Are you thinking about starting a cannabis company in America? There is nothing more American then starting a company in a legal gray area. It’s an excellent business opportunity given the fact that if you start a company in the cannabis industry you will already be ahead of 99% of your fellow citizens. Cannabis is one of the fastest growing industries in America. Studies suggest that the legal sales of cannabis jumped to over forty-five percent in the USA in 2018 alone. Some projections say that recreational cannabis sales will be over $17 billion by the year 2021.
Now, this is the kind of growth that no smart investor would want to ignore, right? Add to that the laws surrounding cannabis are becoming more and more lenient by the day. People’s changing mindset about cannabis are changing just as quickly. I believe that this is due to a combination of pop culture as well as scientific research. Everyday another study is released that shows there are real medical benefits from cannabis depending on the condition you have.
There are unlimited job openings in the cannabis industry. Some of the most obvious job openings range from being a grower, distributor, seller, to a deliverer. But, as any businessman knows, one of the keys to making a business successful lies in choosing the right location. Location, Location, Location. However the cannabis industry forces you to work in certain states. Currently you can only work in 9 states unless you want to go to jail.
So, keeping all these factors in mind, here is a list of the best five states to start a cannabis company in America and the reasons why.
California has always been ahead of the times, it was also the first state to legalize medical use of cannabis. The cannabis industry in the State is flourishing, in fact it raked in more than $2.75 billion in recreational and medical cannabis sales in 2018. This was the highest among all the states in 2018. The good news is that this number is only expected to rise higher in the years to come. This money has been used to fund infrastructure and schools. However California is not perfect and has a very high cost of living as well as high taxes compared to the rest of the country.
What You’re Dealing With In California
Fierce Competition: An important thing to keep in mind is that starting a business in California can be expensive, and even more so, when you consider getting a commercial property in the high-income areas like Orange County or Los Angeles. If you aren’t a California native moving and immediately setting up shop could be a bad idea unless you have a lot of cash to burn. It could take a year or two to get a feel for the area and get insider knowledge. Cannabis has been legal the longest in California so even though cannabis is a new industry there are lots of seasoned cannabis business experts already living in California. This means that the competition is going to be fierce.
There Are Lots Of Tourists: California has been a tourist spot for more than 100 years. Not only do people come to California from the rest of America but you get people from all over the world. People were visiting California before cannabis became legal. Now that cannabis is legal you are getting a whole new type of tourist just looking for great cannabis. This doesn’t mean you have to open a dispensary. Tourists need a lot more than just cannabis. I would stay at a “Cannabis Bed & Breakfast” especially if the food is amazing because you know the munchies are coming. This, in fact, offers further opportunity for the cannabis entrepreneurs to flourish their business.
So, California could be the perfect place for you if you are planning to start a cannabis company however it really depends on the type of company you decide to start.
Since 2014, the regulated sales of cannabis in Colorado has crossed six billion dollars. In fact, the sales are expected to hit fifty billion dollars by the year 2026, which proves the lucrativeness of cannabis in this Colorado. Colorado is an interesting state, it has a large population of liberal young people as well as an older more conservative population, however the vast majority of the state supports legal cannabis sales. Like California, Colorado has a lot of tourists however these tourists don’t want to sit on the beach or shop in beverly hills, tourists in Colorado love the outdoors and enjoy skiing and hiking or biking.
The Reasons To Choose Colorado
The Ease Of Obtaining A License: One of the main reasons behind the exponential growth of the cannabis industry in Colorado is the fact that the state government makes the process of applying for the license really easy. Here, licenses are available for everyone involved in the industry, such as cannabis transporters, testing facilities, cultivators, retailers, and professional operators. The state of Colorado is not trying to limit the number of cannabis businesses and is letting the free market do it’s thing.
Diverse Opportunities For Businesses: The highest profits are raked in by the medical dispensaries and retail stores, however, the delivery services are also doing really well. Colorado presents an interesting opportunity for delivery due to the harsh terrain of Colorado. The roads in Colorado can be especially treacherous during the winter. People are still going to need their cannabis when it snows but may be unwilling to risk driving in the weather. Drone deliveries are another option however drone technology may not be at the level it needs to be to travel long distances without recharging the battery. Also flight laws make flying drones around much more complicated as well as making you liable for anything that happens.
Advantage For Growers: Colorado also has the advantage of having an extensive countryside spanning miles, which makes it a much-favored State for the ones looking to get into marijuana cultivation. California has a lot of land for growing but the cost of land is much more expensive. Land in Colorado is relatively inexpensive. What a lot of people don’t know is that ski mountains are federally owned. This makes it illegal to have cannabis on ski mountains, this is important to keep in mind.
People in Washington buy the most cannabis per person compared to all the legal states in the country. Your average Washingtonian buys $220 worth of cannabis per year on an average. To your average smoker this may not seem like too much but this includes everyone in the state, including people who don’t smoke at all. So, Washington is a highly lucrative destination for entrepreneurs looking to get into cannabis businesses.
The Reasons For High Sales In Washington
High Sales Of Cannabis, Products & Derivatives: The people of Washington absolutely love their cannabis, and that is indicated by the high sales of products like oils and creams, and not to forget edibles and concentrates as well as the almighty flower. It is also important to keep in mind that Seattle, the biggest tech business capital of the world. Seattle is often slept on but it is the home of companies such as Weedly, Amazon, and more.
Plenty Of Alternative Locations In Washington: You can always look for alternative cities to Seattle, like Spokane, Bellingham, Olympia, and Tacoma to open your business. The taxes remain the same but other costs of setting up business are comparatively low. The demand will still be high and you may be able to open up multiple locations and end up being more profitable then if you put all your eggs in the Seattle basket.
A Few Important Points To Note
The State is currency not issuing licenses for retailers, but you always have the option of taking over a licensed business. There are already lots of delivery services however the delivery service in Washington is different than the rest of legalized states. The way the term ‘deliverer’ is used in Washington is important. You are not legally allowed to deliver any such product directly to the consumers but you are allowed to transport in a B2B sense. Furthermore, the cannabis retailers of Washington have to pay the highest tax rate of 37%, so yes, it is a bit expensive here.
Oregon has a flourishing cannabis industry, and it holds several records to its name. First off, this was the first State that decriminalized the possession of marijuana in 1973. It was also the third State to have legalized the recreational usage of cannabis. At present, the industry is booming in here with sales hitting the $777.6 million mark. In fact, Oregon is not too far behind Washington in terms of per person sales, as people buy $130 worth of cannabis per year on average.
The Reasons For The Sales In Oregon
Lower Operation Cost: It doesn’t matter if you make $1 million a day if you spend more than that every day. Oregon has a much lower tax rate than Washington. Oregon has a seventeen percent tax rate compared to Washington’s thirty-seven percent tax rate. Oregon also has a lower minimum wage than Washington. Oregon’s minimum wage is $11.25 compared to Washingtons $12.00. This may not seem like a big difference however it makes a difference in the long run.
Increasing Population: The states population has been showing steady signs of growth in the last couple of years, and even tourism has started picking up pace. More people equals more customers, also having more people come to the state should in theory decrease wages.
Cannabis Business Permits: An important point to mention in this regard is that marijuana licensing have been temporarily put on hold in the State, but you always have the option to take over the licensed businesses.
Want to open a successful marijuana business, but don’t feel like moving to the west coast? Well, Nevada could be for you. It has to be said that Nevada is a strange state. The State has the complete and undivided attention of cannabis investors. Sales of recreational cannabis in Nevada kicked off on 1st July, 2017, Nevada has had steady growth in profits ever since legalization. The Silver State, in just one year, has had a staggering $529.9 million of total sales. Out of this, nearly $424.9 million came from tourists. All said and done, Nevada has collected $69.8 million of tax revenue. This was about forty percent more than what was projected.
Why Is Nevada Killing It
The Early-Start Program: Firstly, Nevada launched its early-start program. Nevada came prepared for legalization which sped up the process allowing more licensed dispensaries to get set up. Nevada knew that lots of their sales were going to be from tourists and they had to have stores open.
Learning From The Past: Secondly, waiting so long to legalize cannabis industry brought its own perks for Nevada, as it could watch and learn from the mistakes of its predecessors: Washington and Colorado. Thus, the recreational cannabis launch became a lot easier for Nevada.
Sin City: Finally, Nevada is home to Las Vegas, Sin City, and thus, the tourist industry is massive here. Colorado and Washington get their fair share of tourists, but nothing beats the pull of Sin City, which is the most visited US destination.
The market is still young and growing, and so, there can be no better time to make your move. The taxes here are just like Colorado so operating costs are low. The high-spending tourists will make sure you get rich. And if Las Vegas is too expensive for you to open business there are other locations like Reno and Mesquite.
So, now you know the locations where you can start your next business venture. All you need to do is start researching in detail about the laws, write down your business plan, and eventually launch your cannabis company.