By Matthew VanDerbeck, Partner at UHY
According to the Bureau of Labor Statistics, around 70 percent of small businesses fail in the first 10 years. When that small business is in the cannabis sector, the chances of failure are even higher.
As more and more states legalize cannabis for medical and recreational use, more and more entrepreneurs are looking to enter the market. Like all new businesses, though, they face tough challenges. But the nature of the product adds extra levels of complexity, not least because the regulatory landscape is incredibly variable and cannabis is still illegal at the Federal level.
What looks like an appealing opportunity-rich sector at first glance can quickly turn into a tricky area of business. It is not for everyone. But if you wish to establish or invest in a cannabis business, the following key steps will improve your chances of success.
1: Choose your state wisely. Eighteen states plus D.C. have legalized recreational cannabis use. More are in the process of formalizing detailed regulations. But that does not mean that each of these states is the right place for your business.
For most start-ups, state taxes will be a dominant factor in choosing location. While that is still true for cannabis businesses, the really key consideration is licensing. Some states like California have no limits to the number they make available – but that means intense competition and low prices. New York, however, is looking to limit the number of…
Original Author Link click here to read complete story..
By Matthew VanDerbeck, Partner at UHY
According to the Bureau of Labor Statistics, around 70 percent of small businesses fail in the first 10 years. When that small business is in the cannabis sector, the chances of failure are even higher.
As more and more states legalize cannabis for medical and recreational use, more and more entrepreneurs are looking to enter the market. Like all new businesses, though, they face tough challenges. But the nature of the product adds extra levels of complexity, not least because the regulatory landscape is incredibly variable and cannabis is still illegal at the Federal level.
What looks like an appealing opportunity-rich sector at first glance can quickly turn into a tricky area of business. It is not for everyone. But if you wish to establish or invest in a cannabis business, the following key steps will improve your chances of success.
1: Choose your state wisely. Eighteen states plus D.C. have legalized recreational cannabis use. More are in the process of formalizing detailed regulations. But that does not mean that each of these states is the right place for your business.
For most start-ups, state taxes will be a dominant factor in choosing location. While that is still true for cannabis businesses, the really key consideration is licensing. Some states like California have no limits to the number they make available – but that means intense competition and low prices. New York, however, is looking to limit the number of…
