- Two states will consider action to legalize cannabis in 2022, and five other states will conduct active referenda on legalization.
- Each state has its own laws governing medicinal and recreational cannabis use, and each business must follow the laws of the industries in which it operates.
- Hemp is still banned at the federal level, but crackdown on state-owned companies has been largely suspended and not funded by Congress, effectively shutting down these markets for the foreseeable future.
- This article is intended for entrepreneurs who are planning to start a cannabis business and need to understand the regulations that apply in this complex and growing industry.
Each year, new hemp legislation or referendums open up new markets for the already fast-growing hemp industry. In 2022, as major northeastern states like New Jersey and New York bring adult marijuana programs online and the cost of western adult markets increases, more states will follow suit and vote for pharmaceutical or adult use of marijuana . own legalization measures.
What does the growth and expansion of the hemp industry into new states mean for entrepreneurs interested in getting involved in the hemp industry, and what are the biggest business opportunities? For many small business owners, this can be an opportunity to focus on a fast-growing international industry that is just gaining momentum.
The importance of the US hemp industry
According to industry research group New Frontier Data, the US cannabis market will reach $72 billion per year by 2030. This prediction comes at a time when marijuana remains illegal at the federal level, even though 39 states and Washington have legalized marijuana. and Washington has legalized cannabis programs for adult use (sometimes referred to as recreational cannabis programs).
As the cannabis legalization movement expands into new states, and some members of Congress are pushing for reform and even federal legalization, it looks like the cannabis industry will continue its explosive growth as new markets emerge.
The cannabis industry is a multi-billion dollar business that will grow rapidly as new markets open up and more states legalize adult and medical programs.
States vote to legalize cannabis
It has been confirmed that only two states (Maryland and South Dakota) will vote on some form of cannabis legalization in the November 2022 election; However, five other states have measures that could be added to the vote.
- Arkansas. Arkansas True Grass is collecting signatures for the enactment of the Arkansas Adult Recreational Marijuana Amendment of 2022, which would legalize marijuana use by persons 21 and older. The second measure, the Arkansas Adult Cannabis Amendment, is supported by the Arkansas True Grass group. would also allow adults over the age of 21 to purchase and use recreational marijuana and subject the state to a 10% sales tax.
- Maryland. As one of only two states to officially pass a measure legalizing hemp in November's election, voters in Maryland have the opportunity to pass an amendment legalizing marijuana in Maryland. If passed, adults over the age of 21 may possess up to 1.5 ounces of marijuana and grow up to two marijuana plants at home.
- Missouri. Missouri's marijuana legalization initiative, which has yet to make it to a vote, aims to allow retail sales of marijuana with a 6% tax and erase the records of residents who commit unregistered violent marijuana-related crimes have committed. In July 2022, the measure failed to gather the necessary signatures to be placed on the ballot. The measure missed more than 1,000 signatures in two out of six congressional districts.
- Nebraska. In Nebraska, the Patient Protection Act and Medical Cannabis Regulation Act have received 180,000 signatures and await certification before voting in November. The Nebraska Medical Marijuana Patient Protection Act would allow patients and healthcare professionals to possess and use medical marijuana, while the Medical Marijuana Regulation Act would create a regulatory committee to oversee marijuana production and provide patients with a pathway to safe marijuana use. to offer products.
- North Dakota. New Approach in North Dakota A group in North Dakota collected more than 25,000 signatures in November for a marijuana legalization measure. If passed, the measure would legalize the use and possession of up to 1 ounce of cannabis, 4 grams of concentrates and up to 500 milligrams of edibles.
- Oklahoma. Oklahomanes for Responsible Cannabis Action seeks support of State Issues (SQ) 818 and SQ 819. 15% Sales Tax on Hemp Products. SQ 820 is the third measure Oklahoma wants for sensible marijuana laws. It legalizes marijuana for adults 21 and older and includes a 15% tax on all recreational purchases.
- South Dakota. It is the second state to officially introduce a measure to legalize cannabis in November. South Dakota votes on South Dakota's Marijuana Legalization Initiative. The initiative aims to legalize the possession, use and distribution of marijuana for adults 21 and older.
In November 2022, two states will pass measures to legalize cannabis, while five other states have collected or are collecting the necessary signatures for referendums.
Business opportunities in the hemp industry
You can think of the hemp industry simply as breeders who grow the plant, breeders who turn it into products, and pharmacists who sell those products. While these elements are central to the legal marijuana supply chain, the cannabis industry is far more complex and diverse than these companies.
Cannabis companies can be divided into two broad categories: plant stimulation companies and support companies. Here's a closer look at each company, along with some examples of companies in each category.
Build an exciting cannabis business
Cultivation-related companies include companies that might come to mind when you think of the cannabis industry, such as: B. Growers, processors, manufacturers and pharmacies. However, there are other plant-related businesses that may not be as obvious, including trucking companies and trucking companies that move harvested cannabis and finished products from point A to point B.
- Breeder. Breeders focus on propagating existing marijuana strains and developing new strains through selective breeding. They are responsible for developing the seeds used by breeders and identifying and propagating the highest quality genetics for future generations of plants.
- cultivator. Farmers operate large cultivation facilities, which are usually enclosed spaces located in large buildings such as warehouses. They practice a variety of growing techniques to grow healthy, high-quality marijuana plants, which are then harvested and often sold to processors or dispensaries.
- Breeders: Breeders such as B. Extractors are responsible for turning harvested cannabis flowers into finished products such as concentrated extracts, edibles, and topicals. Manufacturers offer a wide variety of cannabis products on pharmacy shelves.
- pharmacies. Dispensaries are the cannabis industry's distribution hubs, functioning similarly to retail outlets in other industries. Pharmacies have different approaches to retail, but generally have knowledgeable staff who can help patients and consumers find the right products based on their needs and preferences.
- Transport and logistics provider. Without a transportation network, the hemp industry could not survive. A fleet of trucks delivers flowers and cannabis products from seller to buyer, providing cannabis businesses with the equipment they need to keep them running. This includes direct-to-consumer shipping, which is legal in some states.
Exciting plant operations are the most heavily regulated companies in an industry already characterized by intense scrutiny. To start an exciting crop production business, entrepreneurs typically need to acquire licenses through an application process that can be time-consuming and expensive, with no guarantee of success. Processes for applying for licenses vary from state to state, but the number of licenses is usually limited, just like liquor licenses.
Some states require what is known as vertical integration, where cultivation, processing and distribution are carried out by the same company. Instead, other states use a specialization system, with licenses for each type of activity being awarded separately and often to different companies.
Cannabis Utility Company
Hemp-backed companies include all other companies in the hemp industry. These companies are designed to support plant-related businesses, but are not necessarily involved in the breeding, cultivation, processing, or distribution of hemp products. This can include professionals such as lawyers and marketers, as well as companies that make packaging or devices that can improve business processes that affect assets.
- Professional Services. Lawyers, accountants, and digital marketers are examples of professional services familiar to businesses across all industries. They are also important to the cannabis trade. Given the significant regulatory constraints and wide range of regulations in different states, these professional advisors need to have additional expertise focused on the cannabis industry.
- Packaging: Packaging companies rarely go directly to the factory, instead focusing on regulatory compliance, shelf appeal and branding. Packaging companies need to consider business needs, e.g. B. how to attract consumers and present company brands, as well as regulatory considerations. Colored packaging or certain branding approaches are illegal in many states.
- Equipment: There are many types of equipment that farms need. For example, growers use large machines to extract compounds from harvested hemp flowers to create hemp oils and candles. Likewise, growers can freeze harvested flowers to preserve them during transportation.
- Construction. Growrooms and dispensaries often need to be built in strict compliance with state laws and regulations. Therefore, there is a great demand for contractors who are familiar with the development of these plants.
- Security. The hemp industry relies on safety for both regulatory and practical commercial reasons. On the one hand, regulators often require certain growing and distribution areas to be visible to security cameras, as well as certain lighting and area surveillance systems. Additionally, many marijuana businesses are forced to operate primarily with cash as compliance with the federal marijuana ban imposes financial constraints, making them a prime target for theft.
- investments. With the cannabis business largely excluded from traditional financing avenues, private financiers such as venture capitalists and angel investors have entered the industry to provide financing. Family offices, private wealth management firms that specialize in servicing large investors, are common sources of funding for cannabis companies, and investors have taken advantage of this fast-growing industry. This is especially important for asset-related companies that have tens of thousands of dollars in filing fees and require significant capitalization to obtain approval.
While many people are excited about starting daycare businesses, side businesses certainly offer a lower barrier to entry. Other companies still face significant regulation compared to many non-hemp companies, but don't have to struggle through a complicated and expensive license application process.
Additionally, many spin-offs can be created by transitioning your existing business into the cannabis space or developing a new brand specifically related to cannabis. For example, with a little research and networking, a digital marketer with years of experience building websites, managing social media campaigns, and buying advertisements for clients can easily transition into the cannabis space.
Assets: The hemp industry is diverse and includes a wide range of companies. Consider your existing skills and how you can enter the cannabis industry with experience.
Growth potential of the cannabis industry
There are a number of challenges facing the marijuana business that are distinct from those faced by startups in other industries. Addressing these issues in the early days of your business and creating a foundation that will allow you to grow and adapt to the inevitable regulatory changes will be key to your success in the cannabis industry.
Here are some common challenges that building a cannabis business faces and some tips on how to overcome them:
Develop the right partnerships
It's difficult, if not impossible, to make headway in the cannabis industry on your own. The partnerships you form in the early stages can make or break your fledgling cannabis business.
Scott Rader, president emeritus and founder of the CannaBusiness New Jersey Association, said how you start your business is critical to its long-term success.
"The best way to do that now is to hire a consultant who can help develop your plans with you," Rader told Business News Daily. “You need to build partnerships and relationships across the country to give your team a competitive edge: the right processes, the right [SOPs], the right safety plan. Find the right local attorney and local CPA… with cannabis experience.
Regulatory Changes
It's also likely that the rules governing your marijuana business may change as the industry is a new and evolving territory and government officials regularly work to review and revise rules and regulations. Jessica Gonzalez, a cannabis and intellectual property attorney at Bressler, Amery & Ross PC, recommends working with an experienced attorney who can think ahead.
"Given the differences in regulations across the country … the best way for people to know the requirements of their state is to have an attorney who can explain the regulations and laws," Gonzalez said. "All of us who work with hemp know that the industry is constantly changing, so as entrepreneurs we must always be ready to change."
Banking, finance and insurance issues
Banking is a particular challenge for hemp companies: Because the federal government still considers hemp a Schedule 1 illegal drug under the Controlled Substances Act, many banks are reluctant to do business with a hemp company for fear of losing their FDIC status or to bring charges of money laundering. on "illegal trafficking in cannabis" despite the legality of cannabis: status in many states:
"In any other area, you can open a commercial bank account and name your LLC or your company whatever you want and that's not a problem," Gonzalez told your bank about what you do, but … "have molasses" or " "Cannabis" on behalf of the organization puts you on the back burner: I always recommend that those forming LLCs or companies stay away from names like this as it also hampers banking and insurance opportunities," he added:
Marketing and Marketing Restrictions
Дзяржаўныя правілы і палітыка прыватных кампаній абмяжоўваюць магчымасці рэкламы канабіса: рэклама канабіса не толькі часта забароненая на радыё, тэлебачанні або рэкламных шчытах, але і многія мясцовыя маркетынгавыя каналы, у тым ліку Facebook, таксама робяць гэта больш жорсткім: забараняюць купляць спонсарскі кантэнт для канабіса. прадпрыемствы:
Гэтыя віды абмежаванняў азначаюць, што многія прадпрыемствы, якія займаюцца каноплямі, павінны спадзявацца на кантэнт-маркетынг і больш арганічны кантэнт у сацыяльных сетках, маркетынгавыя кампаніі па электроннай пошце і магчымасці гандлёвага маркетынгу на выставах і мерапрыемствах. Падзеі ў галіны: важныя сеткавыя сувязі і рэкамендацыі з вуснаў у вусны інструменты ў маркетынгавым наборы інструментаў кампаніі па вытворчасці канабіса. . :
Канепі харанацум
Канабіс па-ранейшаму сутыкаецца са стыгмай, што гэта толькі частка «аўтамабільнай культуры», у той час як насамрэч пацыенты і спажыўцы канопляў паходзяць з людзей з розным паходжаннем: пазбягайце ўзмацнення стэрэатыпаў, звязаных з каноплямі, напрыклад, атмасферы галоўнай крамы або метро. асацыяцыі, якія на працягу амаль стагоддзя былі звязаны з забаронай:
Замест гэтага цесна супрацоўнічайце з зацікаўленымі бакамі супольнасці і выбарнымі службовымі асобамі, каб быць адказнымі членамі вашай суполкі: гэта не толькі дапаможа вам атрымаць неабходныя дазволы нарматыўных органаў, але і пашырыць доступ да вашых мэтавых кліентаў. .
"Будуць гістарычныя стэрэатыпы аб тым, хто такія спажыўцы канопляў", – сказаў Рэйдэр: "Мы маці і бацькі, юрысты, вытворцы аўтамабіляў. Гэта ахоплівае спектр спажыўцоў канопляў: аснова канопляў – гэта лекі, і гэта будзе доўжыцца Вельмі важна, каб людзі разумелі … навуковыя і медыцынскія аспекты галіны:
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Індустрыя канопляў сутыкаецца са шматлікімі праблемамі, але, наладзіўшы свой бізнес з улікам гэтых праблем і стварыўшы правільны план і партнёрства, вы зможаце іх пераадолець:
Пачніце працу ў прамысловасці канопляў
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