If you’re a baker who likes to get baked, opening a business in the edibles industry could be your foot in the door in the legal business side of marijuana. Unlike recreational pot shops and dispensaries that are starting to line the streets in places like California and Washington, there aren’t as many opening their doors to sell THC (and CBD) infused treats.
Not only is there zero competition from the black market (there’s not many pot brownie dealers out there) but as the legal weed market continues to grow there’s going to be a huge increase in demand for edible cannabis products.
It’s already happening…and Cheba Chews and gummy weed worms aren’t the only options out there. Pot’s become sophisticated and the pot brownies of yesterday are being replaced with elaborately decorated cakes (420 wedding anyone?), heady cannabis-infused dinners, and candies that would make Willy Wonka proud.
What You Need to Know
Before you break out your rolling pin, there are definitely some things you want to think about. Ask yourself the following and then decide if you want to tie the apron strings and get out your mixing bowl.
10 Questions to Ask Yourself Before You Open an Edibles Business
- What state will you base your business out of?
- What are the laws concerning edibles in the state you plan to set up shop?
- Do you want to sell recreationally, medically, or both?
- What networks will you sell your edibles through?
- How will you market your business?
- Will you have both THC and CBD infused products?
- What kind of products will you have?
- Do your items need to be refrigerated? If not, what is their expiration date?
- How will you test your products?
- Where will you bake your “baked” goods? Do you need a commercial kitchen?
A word of advice. Do your research. A business in the edibles industry can either make or break you. Find someone successful who’s gone before you and learn from them as much as you can. If you know what you’re doing when you go into it there’s definitely potential to make some serious cash off your cannabis cookies, cupcakes, and cakes.
Expenses to consider
Just how much is this edibles endeavor going to cost you? Good news is it’s cheaper than opening a dispensary, and the bad news is it’s still a cannabis business and you’re obviously going to have to put down an initial investment. If you’re not doing it all yourself, you’re also going to have to hire others to carry out some of your duties for you. Some of the costs involved include:
- Sales and Marketing
- Website and Logo Development
- Staff
- Kitchen Equipment (or commercial kitchen rental)
- Rent (or building purchase)
- Product Testing
- Packaging (child proof)
If you’re not independently wealthy, you’re going to have to get a loan. Better get to business planning if this is the case. Although most banks in the US won’t give out loans for marijuana related businesses, the people that will are going to want to see that you’ve got your shit together and you’re not just some idiot who thought they’d try their hand at a weed business. It is weed, but it is business.
With a lot of planning and a little love, opening a business in the edibles industry could turn into a seriously lucrative career. It’s just the beginning and you can bet that if you do it right your edibles business is going to boom.
Colorado Case Study
Opening an Edibles Business in Colorful Colorado
The edibles business in Colorado is certainly booming. In 2014 the state sold almost 5 million edibles, a number that’s pretty indicative of big business. If you’ve got your business plan in order and you’re ready to get your bake on, there’s a few things you need to know.
When it comes to resale of edible marijuana products, Colorado laws have gone through some changes. Edibles sold recreationaly must now have 10 or fewer milligrams of THC. The Marijuana Enforcement Division is now providing incentives for Colorado companies to produce edibles that contain 10 mg or fewer of THC by placing greater burdens on manufacturers producing products with 10-100 mg of THC. Basically, if you’re going to want to bake with weed, your products can’t contain more than 10 mg of THC per serving or you’re going to get busted out of businesses.
What this means is you’ll have to find a state licensed lab that will run tests on your products, something that is always performed with accurate results. Seeing that weed isn’t even legal at the federal level there’s been no regulations set up when it comes to testing it accurately for levels of THC. Many edible businesses in the state have found that there’s definitely discrepancies between different labs.
Another thing to keep in mind is that testing isn’t free. You’ll spend thousands of dollars getting your product tested, but it’s a necessary evil of staying on the right legal side of things. Once you’ve got your product dialed in however, is where things get even trickier and the challenge begins of introducing your product to the public.
You’ll need to find a commercial kitchen to rent that allows you to cook with marijuana on their premises, or if you’ve got the money you can buy your own kitchen. It must meet the standards for commercial use and be registered with the state as a marijuana business.
Once cooking in your commercial kitchen, you’ll need to figure out packaging for your final perfected product. With restrictions on advertising edibles, packaging your product plays a big part of how well it will sell. You better have an attractive image, but not too attractive to make it enticing to kids. Section R 1001 of the Permanent Rules Related to the Colorado Retail Marijuana Code now state that labels and packaging cannot appeal to children.
When you do it right and get passed all the necessary legalities that are involved in opening an edibles business, you’re going to find that if you’ve got a good product it’s going to sell. Research what products are popular with other Colorado companies and make something better. Baked goods are booming, but you can bet that as things progress you’ll start to see entire restaurants dedicated to serving cannabis infused dishes. Bon appetit.
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