5 Ways to Make Money in the Legal Cannabis Industry
The legal cannabis industry has grown in leaps and bounds over the last decade. One by one, states have adopted laws to allow both recreational and medical use. In response, an entire industry has grown up around producing cannabis and getting it into the hands of consumers. Needless to say, there are boundless opportunities for willing entrepreneurs.
This post outlines five ways to make money in the legal cannabis industry. There are many other opportunities, including ancillary and tertiary services. Any opportunity to get in on the ground floor of what is still a relatively new industry in the U.S. is worth pursuing by entrepreneurial types who have a thing for cannabis.
1. Cannabis Cultivation
The entire cannabis market begins with cultivation. Cultivators, also known as cannabis growers and farmers, create the plants that ultimately become retail products. Note that cultivation is not necessarily easy. Being successful requires knowledge, skill, hard work, and a little bit of luck.
States with legal cannabis programs license their cultivators. Fees have to be paid and entrepreneurs have to prove they are able to operate a sustainable business. After that, they must bring on the right people to help them make a go of it.
2. Cannabis Processing
Cultivators harvest their plants and then send them to processors. It is the processor’s job to prepare cannabis flower for retail sale and/or extract valuable cannabinoids and terpenes from plant material. Most processors do both. Processing flower is fairly straightforward; extracting cannabis crude oil is not.
Cannabis extraction requires specialized equipment and quite a bit of knowledge. Processors looking to get into advanced distillation techniques in order to separate cannabinoids and terpenes need even more knowledge and skill.
3. Plant and Product Testing
Most of the states with legal cannabis programs mandate that all products and plants be tested. Testing is required for two reasons. First is to determine the amount of THC a plant or product contains. Anything with a THC content above 0.3% is considered a marijuana product. Plants and products with less than 0.3% THC are considered CBD products.
Testing is also required to guarantee plant and product quality. Lawmakers expect cultivators and processors to produce safe and pure products. The only way to guarantee that is through testing.
4. Retail Sales
Next up is the opportunity to open a retail business. Note that the states regulate legal cannabis in different ways. In Utah, for example, the law only allows for licensed medical cannabis pharmacies. Payson’s Pure Utah is an example. It is one of only fifteen licensed pharmacies in the state.
In California, the law allows for both medical cannabis pharmacies and recreational dispensaries. Some types of businesses operate as both. Your retail opportunities would be subject to the laws of your state.
5. Wholesale and Retail Distribution
Finally, wholesale and retail distribution is a burgeoning enterprise within the larger cannabis industry. Wholesale distributors transport plant material between cultivators and processors. They transport finished product between processors/manufacturers and retail outlets. As for retail distribution, it involves delivering cannabis products to retail customers at their homes.
Regardless of the business opportunity pursued, entrepreneurs have to be licensed to operate in the cannabis industry. States have varying licensing requirements that must be met. They also tend to charge substantial fees to obtain licenses. Nonetheless, opportunities to make good money in the cannabis industry abound.
Some 50 years ago, few people expected cannabis to be a viable industry. But it is. And it just happens to be one of the fastest growing industries in the U.S.