5 Opportunities for Entrepreneurs to Capitalize on America's New Relationship With Cannabis
The acceptance of marijuana, both as a safe recreational drug and as a substance with medicinal value, has grown across the United States. Currently, 31 states and the District of Columbia have legalized this substance at some level. In addition, nearly every state has decriminalized the possession of small amounts of pot, and the federal government is considering removing hemp from the controlled substances list.
This is great news for entrepreneurs considering a cannabis-based startup, and there are many profitable options beyond the highly regulated growing and dispensing businesses. Here are five great opportunities that offer lower risks along with great returns.
Produce CBD products.
Cannabidiol, or CBD, is the extract from cannabis that provides significant and proven medicinal benefits and comes in a variety of forms. Unlike recreational marijuana, which contains elevated levels of tetrahydrocannabinol (THC), CBD does not alter the user's mood or give him or her a “high.” What's important instead are the healthcare applications that have made CBDs acceptable to many states that ban marijuana for recreational use.
CBD consumer sales, in fact, are predicted to grow to $2.1 billion by 2021, but the experts at Medterra believe that the market will actually reach nearly $3 billion. This expectation is based on the fact that 15 states allow the sale of CBD products only -- in addition to the 31 states that allow for the sale of marijuana and CBD products.
This financial reality, combined with the fact that CBD is subject to fewer regulations than marijuana, means that manufacturing, marketing and distributing CBD products is a great business opportunity.
Consult with cannabis businesses.
While many people want to start a legal marijuana business, the many rules and regulations can make it difficult to remain on the right side of the law. Providing expert startup advice to others allows you to ride the wave of marijuana growth without risking the legal pitfalls. Currently, there are between 20,000 and 28,000 cannabis businesses in the United States, Statista reports, and this number is expected to rise sharply as state and federal laws change.
Soon, there will be thousands of people looking for practical information on starting a cannabis business, and many will pay for it. Investment, venture capital and merger and acquisition support will also be needed. In addition to how to run a startup in the cannabis industry, consulting opportunities are out there to lend assistance to companies seeking to better market and brand their products.
Whether your specialty is startups, financing, marketing or branding, you can customize your expertise to fit the right cannabis niche and build a great business.
Manufacture and/or sell cannabis accessories.
Currently, 21 percent of U.S. citizens live in a state with legalized marijuana, according to Arcview Market Research, and many of these citizens will need supplies to enjoy their legal high. Unlike the sale of marijuana or other cannabis products, you don’t need a special license to sell the accessories to those who want to partake. Given the increase in legalized marijuana, the sales of products, from bongs to vaporizers, have shifted from head shops to online stores and brick-and-mortar boutiques.
The cannabis accessory industry is expected to grow by 20 percent according to Greenlane. This increase has created a demand for higher-quality, better-looking products. Users are willing to pay for something that is durable and sophisticated, personalized or otherwise unique. This stylized demand is a great business opportunity for entrepreneurs with a creative bent.
Marijuana edibles are in high demand because they are discrete and come in a variety of doses, which can appeal to “newbies” who want to try a low-dose product. In Washington State, sales of pot-infused edibles grew 121 percent last year, according to Headset analytics. The same study found that edible sales in Colorado tripled from 2014 to 2016 and reached $53 million.
Edibles can take a variety of forms from such familiar forms as brownies, cakes and cookies to more exotic pies, chocolate bars and peanut butter. The key with edibles is to follow the rules within the state where you produce and sell them and know your target audience. Find a favorite food and try to create an edible from it or serve a niche market, such as gluten-free, sugar-free and vegan.
Support PR and event planning.
As cannabis goes mainstream, more networking events, trade shows, and PR demands will emerge, but at this point, few people specialize in this niche market. According to the digital media outlet Merry Jane, thousands of product and branding events are held around the country each year. Each event must comply with local laws, of course, and in California, the organizer must be licensed, but despite their serious side, these events are also a lot of fun.
Many gatherings include after parties and offer edibles and other products or activities that are not traditional with a typical trade show. For entrepreneurs who are organized and love to entertain on a large scale, cannabis PR and event planning could be the right business choice.
Cannabis has become a mainstream product in several states and is no longer a business run on the sly but one offered by corporations led by MBAs. This gentrification has created many legal and financially sound business opportunities for entrepreneurs with strong business skills who want to help take this industry to the next level.