Starting your Cannabis Business

Cannabis Industry Startup

Our premier CPA firm provides expertise in a wide range of areas within the cannabis industry. We can help you make sure your cannabis business is set up to succeed from the get-go.

Advice & Consultation

We can provide consultation and advice in a variety of subjects:

Risk & Compliance

Regulatory Compliance Solutions
Risk & Compliance Assessment & Analytical Services
Digital Risk & Compliance Assistance
Information Security Advice
HIPPA Compliant Business Solutions
Trust & Transparency
Internal Audit, Compliance & Risk Management Solutions

Finance & Operations

Financial Systems Design
Finance Effectiveness
Cash & Inventory Management
Business Process Reengineering
Internal Audit Solutions
Supply Chain Management
Strategic Planning
Operational & Performance Assessments & Improvement Services
Fraud Risk Assessments
Training

Capital Markets

Technology

Business Structuring

We can help:

Calculate the start-up costs and provide a 3-year projected income statement for emerging marijuana businesses
Provide application support assistance which includes:
- - Application project management support
  - Application writing
  - Applicant bio writing
  - Compose standard operating procedures that adhere to local and state laws
  - Write operating plans
  - Write inventory control plans
  - Write noxious odor control plans
  - Write risk mitigation plans
  - Write security plans
  - Research local & state marijuana laws (Supported states include California, Florida, Ohio, Washington, Oregon, and Michigan)

Securing Capital

Attract the right funds and additional partners for your business is vital. Investors may be intrigued by the cannabis industry, but its newness may create a level of risk that turns away funders. In addition, cannabis businesses are a bit more capital intensive than most, with estimations of $50,000-$65,000 in start-up expenses.

Debt or Equity?

Broadly speaking, there are two ways to get capital for a new business: debt and equity.

Debt
- This requires taking out a loan that you have to repay over time (usually with some interest).
- Debt lenders have a fairly straightforward application process requiring items such as a credit score, character, capacity to repay, cash flow and collateral.

Equity
- By offering equity, you’re selling a piece of the company and trading a degree of ownership for cash.
- Investors often ask for a formal pitch and want to understand your leadership team, product details, market size, and competition.
- If you show that you’ve gone through your state’s proper licensing and permit procedures, while maintaining immaculate records, your chances of working with an equity investor will increase.

Crowdfunding

Though there aren’t many traditional funding sources open to a cannabis business, crowdfunding is still an option. The SEC allows anyone to invest $2,000 in small businesses in exchange for a stake. Companies can raise up to $1 million through crowdfunding sources. Check out Fundanna, CannaFundr, and 420fundme.

Loans From Angel Investors, Private Equity Firms, or Venture Capitalists

Traditional banks often can’t offer your cannabis business a loan, but there are other investors who will invest if you can show a solid ROI (return on investment). These general rules will help your chances:

In operation for at least six months
Incorporate as an LLC, limited company or S corporation
Have a personal credit score of at least 500
No criminal record
Pass a background check
Gross monthly sales of at least $10,000 (alternately, if you’re a start-up, be able to demonstrate how your business will be able to have a certain level of monthly sales)
Have a business plan
Have a business bank account

Look for venture capital funds that are familiar with the industry. Research Privateer Holdings, which has raised more than $100M to fund legal marijuana businesses. Others include Tuatara Capital, MedMen Capital, and Snoop Dogg’s Casa Verde.

Online Business Loans

Online loan companies have an easier time lending than traditional banks. Do some research to see if an online loan company can legally extend a loan to a cannabis company (as regulations will vary by state). Online loans often have an easier application process, lower interest rates, and higher approval rates.

Personal Loans

When a cannabis company can’t get funding, some entrepreneurs take out loans through a different, non-cannabis business and then use those funds in a sub-loan to their cannabis business, when regulations allow.

Starting your Cannabis Business

Cannabis Industry Startup

Advice & Consultation

Business Structuring

Securing Capital

GreenGrowth CPAs can help you navigate the rules and regulations around securing capital for your canna-business.

States We Serve

Offices

Get in Touch Today

800-674-9050