Starting any business is challenging, but the road ahead gets even harder when it’s a cannabis business.
Before starting your marijuana business, you’ve got to cross several hurdles like getting the required licenses and permits, securing funding, and more. This handy guide explains everything you need to know about starting a weed farm.
A Step-by-Step Guide on How To Start a Weed Farm
1. Create a Business Plan
Before you begin writing the business plan, make sure you’re following all laws in your state for running a commercial weed farm. It’s a good idea to keep the business plan flexible so that you can change it as laws evolve. Here are a few things to include in your cannabis business starter kit:
- How you plan to make your business stand out from your competitors
- Marketing strategies and plans to attract customers
- The location of the farm and your business headquarters
- Farming method: indoor, outdoor, traditional, vertical, or hydroponic
- Weed strains that you plan to cultivate
The more detailed the business plan is, the easier it is to begin down the line.
2. Choose a Name and Register Your Business
The next step is to choose a name for your weed farm. Do a state-level search to check if your chosen name is available. If yes, you can pay a small fee to get it registered for your business.
Another crucial factor is to select the business entity type. Keep in mind that different business entities have varying taxation and licensing requirements. Learn the pros and cons of different business types like a limited liability company (LLC) or corporation, and choose the one that suits your budget and plan.
3. Obtain the Required Licenses
Every state has varying laws around weed farms, so licenses, permits, and registration are different depending on where you live. You can apply for licenses on your own or with the help of an authorized legal professional in your state. They can help you with the licensing, registration, and compliance requirements.
Besides marijuana-specific licenses, you also have to deal with other small business requirements like paying taxes, bookkeeping, accounting, registering employees, etc. Make sure to apply for the employer identification number (EID) online directly at the IRS website and get it sorted before commencing operations.
4. Apply for Cannabis Funding
Just like every other small business, running a weed farm requires capital. Here is a quick checklist of the basics for weed farming:
- Cannabis seeds like photoperiodic, feminized, and auto-flowering seeds
- Lights for growing cannabis such as CFL, HID, LED
- Ventilation equipment
- Containers for weed plants
- Growing medium
- Nutrients for the soil, plants
- Pesticides, herbicides, and rodenticides
- Farming equipment
- Labor costs
With several types of equipment to invest in, you might not be able to handle all these costs yourself. This is another reason why you need a thorough business plan. A detailed business plan with timelines, goals, and objectives increases your chances of securing a cannabis loan.
Big banks and financial institutions do not offer loans to cannabis businesses, as cannabis remains a Schedule I drug under federal law. This limits your scope of securing funding. Fortunately, alternative lenders like Bespoke Financial have filled in the funding gaps for marijuana business owners.
Plan for Success
Considering the complications of the cannabis industry, potential weed farmers should spend extra time doing their research and understanding the nuances and intricacies of the field before getting started. The best way to ensure success is to preplan everything and start operations with proper funding.
If you are looking for financing to start or develop your weed farm, explore the various marijuana funding options from Bespoke Financial. With flexible financing and quick funding, Bespoke makes it easy for aspiring cannabis entrepreneurs to secure funding when traditional bank loans are unavailable.