Why Starting A Marijuana Business Is So Hard | Big Business By Business Insider

growing harvesting and selling weed legally is really hard in the u.s. from tracking to packaging the laws are different in every state to start a farm can cost up to $80,000 alone the regulations are really part of what layers on those cost is marijuana companies can get it right there’s a lot of opportunity for Success it can become over a hundred billion dollar industry and that’s like a protein with the beer industry is a business makes a mistake I can quickly slide from severe jail time for drug trafficking laws visited three marijuana companies across the US to see what the regulations are so tough to follow and how they’re keeping entire communities out of the industry

marijuana with THC or the stuff that gets you high is now fully legal for medical use in 36 States and DC of those 18 and DC have legalized it for recreational use but it’s still illegal on the federal level so every state has free rein on how to regulate it that’s probably the most challenging thing and it all starts with the business license the first barrier to the marijuana industry will in Adriana wanted to start a farm in California but they are a license to grow can cost almost $80,000 with a $1,000 application fee that’s a lot more than a liquor license in California which can cost just over $15,000 Max they can get one which makes it very competitive

samples and who’s got 250,000 live with capital Q people that begins to immediately lockout whole Community will need Rihanna couldn’t afford California cultivation license so we decided to put down roots in Oregon there a license and application fee cost between 4000 and $10,000 and a liquor license 800

in both States aspiring cannabis entrepreneurs also have to sign a lease on a property before they can apply for a license any money but your license application may not go through we waited two years for a license they got approved in 2020 and started their company magic hour cannabis in Portland

these are so small I know it’s good for me to just look ridiculous

nice and fit it we finally waited this two years we just waited for months for our plans to be ready to harvest and we’re basically dwindling with no money it was very scary we didn’t know if we were going to go under before we even got so willing Adriana applied for a grant through New Leaf a nonprofit that helps fund black and brown old cannabis companies specifically those two things come together a high Capital intensive business and then the lack of personal Capital personal wealth and it’s a hard place to start for a black founder and cannabis we apply for the new leaf and we’re able to get $10,000 which honestly for cannabis companies especially grows is not that much to give us a little more time to sell if we started making sales and gaining momentum

the expensive regulations don’t just stop at the license in Oregon the government requires Farms to have seed to sale tracking cannabis into the illicit Market explains using tags with barcodes as you can see all these metric tags hair made out of plastic and you can’t reuse them the tag takes me hours on end and then you have to physically go and move them around each plant they cost around $0.50 a pop which is really expensive when you have 1100 plants in your facility when they’re young and the tag stay with the plants through Harvest Purple so that’s one indicator that the plant is quote-unquote finishing up

drop it off and then we’ll hang this up here we have to individually way every single plant according to the tag number that we got the freedom to 1005 579

where does 183 go and then go on to the next one with the pretty tedious process but for regulations we have to do it

so wet wet we wait dry and then we wait a waste from each plant and enter that in making sure that every single part of the plant is accounted for the pound of that gelato baby

and then there’s a whole other set of regulations for turning marijuana into Edibles based in Denver water brands is one of the top THC gummy makers in the country it launched two years before Colorado legalized recreational marijuana in Colorado back in 2010 there really were not a lot of regulations in place that’s founder Nancy Whiteman she’s expanded wanna into 11 different state but remember cannabis is federally illegal so it cannot cross state lines which is essentially centers one has to partner with license Growers and manufacturers those Partners grow and make the product locally using one is recipes and brand-name then the companies share the revenue have as much control of its supply chain as they might like if say they’re grower in California as well as high quality than the grow in Colorado what is that due to the brand sort of very hard to control that

you also have to follow different manufacturing and packaging laws for won the TC symbol stamped on the gummies come in all forms of certain states have decided that looks too tempting for children so you can’t have fruits their difference is 5 mg in other states Windows give you 10 mg the last step delivery thanks so much

you have a good one when Adrian women moved to Portland in 2016 he had to fight hard for his company to even exist there was no type of license for delivery only retailers I immediately started going to all of the public hearings for the rulemaking basically to plead my case and let them know like hey I love that delivers option but these proposed rules no one can run an efficient business so let’s remove this get rid of this and luckily they decided in my favor being passed a law allowing cannabis delivery in 2016 and then open green box a delivery and Subscription Service did the whole nine when I was getting fingerprinted for my life as it was just a really weird cuz I was like man the last time I got in fingerprinted I was going to jail and now I’m getting fingerprinted

to sell it legally in first started delivering only $100 worth of cannabis was allowed in the car at one time send Adrian a gun lobby and got the limit raised to 3008 been told no

so I got two pork pulled up on my phone and this is basically a box of pre-rolls this one is going to northeast Portland Chris my manifest for the state tracking that whole drawer is just all

manifest

different deliveries have to keep them for three years has to follow on a delivery that’s because Regulators want to make sure no marijuana products go out the back door is not practical what I’m building my manifest Google Maps me to tell me the quickest time at that point but I accidentally happened and I may have to detour and if I do not follow those directions I have to go back and update my route I do I do understand that it needs to be regulated and track but I do think some things are just a little ridiculous for a just not practical but those tough regulations can’t be ignored from about twice a year to check-in they will pop up at knock on your door it is the scariest thing ever visit very stressful it can find that rules aren’t being followed a lot of bad stuff can happen at least severe you’re probably fine if you are

I’m crying at the flight unlicensed cannabis then you’re talking about it and then you’re talkin about jail time and that’s a delicate Dan to try and make sure that they’re staying on side of regulations no matter how rapidly they’re changing their risking themselves personally and financially all these unavoidable regulations make starting a weed business really expensive Forbes reported startup costs could be as high as a million dollars for a dispensary and reason that kind of capital can be hard on cat traditionally go and just get a small business loan because of it being a federally legal substance so Bank won’t loan for that reason I can’t take credit cards because it better legal to doing business mostly all in cash really got to get your business funding from your personal wealth or from your network well situation at the Capitol in Austin time that correlates with being white is there a white male dominant and there’s no reason that that is what it should be only 2% are black

were most affected by marijuana that legal status in the past there is kind of a queer through on from the War on Drugs black people are four times as likely than whites to get arrested for cannabis use despite using at very similar raids across age groups across different state who’s in favor of federal legalization believe it could close the capital Gap Andis regulations with full scale Federal legalization there would be loans available for an RV entrepreneur so if you’re a minority entrepreneur and you aren’t connected to these wealthy private investors you can actually get a loan on pretty favorable terms from a bang Senator Chuck Schumer proposed legislation that would legalize marijuana federally Jeremy says at the core of that legislation is equity have not received those benefits in the past I need minority entrepreneurs black and brown people that would include a certain percentage of the licenses for those people specifically

you must go into reparative Justice for black and do some Latin X communities the bill would also mean the FDA would standardized regulations in every state as complicated as how much THC is allowed per unit across state lines if we were able to export our sales would definitely open up even more be allowed is inventory in our vehicle something like our hottest in the trunk in the stay ready to go of me doesn’t think Federal legalization will pass within the year there’s been pushed back on the bill there bad cannabis is a drug so why are we saying it’s okay number one is simply highway safety there’s no such thing as yet

standard to say like okay you’re high after you’ve had to pop everybody has a different holler and see if she binds to fat cells a blood test after the fact that my tell you smoked last week another key hurdle is around 10 use there is a lot of traveling research that cannabis does really impact the development of adolescent brain in terms of developing mental conditions like anxiety depression even suicidal ideation but studies in states with legalized marijuana show team used is actually down because it’s not really cool anymore right like their mom is buying it 93% of Americans polled say at least medical marijuana should be legal so with any hot-button issue with that much public support is only a matter of time I think there will be a lot of push and pull that will likely take us probably through the end of my term if I had to kind of put a time limit on it until then these entrepreneurs will keep working within the complicated regulation system hoping to stay afloat in the growing big business of legal weed