Finding the right ways to add value to your cannabis business is essential to your profitability in the competitive marketplace. The cannabis industry is one of the fastest-growing parts of the U.S. economy. Consumer spending on cannabis and cannabis-related products exceeded $10 billion in 2018 and is expected to increase to about $22 billion by the year 2022. Getting in on the ground floor of this industry can help your company achieve the highest degree of financial stability and the greatest longevity for your business operations.
The Various Elements of the Cannabis Business
Most people perceive the cannabis industry as consisting of just two elements:
- Cultivating and harvesting of cannabis plants
- Dispensing them to consumers
- Extractors are responsible for concentrating the cannabinoids found in cannabis plants into oils and other forms that can be used by consumers more easily. CBD oil and THC oils are among the most popular configurations of these products.
- Breeders are responsible for developing new strains of cannabis by experimenting with hybridization of existing strains. This can be useful in developing higher yields and more potent cannabis plants for consumers.
- Manufacturers create edible items that make up much of the recreational cannabis market. Brownies, cookies and gummy bears are manufactured to contain specific amounts of cannabis and that tastes good to consumers.
Each of these business enterprises offers added value to the basic paradigm of cultivators and dispensaries to ensure the highest degree of profit for cannabis entrepreneurs.
Ancillary Businesses
Cultivation and dispensing or sale of cannabis products represent the two primary tasks for cannabis-related businesses. However, many other services are required to deliver cannabis products to the general marketplace. Point-of-sale processing systems, marketing, legal services, accounting and suppliers for agricultural materials are all required for cannabis-related businesses.
Land Acquisition
Purchasing properties in areas zoned for cannabis growing, manufacturing or retail dispensaries can be a solid investment in future financial stability. Not all properties are within cannabis-friendly zones. Counties and cities can establish their own cannabis zoning rules and areas. Determining whether a specific building or property is included in a cannabis-friendly zone is essential to ensure the best return on your investment in the commercial real estate marketplace.
Because cannabis is still illegal at the federal level, most traditional lending institutions will not provide funding for acquisitions intended for use in cannabis businesses. Working with alternative lenders is generally the best and most practical way to find the right loans for your cannabis-related business requirements. These financial options can help you acquire properties that could sharply appreciate as the cannabis industry continues to expand. By working with alternative commercial mortgage lenders, you can access the cash you need to establish cannabis and ancillary businesses to take advantage of the opportunities available now in the investment marketplace.
