The Ultimate Guide to Building a Scalable Cannabis Business

Due to the more relaxed laws and better information about its healthcare applications, cannabis is quickly becoming one of the essential consumer goods in the world.

This means that there has never been a better time than now to become a cannabis entrepreneur. However, there are a few things you need to know right from the start if you want a successful enterprise over the long term. 

One of these is scalability. You must ensure that your business has room to grow, even if you start with limited production.

Here, we provide all the information you need to take your cannabis business from a startup to a significant industry player.

Image courtesy of Unsplash.
Image courtesy of Unsplash.


Marketing is perhaps the most crucial consideration when it comes to the scalability of any business.

If you can’t let people know about your business and what products you have available, you’ll never be able to expand.

Luckily, online marketing has made it much easier for businesses to develop a well-known brand without initially investing a lot of money. Below are two of the essential online marketing tools.


Search engine optimization (SEO) is quickly becoming a staple of every online marketer’s playbook. It involves writing web content in such a way that it achieves a higher ranking on search engines, thereby reaching more readers.

You can execute SEO using keywords in the right places, including external links to high-authority pages to show that your content is reliable, and by optimizing your meta descriptions and titles.

White label link building packages can also help boost your SEO.

Social Media

While there are some restrictions on cannabis advertisements on social media, social platforms remain the most cost-effective way to market products. 

Social media is especially useful for visual content. If, for example, you’re trying to advertise a new cannabis strain with a high trichome content or particularly vivid colors, an Instagram post is the way to go.

Regulatory Issues

Even in places where cannabis is legal or decriminalized, regulations remain an important consideration. Most areas impose strict licensing requirements for growers and sellers, and failure to comply with these can lead to hefty fines or even the enforced closure of your operation.

You’ll also have to keep taxes in mind, as the approach to cannabis taxation varies widely from state to state. While some areas impose sales tax on marijuana like any other goods, others have specific cannabis taxes that apply at different stages of the chain of production. 

Photo by Sharon McCutcheon on Unsplash.
Photo by Sharon McCutcheon on Unsplash.


Unless you have a significant amount of capital to invest in your cannabis startup, you’re probably going to need a form of external financing. Whether to buy premises and equipment or fund an operational expansion, almost all successful cannabis businesses have had to look for financial backing at some point.

There are two broad types of financing that any business can access.

Debt Financing

This is where you borrow money to be paid back with interest. Most businesses borrow money from banks, although smaller amounts are available from a credit union at lower interest rates.

Borrowers with poor credit ratings often turn to alternative debt financing options, such as online lenders. These companies charge very high-interest rates, so you should only turn to them as a last resort.

Equity Financing

This type of financing requires you to sell a stake in your business. In return for a cash sum, you must turn over a percentage of your earnings to an investor.

The advantage of equity financing is that the investor bears the risk. If your business fails, you won’t be left with a debt to repay a lender.

However, if your venture succeeds, you’ll have to sacrifice a percentage of your earnings to your shareholders, unless you can buy them out.

Photo by Esteban Lopez on Unsplash.
Photo by Esteban Lopez on Unsplash.

Operational Facilities

The nature of your operational facilities will vary depending on the type of cannabis business you’re starting.

Growing Cannabis

If you’re a grower, the first thing you’ll need is a plot of land. Small growing operations don’t require much space, but if you have ambitions to expand, you should buy a more substantial plot than you need during the startup. 

You’ll also have to consider growing equipment.

Most top-shelf cannabis nowadays is grown indoors; if you choose this method, you’ll need grow tents, pots, humidifiers and dehumidifiers, thermometers, fans, special lights, and plant food.

Growing outdoors doesn’t require too much of an investment in equipment, but there may be a compromise in the amount of work required to grow in an unpredictable environment.

Cannabis Retail

While online cannabis stores are becoming more common, restrictions on cannabis marketing can make it challenging to scale up.

There are also regulatory issues to manage if you want to mail cannabis from one place to another, especially across state lines. Besides, many cannabis connoisseurs prefer to see and smell their weed in person before buying it.

Therefore, while the startup costs associated with cannabis delivery are negligible, it isn’t the right choice for everyone.

Physical stores are prevalent in many areas that have decriminalized cannabis. If you want to set up as a cannabis retailer, you won’t need much other than premises, licenses, and stock. If your store becomes successful and you develop a well-known brand, you could potentially open up at another location. 

Getting Ahead as a Cannabis Entrepreneur in 2020

As you can see, a lot of work goes into building a profitable marijuana business. If you want to lay the foundations for a large enterprise, you need to make the right decisions from the start of your journey.

The factors we’ve looked at above are the most important to remember when your business starts to grow.

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