Where Should I Start a Cannabis Business?

Where Should I Start a Cannabis Business?

The legal cannabis industry is a budding market. The risk of being too early starting a cannabis business has passed. Recreational use of marijuana has been legalized in 19 states and Washington, D.C., and decriminalized in 12 more. In 37 states, doctors can write prescriptions for medical marijuana.

But the states where cannabis is legal are not necessarily great places for starting a cannabis business. In some states, you need a law-school-level understanding of state regulations to stay compliant. There are places you need to be able to show you have $2 million in capital just to open your doors.

Anyone considering how to start a cannabis business must consider whether licenses to open a cannabiscannabis plants growing business are still available. Then there is the cost of application, registration, cannabis insurance, and more. This can range from $250 to millions of dollars.

Part of studying how to open a cannabis business is taking taxes into account. Sales taxes on cannabis products range from 0% to 10%. Excise taxes range from 0% to 37%. And the going price for cannabis—the amount you are likely to be able to charge your customers—ranges from $6 to $10 a gram, depending on market saturation.

Taking all of these facts into account, we have identified the 10 best states for starting a cannabis business. These locations range from OK to highly favorable to the cannabis business. We will start with the 10th most inviting location in the US for cannabis entrepreneurs.

10. Maine

Maine encourages the cultivation of medical marijuana. Anyone who grows cannabis for medical use pays an application fee of just $300 for five patients. However, there is a $15,000 application fee for opening a dispensary. Then there is an excise tax of $355 a pound on flower and 21.5% on all sales.

9. Nevada

Nevada charges just $5,000 to apply to open a cannabis business. Unfortunately, applications are not open at this time. Nevada doesn't have an income tax, but it imposes a 10% excise tax on both medical and recreational cannabis and a 15% excise tax on wholesale marijuana.

8. Vermont

The retail price of marijuana in Vermont is one of the highest in the nation. At the time this article is being written, it is $10.78 a gram. The application fee for a dispensary, cultivation business, or cannabis manufacturing enterprise  is one of the lowest in the nation, just $2,500. However, all available licenses are spoken for at this time.

cannabis growing greenhouse7. Washington State

You won't find an application fee for your cannabis business anywhere in the United States lower than it is in Washington. It is just $250. However, you won't find an excise tax on your cannabis products higher than it is in Washington, where it is 37%. There is so much competition that the average sales price for marijuana in Washington State is just $6.81 a gram.

6. Massachusetts

It isn't just beans that get baked in Boston, even though Massachusetts has one of the higher average retail prices for cannabis, $10.18 a gram. Getting started in Massachusetts is definitely pricey, with a $40,000 application fee.

5. California

No state offers more opportunities for starting a cannabis business than California. The nearly 40-million residents of California spend nearly $3 billion a year on pot and pot-related products. Business applications require a $5,000 bond, but there are openings in all categories. There is a 15%  excise tax, and sales tax on marijuana for recreational use, but the market is huge.

4. Alaska

Growers in Alaska get an average of $10.82 per gram, although they pay the state a $50/ounce excise tax. There is a $5,000 application fee for both medicinal and recreational cannabis businesses.

3. Michigan

The former car capital of the world is becoming a hub of cannabis cultivation. Applying for your cannabis business license in Michigan will cost you $6,000, but growers pay an excise tax of just 3% and the average price per gram is $9.74 per gram.

2. Colorado

Lots of growers get high on life in Colorado, so many, in fact, that competition drives the average price of cannabis down to $7.14 a gram. Colorado legalized cannabis in 2013, so the cannabis industry is well established. It costs just $4,500 to apply for your license to join Colorado's $1.5 billion a year cannabis industry.

1. Oregon

Oregon has one of the lowest prices for cannabis in the nation, just $6.65 a gram. However, applications to get a license to run a cannabis business cost just $250, there's no sales tax, no excise tax on medicinal marijuana, and just a 3% tax on recreational weed.

 

Looking to Start Your Cannabis Business and Are In Need of Capital?

Canna Business Financing can help you find the financing you need to start a cannabis business. We can also arrange equipment loans, working capital loans, and merchant advances. We help entrepreneurs in every aspect of the cannabis industry. You can get pre-approved in just 48 hours, so don't hesitate to reach out. 



Posted by Canna Business Team


LinkedIn

Website

About The Blog

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!

Subscribe Now