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Starting a small business – Marijuana

December 1, 2012

A few more states legalized possession of marijuana.  Check out this map – I can’t verify the information.  But it looks like legalization is gaining momentum.  Does this mean that you could start a marijuana business?

Farming sucks.  You need arable land, water, seed, fertilization, a strong back, hanging barns and security.  (I’m basing this on local knowledge of tobacco farms.)  You need to know what you’re doing and do it everyday.  Once, you grow it, how would you distribute it – straight to consumers, through dispensaries, etc?  Farming sucks – 20 hours a day of work and you can’t tell anyone about it.

Manufacture supplies and peripherals?  Do you know anything about making paper, blowing glass or making pottery?  It might not be enough to make a profitable go.  You’ll find too much competition on paper unless you can make organic, bleach free, etc paper.  How will you distribute the products?  Potentially, you could start a web based store for peripherals but you’ll find lots of competition.

Regulation will eventually kill you.  Shortly after legalization will come regulation.  (If it makes money, tax it.  If it keeps making money, regulate it.)  We have a huge, permanent bureaucracy in this country that is always looking to expand.  Do you think the FDA and ATFE and related agencies won’t get involved?  Do you want to compete against Pfizer or Monsanto (probably not)?

How about downstream?  Could there be pot specific munchies that you can make and distribute, especially with Hostess’ demise.  How about providing a safe place for people to consume their product?  You could teach how-to classes for wannabes and newbies.

I don’t see it as a winner unless you find a niche.  As it becomes more mainstream, the Big Boys will enter and crush you.  Good luck.

 

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