to figure out is which part of the marijuana business you want – a dispensary, growing, or delivering. Maybe you want to do it all. The steps for starting a weed business can't go ahead until you decide.

Other steps for starting a business are pretty basic, but remember, laws for weed businesses change a lot from state to state. So, be clear about them before doing anything. Spend time researching so you get the rules about where and how you can sell marijuana. Talking to people who've started their own cannabis businesses is a good start too.

A Business Plan

Starting a weed business requires a detailed plan. Follow all state laws. Ensure everything aligns with the law, from the business location to suppliers. Dr. Jared Helfant, president of Sparx Cannabis in California, the first state to legalize for both medical and recreational use, notes, "The surprising thing about a cannabis business is the amount of regulation and how it's always changing." Your business plan may change with laws, but it's crucial for starting a cannabis business.

The following things will help you to write your business plan effectively.

• Consider your business costs and when you expect to make a profit.

• Think about how you'll attract customers.

• Figure out what makes your business different and who your competitors are.

• Decide where you'll run your business.

• Choose your suppliers.

• Check if you have legal help to keep everything in order.

In addition, you will also need some funding to buy packaging for your weed business. For example, Mylar bags are the best solution to pack weeds and CBD items because they are sealed and don't allow to enter air and light inside them. 

Register Your Business

Since weed isn't legalized federally and national rules prohibit interstate cannabis sales, big businesses have mostly stayed away. This creates an opportunity for local businesses to enter the cannabis industry.

Your weed business may be local and smaller, but choosing the right business entity is crucial. It affects your taxes and risk level. You might consider an LLC or a corporation. Both shield owners from personal liability, but there are differences between an LLC vs. a corporation.

Choosing a name for your weed business is vital too. The process varies by state, but generally, you need to search for an available name and pay a small fee to reserve it for a set time. Sort these out before registering your weed business, as this information is needed for the registration process.

After getting your registration number you can print it on custom die cut mylar bags. These bags are best for the packaging of mylar bags. 

Obtain Licenses or Permits

Each state has different rules for starting a cannabis business. This means you'll need various licenses and permits, depending on where you want to open your business. Do your homework and, if possible, talk to a legal professional in your state. They can help you figure out how to register your weed business and get the right permits.

Before you start, know exactly what documents and licenses you need. FindLaw has a good resource on what permits and licenses weed businesses need in each state. Some states, like California, have special websites for licensing weed businesses. Remember, being a marijuana retailer or dispensary owner has different rules than a business that grows or delivers marijuana.

These cannabis-specific permits come in addition to registering your business in the state. Don't forget, along with the weed-specific tasks, you also have to do the regular work like taxes and registration that any business needs.

Register to Pay Taxes

Taxes for your weed business depend on your state. Wherever you are, make sure to get an employer identification number (EIN), also known as a business tax ID number. You can apply for an EIN online with the IRS and usually get it fast. It's important for tax season when you're handling payroll and income taxes. You'll also need it if you want to open a business bank account, get a credit card, or apply for funding.

Get Funding

Starting a weed business can cost more than other businesses. If you can't cover all the initial expenses, you might need funding. So, having a good business plan is important. Investors or lenders will want to see it to know if your business is well-planned and can make a profit. When you think about funding, remember to add 40%, advises Helfant.

For a dispensary, you need licenses to sell medical weed. In states where it's legal, the application fee is about $5,000. (In Louisiana, it's only $150, but in New Jersey, it's $20,000.) Many applicants struggle to meet the startup money needed for smooth operations at the beginning. 

Wrapping UP

We do hope that you have got the answer to starting a weed business. It’s a business that requires legal approvals and recommendations. Therefore, we suggest you first check in your state whether you can open it or not. Every state has its own rules. Just make sure to follow the rules of the FDA and then you can sell weed online and offline easily.