There is more that goes into running a cannabis business than planting some seeds and harvesting the flowers. Running a cannabis business means you will have to account for all aspects of the cannabis business. This will include all information related to tracking, invoicing, reporting, transportation, and cultivation. With so many aspects related to running a cannabis business, it is imperative to write a cannabis business plan so that each aspect of the operation runs smoothly.
The Outline of a Cannabis Business Plan
- Learn the laws, regulations, and restrictions in your jurisdiction
- Government/Authority reporting
- Compliance, restrictions, and regulation information
- Design your growing space
- Indoor vs. outdoor
- Purchase materials and equipment
- Consider funding and financials
- Talk with investors
- Take out a business loan
- Try crowdfunding
- Implement Seed to Sale Software
- Develop Growth Methods and Predict Forecasting
- Review the costs, profits, and total pounds harvested
- Forecast for the next year
I. Learn the Laws, Regulations, and Restrictions in Your Jurisdiction
Your first step in developing a cannabis business plan is to research the laws, regulations, and restrictions in place for your jurisdiction. This is the most important step in writing a cannabis business plan. Failing to comply with local and state laws and regulations can immediately strip you from having a cannabis business.
- Licenses. The first step in starting a cannabis business is to obtain a license in the jurisdiction in which you live. Each state will have different requirements, regulations, and restrictions, so you will need to research the requirements in the jurisdiction where you live and apply for the license accordingly.
- Taxes. You will be required to report and pay taxes to your local jurisdiction for the cannabis that you harvest. The method in which you report and the rate at how much you pay will vary from state to state, so you will need to research your state’s requirements for reporting and paying taxes on harvesting cannabis.
- Government/Authority Reporting. You will be required to report various information to your local government or authority. The frequency of reporting will vary from state to state. For example, cannabis growers in Oklahoma are required to report a variety of information to the Oklahoma Medical Marijuana Authority on the 15th of each month. This report includes various types of information that took place in the month before.
- Compliance, Restrictions, and Regulations. When starting your cannabis business, you should familiarize yourself with the everchanging allowances, restrictions, and regulations that are permitted to each jurisdiction. This will ensure you are remaining compliant in this highly-regulated enterprise.
II. Design Your Growing Space
- Indoor or Outdoors?
- Indoor growing spaces can be grown at any time of the year as they do not require the hot and humid months of April, May, or June to be planted.
- Indoor growing spaces may require additional supplies, materials, or equipment to successfully grow cannabis plants. This can include tarps, planters, pots, lights, and humidifiers.
- Outdoor growing spaces rely on nature to provide light, humidity, and hydration.
- Outdoor should be sown in the warm months of April, May, or June when the soil temperature is at least 50 degrees or warmer.
- Purchase Materials or Equipment. Whether you are planting an indoor or outdoor garden, you will likely need to purchase supplies, materials, or equipment to ensure that you have all of the right tools for the job. This can include a tarp, 5-gallon buckets, planters, pots, garden shears, garden shovel, soil testing kit, fertilizer, and pesticide.
III. Consider Funding and Financials
You will likely require money upfront to start your cannabis business. The good news is that after a successful harvest, you may not have to ask for financial help from friends, family, or investors.
- Talk with investors. If you personally know someone you can ask to invest in your business, you should consider asking if they would invest in your business to get it off the ground. This can include asking them to pay the license application fee or purchasing the seed to sale software.
- Take out a business loan. One of the simplest ways to ensure you have enough money to get your cannabis business off the ground is to take out a small business loan. This will help give you enough financial backing to take care of specific requirements for the business, such as licensing and software.
- Try a crowdfunding website. Social media and networking is a great way to reach people without personally asking them for money. (We get it, that can be awkward.) Try crowdfunding to reach large amounts of people. You don’t need one or two people to make a large contribution. Instead, have many people make small contributions for you to reach your startup cost goal.
IV. Implement Seed to Sale Software
This is where you will turn your cannabis business plan into a smoothly-run operation. Seed to sale software handles every aspect of the cannabis business operation. Seed to sale software will keep track of your inventory (including each stage of life, where the seeds were purchased from, and to whom the final product will be sold), organize transportation information and credentials, create invoices, and generate reports required for government authorities.
V. Study Patterns, Develop Growth Methods and Predict Forecasting
Take what you learn from your first season of cannabis harvesting and make predictions for how to maximize your next harvest season.
- Review the costs, profits, and total pounds harvested. Not only is this imperative for determining future forecasts, but it is also an important component in determining a budget for the next harvest. Review and analyze this data to determine if you need to make any cuts or additions to your budget.
- Forecast for the next year. Did you notice that you were stronger in one area and weaker in another? Did your crop produce in record time, or was it slower than usual? While this section of writing a cannabis business plan may come after one or two successful seasons, it doesn’t lessen the fact that you can take this information and build a cannabis business plan that will dominate for years to come.