You probably have decided that you are ready to create your own cannabis business. The good thing about this is that if done correctly it is almost guaranteed success. But with all the laws and regulations regarding this business, how do you know what you need in order to just even start? We are going to walk you through all of the steps needed to start your own cannabis business.
When creating a business the two most important things are having a plan and having funding. You cannot start a business without either. You should adapt your business plan around funding. How much are you going to need to get this business off the ground? Usually to start a cannabis business you are going to need at least and this is the very minimum. $100,000 yes that is what you are going to need to start up, but you also want to make sure that you are covered for a few months in case the opening of your business is slow. Remember that you still need to pay your employees, as well as pay your bills. You also are going to need to pay for all licensing and rent for your building.
So now that you have your business plan together you need to get all of the required licenses to even start your business. The FDA still regulates all cannabis sales. You need to keep track of all of your licenses for your business. Not having a correct license or having an expired license can result in your business getting shut down, or receiving a huge fine. And no one wants that.
Once you have all of your licenses you are ready for the funding part of your business. You are going to want to look for a lender that specializes in California cannabis business loans. Because this business is still new and still somewhat heavily watched by the government some lenders and banks will not approve you for a cannabis business loan. When applying for a loan you are going to want to take certain information with you.
- Business plan- Your lender is going to want to see your business plan to make sure that it is a strong business plan that can be successful. We recommend that you write out your business plan and allow an attorney to look over it to ensure that it is solid and that you do not have any loopholes.
- Credit check- A credit check is going to be a big decision rather you get approved or not. Lenders want to make sure that you have good credit and have paid your bills and credit cards on time. On average Lenders like to see at least a 700 credit score. Which is a very healthy score. If your credit is not great you might look at having someone cosign for you on your loan. Just make sure that they know that just because they cosigned does not give them any rights to your business unless you have an agreement with them over that.
- Bank statements- Your lender is going to want to make sure that you have money coming in. Especially because some businesses do not succeed, you are still on the hook to pay back that loan regardless of the success of your business. It is smart to have between six months to one year of bank statements.
- All required licenses- You are going to need all your required licenses from the state saying that you can operate a cannabis business. Not having all the requirements may lead to you getting denied.
So now it’s time to go get funding for your new venture. Remember this process does not have to be difficult. We urge you to keep up with all laws and regulations.