Cannabis Industry Business Opportunities in 2022
by Arnab Dey Business Planning & Opportunities Published on: 12 July 2022 Last Updated on: 16 October 2024
In 2021, popular drug stores, such as the Korea Town dispensary, got a few more serious competitors as the cannabis industry started expanding. Are there any opportunities for new entrepreneurs to join this growing marijuana market?
Key takeaways
- In November 2020, on ballot referendums, citizens in four American states approved the legalization of weed for personal use.
- Each state takes responsibility for the development of the cannabis market regulatory measures independently.
- At the federal level, cannabis businesses remain illegal but this doesn’t restrict them from providing their services in accordance with the laws of the local states.
- Every new entrepreneur who is going to open a cannabis store or any other marijuana-related business must follow the laws of the state, in which the business will be operating.
Where cannabis was legalized recently
Marijuana for personal use is now legal in 18 states. 11 states have special programs that allow using cannabis for recreational purposes. In November 2022, four new states joined the list of those that allow weed for personal use.
The decision was made by the citizens and ballot referendums:
- Arizona. In Arizona, the referendum took place to determine the legalization of cannabis as an adult-use product. 420,000 citizens secured the referendum by signing the petition. Experts estimate that the adult-use weed industry in Arizona state will generate $750 million annually.
- Montana. 130,000 people signed the petition that was requesting the start of the ballot referendum regarding cannabis legalization in this state. Similar to Arizona, the voters were asked to approve or decline an adult-use cannabis program. Previously, the state had legalized marijuana for medical use. This reform helped to generate an additional $45 million for the state’s budget. And now the legalization of adult-use weed will lead to a bigger increase in the industry.
- New Jersey. New Jersey state had several attempts to legalize cannabis but they failed. The successful one took place in November 2022. After the reform was implemented, the state approved the lowest sale-tax rates in the country. This step contributed to the increase in the industry’s value, which generates $1.5 billion annually. Low sales-tax rates make New Jersey an attractive place for entrepreneurs.
- South Dakota. In South Dakota, voters legalized both medical and adult-use marijuana at one referendum. This is the first case in the country where both types of cannabis were legalized by the same referendum.
Launching a new marijuana business
Today, the cannabis industry is quite big and there are a lot of cannabis business opportunities for business owners. We don’t even need to touch the ancillary business opportunities, because there are a lot of ventures for those who want to work directly with plants.
Here are the most popular avenues for entrepreneurs launching new marijuana businesses:
- Breeders. The duty of breeders is to proliferate cannabis strains and create new strains by applying the most effective techniques of selective breeding. Breeders develop seeds and then sell them to cultivators who grow the plants. Although, breeders are supposed to work on the genetics of the plants to develop the best specimens.
- Cultivators. Cultivation is a very important process that requires not only seed maintenance but also the maintenance of growing facilities and warehouses. To make the process effective, cultivators compete against each other in finding new ways to grow plants. They must apply eco-friendly, healthy, and high-quality methods to harvest the best products.
- Manufacturers. Manufacturing is the second state of cannabis production. After receiving harvests from cultivators, manufacturers have to process the plants so as to receive the ready products at the end of the process. Manufacturers might focus on specific niches such as the manufacturing of extracts, oils, edibles, and so on. The finished products must be of the proper quality to be sold in dispensaries.
- Dispensaries. Cannabis dispensaries are the stores where marijuana products are sold. Similar to manufacturers, dispensaries might focus on specific products or display the entire range of weed stuff. Dispensaries might also consult patients buying weed for specific purposes.
- Weed delivery. The described-above network cannot work efficiently without businesses that would provide transportation. Sometimes, cannabis plants should be transported in quite specific conditions. Weed delivery businesses must be able to provide those conditions.
All of the mentioned business opportunities are regulated in every state allowing cannabis for both medical and personal uses. That’s why entrepreneurs launching such businesses must require special licenses.
In every state, this process is different in terms of duration and application procedure. If you have an intention to start such a business in your state, learn about the specific regulatory rules in your state.
How the market is expected to grow in the US
Experts estimate that cannabis business opportunities are increasing in the United States. The specialists of the New Frontier Data research group predicted that by 2025, the market value of this industry will increase to $30 billion annually.
This estimation relies on the current legal status of cannabis in many states and the increasing number of recreational use programs.
According to this projection, the increasing number of citizens in different states who support cannabis legalization may soon lead to the legalization of weed at the federal level. This will be a great push for cannabis businesses. As of now, more than 30 states have legalized marijuana consumption and you can even get medical marijuana cards online in states such as Texas, Missouri, Maryland and West Virginia.
Read Also:
Related
