With marijuana legalization booming across the country, there has never been a more ideal time to step into the marijuana business. While this business may be highly profitable, it can be very confusing and it's important to make sure that you have all of your bases covered. Getting started can be a very tedious process, and you will want to consult with as many people as possible to ensure that you are following all local and federal guidelines in order to set your business up for success.
Here we have broken things down to help you get an outline of what you can expect when starting your edible business, as well as a few key pieces of information you will definitely want to keep in mind.
Note: Laws and regulations vary from state to state (and country to country). Always make sure you are in compliance with local guidelines and policies to avoid fines and potential criminal charges.
Cross-contamination is a very real risk, so if you already own a business where you are producing items for consumption (such as a bakery, restaurant, or coffee shop), you need to have a separate building in order to start producing edibles. For many business owners, this may be a difficult hurdle to overcome. However, if edibles are your only business, it is much easier to get started.
Note: Depending on where your business is located, everything pertaining to your edible business must be done in this separate building (with separate air filtration system and HVAC). That includes not only creating the edible itself but also packaging the product, placing labels, and storing the product. In addition to this, the employees that are working with the edibles (as well as the packaging and storing) must be separate from the rest of your business.
You will also want to ensure that the location of your building is not within a certain radius of a school, as this could be in violation of state and federal laws. Check with your state to ensure that you are producing marijuana edibles in an appropriate location.
Related: Regulations in Cannabis Real Estate
Outside of the basic licensing requirements for starting a business, you will need to dive a little deeper when opening an edibles business. Start by deciding whether you want to form an LLC or Corporation, and make sure you consider the pros and cons to each. You will also want to decide if you want to have a DBA (Doing Business As), in addition to your LLC or corporation filing in case you want to market your product under a different name. Finally, you will need to file with the state in order to get your Federal Tax ID for tax purposes.
Not many potential business owners have the type of revenue that is required for most edibles businesses to get started. It's important to find a company that has the knowledge and experience to help you get started on your path to creating a profitable business with cannabis edibles. The team at Canna Business Financing can help you do just that. In fact, you can get pre-approved within 48 hours.
It's also important to note that waters get a little murky when it comes to banking. One of the more common issues that an edibles business runs into when opening is finding a bank that will work with them (both in banking and lending). While cannabis edibles may be legal in many states, they are still federally illegal (which creates additional hang-ups).
Currently, the SAFE Banking Act is in motion (but has not yet passed as law) which will make it easier for companies wanting to sell marijuana edibles to find a trusted financial institute to do business with. That being said, financing is still available for those in the marijuana industry. Make sure you read reviews on companies and interview them prior to selecting them to manage your finances (or float you a loan).
As with any business, a good marketing tactic is key to selling your product. If your finances allow, consider consulting with a marketing firm to develop your brand, create logos, and tie everything together.
For those business owners on a budget, check out various inspirations from other companies and then make it your own. You can also save a lot of money by doing your own photography or hiring someone on websites such as Fiverr. When it comes to a start up business, try and pinch pennies where you can (without sabotaging yourself!)
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In an industry that is constantly evolving, Canna Business Financing provides business owners with a reliable source to gather the most up-to-date information. From resources to fund the growth of your business to insights on best practices to scale, look no further!