It’s not uncommon to hear “buckle your seatbelt” when discussing the cannabis industry, as you’re in for a wild ride. This reasoning is a shared sentiment among entrepreneurs and opportunists who see the potential for success in this booming industry. The cannabis sector is rapidly growing with new businesses popping up around every corner. With that said, we can’t blame you for wanting to start your own cannabis business to capitalize on this growth and make some huge profits.
As with any new business venture, it is critically important to understand the industry landscape, including its potential earning and risks, find your niche, and develop strategies to ensure a prosperous business endeavor. Furthermore, the path to a successful cannabis business is more complicated than most due to confusing laws and regulations, so you must know what you are up against before diving in headfirst.
In this article, we’ll provide you with industry insights to touch on the opportunity of owning your own cannabis business. We’ll also introduce you to the types of business opportunities in the market to get the wheels spinning and prepare you for your journey ahead.
Let’s start with some statistics to fully grasp the opportunity and better understand what’s trending in the cannabis market.
Currently, more than half of the United States–33 states plus D.C. (at the time this article was written)–have access to some form of legalized cannabis for medical or recreational use, and one in five Americans live in a state where they can legally use marijuana recreationally.
Marijuana sales are experiencing double-digit, year-over-year growth. In 2016, marijuana sales in North America grew by a massive 30 percent. The cannabis industry is projected to reach $24 billion by 2025, a moving target as the awareness of the plant’s benefit continues to increase. To put things in perspective: the California market is already worth an estimated $8.5 billion, which is larger than each of the three biggest agricultural markets in the state right now, namely milk and cream ($6.1 billion), grapes ($5.6 billion), and almonds ($5.2 billion).
The Green Rush – Nice Opportunities
The cannabis industry is primarily known for two business types: growing and selling. However, the market is not limited to cultivators and dispensaries, as many new business opportunities are sprouting up (no pun intended). For example, many new companies (especially in California) are filling market gaps with forward-thinking and innovative solutions. Ancillary businesses, such as ag-tech companies, payment processors, consultants, digital marketers, and accountants, are needed to support market growth. Moreover, value-added manufacturers are creating new cannabis-infused edibles, beverages, and concentrates for new customer types.
Finding a niche and coming up with a unique idea that fills an unmet need is an essential part of starting a successful business endeavor. Below are a few industry niches to consider.
If you have a green thumb, consider starting a growing business. This area of the cannabis industry is highly regulated, meaning you may need to make a significant financial investment to prove your horticultural knowledge. You’ll also need to purchase all of the equipment and find a place to grow your product, which is another expensive up-front cost.
Sales & Marketing
The majority of sales take place in dispensaries or collectives – the names for retail stores that sell cannabis-based products. Bear in mind that customers must meet specific criteria to purchase marijuana, for example, based on age in states where cannabis is legal for recreational use, or they must own a medical marijuana card. The upside to this niche is that it is very profitable; however, the downside is that you may experience challenges associated with regulations and requirements. For example, it’s hard to advertise your cannabis business, even where it’s legal, and you can’t promote on social media or most other online platforms.
A new industry has risen with the legalization of recreational cannabis, namely a market for edibles and cannabis-infused products. Cannabis-infused consumables are not only discreet (and in most cases delicious), but they also appeal to a wide range of people, such as those who prefer not to smoke, want a new experience a new high, or aim to control their dosing.
Put another way, the ease of use, types of delivery options, and undeniable appeal of controlled dosing are some of the most obvious perks associated with cannabis-infused products. It’s no surprise that these products are surpassing raw flower sales, which last year constituted less than 50 percent of all legal cannabis sales in the United States.
Like all plant-touching businesses, manufacturers of cannabis-infused products must be acutely aware of their state’s regulations and abide by them carefully. Here at SpaceStation, we take a unique approach to manufacturing by providing our business partners with a turn-key solution.
Contact us for more information on how we can help develop and take to market your cannabis brand.