Five leading states to start a new cannabis business – Marijuana Venture

California and Colorado proceed to be thrilling markets

Five states instantly come to my thoughts as one of the best locations to start a cannabis business. I’ve damaged down a number of the legalities to contemplate from every state should you’re wanting to start a cannabis business.



Although Massachusetts voters accepted a measure legalizing the leisure use of cannabis in 2016, the primary grownup-use outlets didn’t open till November 2018. As of June 17, state-licensed retailers have bought greater than $147 million of cannabis in 2019, in accordance to knowledge from the state Cannabis Control Commission.

As of June, the commonwealth had granted licenses to about 60 retailers, however fewer than 20 have been up and operating, which means there’s a lot of alternative for progress. However, many Massachusetts counties proceed to prohibit cannabis companies, which may both be a problem for business house owners who’re in search of a area or a profit if these counties ultimately open their cities to cannabis. The Cannabis Control Commission can also be discussing a timeline for supply and social consumption.

Currently, there are solely two monetary establishments that cater to cannabis shoppers, however efforts are additionally being made by state lawmakers to open up extra alternatives inside the business for banking.

The state has additionally established a social fairness program to present license alternatives to individuals from communities that have been disproportionately harmed by the War on Drugs. Considering cultivation is required to sustain with demand, a social fairness candidate wanting to get into cultivation might have a excessive probability of receiving a license to function.



Florida is behind in welcoming the cannabis business, however because the nation’s third-most populous state, the potential is large.

Currently there isn’t any authorized leisure market and particular person counties appear to be implementing legal guidelines relating to CBD in a different way throughout the state. A invoice to legalize leisure cannabis use failed earlier this yr; nevertheless, state lawmakers are planning to have a leisure marijuana invoice on the 2020 poll, so the historically conservative state could possibly be making some sluggish headway.

In the medical sector, although, Florida is seeing speedy progress in income. The state lately accredited eight further licenses, bringing the entire of licensed operators to 22, making Florida engaging to buyers because it hasn’t skilled the oversaturation seen in different states.

But regardless of the state having a medical program, Florida isn’t notably CBD-pleasant. Because native regulation enforcement businesses haven’t any method to inform the distinction between hemp-derived CBD and marijuana-derived CBD, which may additionally include THC, some individuals are nonetheless being arrested for possession or use of CBD.



Once thought-about the chief of the cannabis business, Colorado has develop into much less engaging to cannabis entrepreneurs as different states have adopted medical and leisure legal guidelines.

However, proposed possession, funding, supply and social-use reforms might reinstate Colorado as a prime choice for new cannabis entrepreneurs and buyers. On-site consumption might be authorized as early as January 2020.

Like most different states, one other interesting facet of Colorado’s cannabis business is the way it makes use of the taxes collected to assist enhance high quality of providers given to the general public. Many counties have used cannabis-related tax income to construct homeless facilities and fund schooling and scholarships. However, the flip aspect is that Colorado imposes comparatively excessive taxes on cannabis companies: a 15% excise tax on the sale of marijuana from a cultivator to a retailer, plus a 15% gross sales tax on retail gross sales to clients (up from 10% in 2017).



California has lengthy led the nation in cannabis legalization, and with the arrival of grownup-use gross sales, cannabis has turn into a prime vacationer attraction inside the state.

However, California’s authorized cannabis business has already confronted a number of challenges.

Like Colorado, California’s extreme taxes on cannabis are fueling the illicit market. Currently, growers are taxed at a fee of $9.25 per ounce of marijuana flower and $2.75 per ounce of trim, and retailers acquire a 15% excise tax from clients.

Plus, in accordance to the California State Association of Counties, 35 of the state’s 58 counties have present bans on dispensaries, and 31 counties have banned business cultivation.

Retailers have additionally confronted the potential of a provide scarcity, due to expiring cultivation licenses.

Nonetheless, analysts anticipate cannabis gross sales to attain $6-7 billion inside the subsequent few years, and there are already as many as 50 payments being drafted in Sacramento to handle banking choices and circumstances associated to packaging and logistics.



Nevada is wanting to set the bar for a way a state manages a rising cannabis business. In 2018 grownup-use and medical gross sales exceeded $550 million even, although many municipalities nonetheless ban grownup-use enterprises.

As of April 1, 2019, Nevada had 66 shops licensed to promote cannabis, in accordance to the state Department of Taxation. Nevada makes use of a aggressive scoring course of to decide who might be granted licenses.

The Las Vegas City Council voted to approve social use May 1, 2019. This invoice establishes a business license class and land use laws for social use venues, along with accompanying necessities and limitations. This will possible attraction to buyers wanting to capitalize on Las Vegas’ outstanding nightlife.


Allison Margolin is a founding companion at Margolin & Lawrence, a regulation agency specializing in California’s quickly evolving cannabis panorama. She and her companion, Raza Lawrence, are Harvard Law graduates with greater than 20 years’ mixed expertise representing and advising cannabis companies and people.


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