In 2019, about a dozen states were working on including cannabis legalization initiatives on their ballot referendums. The number dropped to five due to the COVID-19 pandemic and petitioner campaigns.
Despite fewer states in the strategy, the move still contributed to expanding the cannabis market. The current business environment could be the best opportunity for entrepreneurs thinking of starting a business in the industry.
The Value of the Cannabis Industry in the US
The projection comes when cannabis is still federally illegal despite legalization by Washington DC and 33 other states. As legalization movements continue to take shape, the industry could soon break into new markets.
Types of Cannabis Businesses to Start
The cannabis industry is more than just the cultivators who grow the plant and the manufacturers who process it into various products. It’s a much more complex sector with more varied business types. On a broad scale, cannabis businesses fall into plant-based businesses and ancillary cannabis businesses.
1. Plant-Based Businesses
Plant-based businesses are the most well-known type of cannabis business in the industry. These businesses face heavy regulation characterized by immense oversight. Entrepreneurs must acquire licenses through a lengthy and expensive process. Plant-based businesses include:
Their primary focus is on propagating existing cannabis strains through selective breeding. They develop the seeds that cultivators use and identify the highest-quality genetics.
People in this business manage vast cannabis growing facilities and engage in various cultivation methods to develop high-quality cannabis plants.
They’re responsible for processing harvested cannabis flowers into finished products like topical and edibles for sale in dispensaries.
They’re the cannabis distribution hubs of the industry and operate like retail stores.
Transportation and Logistics:
The cannabis industry can’t survive without transporters and logistic providers. The transportation network bridges the gap between sellers, buyers, and the entire supply chain system.
2. Ancillary Cannabis Businesses
This category covers all the other types of businesses in the cannabis industry. They require the support of plant-based companies but aren’t involved in the growing, breeding, distribution, or processing of cannabis products. Examples of ancillary cannabis businesses include:
Packaging and Labeling
Cannabis products face a challenge with labeling requirements. Many manufacturers are taking the initiative to diversify their services to meet the necessities, paying attention to shelf appeal, compliance, and branding.
Cultivation and dispensary facilities must have security cameras following the regulation requirements. They also must have particular lighting and systems for monitoring. Since many businesses operate in cash-only transactions, they’re prime targets for robbery.
Examples of businesses that provide professional services are accountants, lawyers, and digital marketers. As business advisors, they must have additional expertise in the cannabis industry.
Venture capitalists and angel investors are the largest funding sources since cannabis businesses don’t have access to regular financing options. Investors look at this high-growth industry with delight because of its growth potential.
The cannabis industry requires many tools and equipment to get the work done, from breeding to manufacturing and transportation. Software to run these businesses efficiently is also necessary.
Cannabis facilities must strictly adhere to state regulations and laws, hence the growing demand for contractors who understand the requirements.
Are You Ready to Start a Cannabis Business Today?
There are multiple business options you can consider in the cannabis industry as it continues to expand. Upon starting a cannabis business, ensure you acquire the tools necessary for its smooth running and management.
MaxQ Technologies is one of the ancillary businesses in the cannabis industry. We specialize in providing business solutions for maximum business performance. Get in touch with us and let us customize a solution that works for your type of business.