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How to Start a Cannabis Business


Starting a cannabis business requires planning. With the right information and resources, it can be done seamlessly. 

Here are the nine steps you can take to start building your very own cannabis business.


9 Steps to Launching a New Cannabis Business

1. Choose Your Type of Cannabis Business

The first step in launching a cannabis business is to identify the type of cannabis business you want to launch. You might choose from the following types among others:

  • Cultivation facility
  • Dispensary
  • Delivery service
  • Manufacturing facility

You will need to choose the business model that is right for you based on the products or services you want to offer, your target market, your budget, and other factors. 

No matter which model you choose, make sure that it aligns with your business goals and the products you offer.


2. Name Your Cannabis Business

Give your cannabis business an identity so people will think of it as a well-known and respected brand. You can take the name of your cannabis business from your industry, focus on a geographical location, or use your own name among other options.

The main goal for naming your cannabis business is to make it sound appealing and trustworthy so that customers will want to buy your products or services.


3. Choose a Legal Form for Your Business

By incorporating your cannabis business, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.

The business structure you choose for your cannabis business will determine the amount of taxes you pay and which state or federal tax forms you need to file.

Read our article comparing the most common cannabis business structures.


4. Write a Cannabis Business Plan

All cannabis business owners should develop a business plan. 

A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team among other things.

When developing your cannabis business plan and strategy, you should think about the following questions your customers might have:

What type of cannabis business should I start?

How do I name my cannabis business?

What is the right business model for me?

What legal form should I choose for my cannabis business?

How do I write a cannabis business plan?

How much will it cost to start my cannabis business?

How do I get a license to grow or sell cannabis?

What are the requirements for starting a cannabis dispensary?

What are the requirements for starting a cannabis delivery service?

What are the requirements for starting a cannabis cultivation facility?

Do I need insurance for my cannabis business?

What are the risks of starting a cannabis business?

What are some tips for success in the cannabis industry?

How do I find the right investors for my cannabis business?

How can I grow my cannabis business?

Read our article about how to write a cannabis business plan.


5. Apply for the Necessary Permits and Licenses

There may be required licenses and permits you need to obtain before launching your cannabis business.

For example, if you plan to cultivate or manufacture cannabis products, you will need to obtain a license from the state government. And if you want to open a dispensary, you will need to comply with local zoning laws and obtain a business license from the city or county.

You must also register your cannabis business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.

Registering with the federal government is also essential so you can properly pay taxes for your business. You will also need an Employer Identification Number (EIN), which you can apply for at the IRS website, if you plan to hire employees.

Read our article about obtaining the proper cannabis business licenses.


6. Determine Your Budget & Apply for Funding as Needed

In developing your cannabis business plan, you will figure out how much funding you need to start and grow your business.

If you have your own funds to invest in your cannabis business, you may consider taking advantage of that. In addition to your personal funds, other forms of potential funding for your cannabis business include traditional bank loans, SBA loans, credit cards, angel investors and family and friends.

Read our article about the costs associated with starting a cannabis business to help you determine if funding is needed. 

Read our article about how to fund your cannabis business


7. Get the Technology & Software Needed to Run Your Business Efficiently

When you start your cannabis business, it’s essential to have the right technology in place to maximize efficiency. You definitely need a computer with Internet access, and accounting software for tracking expenses and revenues. 

You may also want to invest in customer relationship management (CRM) software to help you manage your customer data, and point-of-sale (POS) software for sales transactions. And if you have a dispensary, investing in tracking software to comply with state regulations is a must.

In addition to the basic technology needs, consider how you will market your cannabis business online. You will need a website, and social media accounts on major platforms like Facebook, Twitter, and Instagram.

You should also sign up for online directories that list cannabis businesses in your area.

Read our article about the technology and software you need to run a cannabis business.


8. Market Your Cannabis Business to Potential Customers

Before selling your products, you must let the world know you exist. The first step is to create a website so people can learn more about your products and how they benefit them.

After you launch your website, start promoting it through social media channels like Facebook, LinkedIn and Twitter. Also consider networking with other people in the cannabis industry through social media and blogs so they can help share your business. 

You also need to start gathering the materials needed to execute on your promotions strategy, which is your strategy for attracting new customers. Cannabis businesses should consider the following promotional strategies for which you should start getting prepared:

  1. Sponsoring events in the community that are relevant to your target market
  2. Producing content (blog posts, videos, etc.) that educates people on the benefits of cannabis
  3. Creating a loyalty program for customers
  4. Participating in trade shows and conferences related to the cannabis industry

Read our article about how to market your cannabis business for more tips.


9. Get New Customers & Grow Your Business

When you promote your products, you’ll start to get interest from potential customers

Make sure you’re ready to serve these customers. Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your cannabis business.

Read our article about how to effectively grow your cannabis business to learn more.


Starting a Cannabis Business FAQs

The legal cannabis industry is one of the fastest-growing industries in the United States, and it shows no signs of slowing down. In fact, Business Insider reports that the legal cannabis industry could be worth $57 billion by 2027. 

For entrepreneurs looking to start a business, the cannabis industry presents a unique opportunity. Not only is the industry growing rapidly, but it’s also relatively new, which means there’s still time to get in on the ground floor.

There are a few things you need to do to market your cannabis business online:

  • Create a website for your business
  • Set up social media accounts on the major platforms like Facebook, Twitter and Instagram
  • Sign up for online directories that list cannabis businesses in your area
  • Produce content (blog posts, videos, etc.) educating people on the benefits of cannabis
  • Participate in trade shows and conferences related to the cannabis industry
  • Advertise your products and services on relevant websites and blogs

A simple checklist to use when starting a cannabis business is as follows:

  1. Choose Your Type of Cannabis Business: This should be based on what you are best at and how much experience you have. Remember to always keep your interests, skills, and experience in mind.
  2. Name Your Cannabis Business: This should be done carefully, as your brand is important for attracting the right customers. A simple, memorable name will go a long way.
  3. Choose a Legal Form for Your Business: Whether you become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
  4. Determine Your Cannabis Business Model: Determine how your business will make money. Will you sell products, services, or a combination of both?
  5. Write a Cannabis Business Plan: Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow.
  6. Apply for the Necessary Permits and Licenses: In most locations you will be required to apply for a business license and permits before you can begin operations.
  7. Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
  8. Get the Technology & Software Needed to Run Your Business Efficiently: You need the right tools to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
  9. Market Your Cannabis Business to Potential Customers: A solid marketing plan will be crucial to your success. It should focus on attracting the right customers so that you can provide them with the products they truly need. 
  10. Get Customers & Grow Your Business: Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your products



Starting a cannabis business requires careful planning and execution. Following the steps outlined above can increase your chances of success. Remember to stay up-to-date on industry news and trends so that you can pivot as needed and always be one step ahead of the competition.