Marijuana is having a moment.
Experts recently dubbed cannabis the fastest-growing industry in the U.S. Legal weed generated $10.4 billion in the United States in 2018, and the number of "plant-touching" jobs is expected to pass 500,000 by 2022, according to New Frontier Data, a cannabis market research and data analysis firm.
Investors have taken note, pumping $10 billion into North American cannabis businesses last year — a good sign for budding entrepreneurs hoping to cash in on the green rush.
But the cannabis industry is not for the faint of heart. Everything is harder — from opening a bank account to finding office space to hiring qualified employees — says Shane Schmitt, general manager of Wy'East Oregon Gardens, a cannabis cultivation and processing facility in Portland, Oregon.
Says Schmitt, 43, a seasoned entrepreneur who previously worked in finance and construction: "There's not a playbook for an industry that people still think should be illegal."
Groups like the National Cannabis Industry Association can help you connect with people working in the space, including in crucial areas like legal support, consulting and insurance. And cannabis conferences can help you network.
These lessons from industry vets can also help you anticipate potential challenges.
Do what you know
You don't want to jump into a new venture with no relevant experience. The cannabis industry is no exception.
"People often want to run a dispensary or set up a cultivation center and I ask, "Well, have you ever done retail? Are you a farmer? Are you a botanist?" says Morgan Fox, an NCIA representative.
Instead, do what you know — whether that's accounting, public relations or plumbing — and put a cannabis spin on it.
"The thing about cannabis is you can apply it to pretty much anything," says Zac Smith, 38, founder of Traveling Hands Massage, a San Diego-based mobile massage company that uses oils infused with THC and CBD.
While Smith had nearly two decades of experience as a massage therapist, he had very little experience with making cannabis oils.
"I was making the oil myself at home. It was messy, and I realized there was no way I could keep it uniform," Smith says. So he found a guy with years of experience extracting THC and making oils to handle that aspect.
Beware the green tax
"If you're touching the plant, everything costs twice as much," says Schmitt of Wy'East Oregon Gardens. In reality, the markup can be more than double. A regulatory license with the city of Portland, Oregon, for example, is $3,500 per year for a cannabis business. That's in addition to state licensing fees, which can be as high $5,750 per year. A traditional business might pay a few hundred dollars a year.
The so-called green tax applies to actual taxes, too. Plant-touching cannabis businesses can't deduct any business expenses on their taxes, so they pay the full effective tax rate.