Cannabis is a tricky business.
States have been legalizing medical and recreational marijuana at a steady rate since the 1990s and Canada just became the 2nd nation (next to Uruguay) to allow legal consumption of recreational marijuana. Will the U.S. become the 3rd such potential market? Either way, growing a cannabis business is still more challenging than running your typical mom and pop shop so let’s take a look at the opportunity here at home.
Medical marijuana is legal in 29 states and Washington D.C., and recreational marijuana is legal in eight states and D.C. By the end of 2017, the legal cannabis market is expected to be worth $7.9 billion; by 2025, that number jumps to $24 billion. (New Frontier Data)
This thriving market is showing some substantial economic benefits.
It’s predicted that state tax revenue from cannabis retail sales to total $745 million in 2017 and $2.3 billion in 2020. The company also estimates that if medical cannabis were available nationally, taxpayers would save $220 million in medicare expenses. (New Frontier Data)
The average medical marijuana consumer purchases cannabis every 10 days and spends $136 per transaction. The average recreational marijuana consumer purchases cannabis every 14 days and spends $49 per transaction. Most cannabis consumers are part of the younger generation, but that majority is getting slimmer: 41% are 21 to 35-year olds, while 26% are 36 to 45, 16% are 46 to 55, and 17% are 56 or older. Men make up 53% of cannabis consumers, but women aren’t far behind at 47%.
Though profits and social acceptance are expanding across the country, federal regulations pose a few unique challenges to the emerging cannabis industry.
Marijuana is still illegal at the federal level, and that means no sales outside legalized states or shipments across state lines. Andthe pool of viable locations shrinks even further as some states offer better storefront opportunities than others.
Two of the best states to start a cannabis business are Colorado and California. Colorado’s licensing laws are so open that Denver boasts twice as many cannabis dispensaries as it does Starbucks. California is predicted to have recreational cannabis businesses licenses available in 2018, opening the way for a variety of dispensaries, cafes, and restaurants.
A couple of the worst states for business? New York, with its harsh regulations and highly competitive licensing, and Minnesota, which only allows eight dispensaries in the state.
Banking & Credit Unions
Banks and credit unions don’t quite know what to do about cannabis businesses.
The Obama administration allowed financial institutions to cater to cannabis businesses with several provisions. The Financial Crimes Enforcement Network (FinCEN) provides detailed guidelines for financial institutions interacting with marijuana businesses. Financial institutions are required to keep an eye on business’s commercial activities and file quarterly Suspicious Activity Reports (SARs).
The added cost of adhering to these extra rules is often transferred to the cannabis business itself—most marijuana business have to pay a financial premium just to open a bank account.
In many cases, financial institutions simply refuse to cater to marijuana businesses when the legal climate is so uncertain, forcing cannabis businesses to operate entirely through cash.
In 2017, just 368 U.S. banks and credit unions served cannabis businesses. This is up from 300 at the start of 2016, but still only a fraction of the 12,000 financial institutions in the U.S.
Even this much progress in the financial system could slow or halt, however, with new challenges to the lenient enforcement practices that were the norm during President Obama’s administration.
Legal and Political Changes
On January 4, 2018, Attorney General Jeff Sessions rescinded Obama-era memos that assured cannabis businesses they would not be subject to federal prosecution as long as they followed their state’s laws. This move caused panic and uncertainty throughout the cannabis industry.
However, don’t think Sessions’ move means Justice Department agents are going to come kicking down your doors. There are plenty of reasons this latest legal threat is unlikely to end the marijuana industry.
Firstly, medical marijuana users should be safe.
Since 2014, Congress has included a policy in the spending bill to prevent the Justice Department from prosecuting users in states where medical marijuana has been legalized.
Recreational cannabis might not be dramatically affected, either. By rescinding the memos, Sessions is merely giving federal attorneys the option to prosecute in their states; no law is requiring prosecution. And according to the Washington Post, several of the 13 U.S. attorneys in the the eight states where recreational pot is legal have said they will only prosecute if a cannabis business has ties to crime or violence.
The change was also met with bipartisan condemnation from Congress, with both Democrats and Republicans claiming Sessions’ decision goes against states’ rights.
Despite these unique challenges to the industry, careers in cannabis look promising. 97% of recreational cannabis stores and 94% of medical cannabis stores make a profit or break even. The cannabis market is set to create almost 300,000 jobs by 2020—more than the projected job growth for Transportation and Warehousing, Mining, and Manufacturing.
Women in particular are benefiting from the booming cannabis business. The portion of women executives in the cannabis industry is 27%; that’s 4% higher than the national average of 23%.
In a survey of cannabis business employees, 30% said the company they worked for was owned entirely by women, while 57% said their company was at least half owned by women.
Before you get in on the action, it’s important to do your research and know what kinds of jobs are available in the industry. On the retail side of the business, there’s need for store managers, cannabis sales reps, and dispensary owners. Other important jobs allow you to get your hands dirty, such as grow masters, extraction technicians, and bud trimmers. With an increasing amount of cannabis restaurants and cafes, edibles chefs are also in high demand. There are also a number of Cannabis degrees, courses and certifications you can take to up your skills. Note: We highly recommend a degree in business administration or if you’re short on time, you might consider choosing an accredited Online MBA degree to truly stand out among other job candidates. Another popular option includes free business courses online to polish up on your skills or simply a self paced online college course.
Other degree programs you might consider include: Operations Management Degree, Supply Chain Management Degree, Risk Management Degree, Retail Management Degree, Information Systems Degree, and of course, a Business Administration Degree.
Cannabis can be a tricky business—but it’s also full of opportunity. Some of the top jobs that you can look for in the marijuana industry today include:
- Store manager: Retailers in the legal cannabis field need good managers just like any other retail business. Store managers in the cannabis trade can earn a good living, with some making in the range of $75,000 per year. For those who work for larger stores, you may enjoy benefits and vacation time, too. Many managers of top performing stores get bonuses on top of their salary.
- Sales representative: Sales professionals in the cannabis industry visit retail stores and dispensaries and develop business relationships with growers. It is very important to be knowledgeable about the entire cannabis industry, including the products and all regulations that are relevant to your state. A good deal of your salary will likely come from commissions. Note that there are regulations regarding advertising cannabis products on online networks, in print and on broadcasts.
- Owner of a dispensary: This differs markedly from the job of a store manager. Dispensaries work in places where cannabis is legal for medical reasons, but not for recreational use. Owners have to be up to date of relevant regulations and obey them carefully. Some dispensary owners may earn $100,000 per year if their dispensary is profitable.
- Grow masters: These professionals are responsible for growing various strains of marijuana plants that will be sold to clients later. The top grow masters are in great demand and can command salaries of $100,000 per year.
- Extraction technician: Most people believe that marijuana exists only as a plant, but marijuana extracts are growing in popularity; they can amount to up to 40% of the sales in some retailers. Many professionals in this field have Ph.D.s and can earn between $75,000 and $100,000 per year. This job is growing because some states frown upon people smoking cannabis and only make it available for medical uses as an extract.
- Chefs: A marijuana edible chef is involved in activities that go beyond mere cooking. Their work focuses on the masterful infusion of marijuana concentrate into various foods in certain doses for measured, safe and legal consumption. Depending upon the business, edibles chefs may earn a salary of $50,000 to $100,000 per year.
- Entrepreneur: The legality of cannabis in many states is helping to launch many entrepreneurs of all stripes. Some of the businesses that are growing around legalized marijuana are bed and breakfasts, painting classes, florists, cannabis-themed bike tours, medical marijuana delivery service, cannabis business consulting, and cannabis extraction processing laboratory equipment sales.
See more about the Best Marijuana Cannabis Jobs & Careers
We interviewed some key Cannabis experts and got their opinions about the state of the business.
“For years, Cannabis was taboo, being discussed only in private groups among trusted peers. Today, Cannabis has stepped out of the shadows and into the light. Discussions have moved from privacy to political debate, and more importantly to the family dinner table. Cannabis culture is not undergoing a revolution; it’s a peaceful evolution.” – Bob Ronalter, CEO Classy Joints Classyjoints.co
“2018 will likely see more U.S. states pass medical and recreational cannabis law, as the taboo surrounding cannabis culture diminishes and we enter into the beginning of the end of marijuana prohibition. In terms of price, that means more competition among dispensaries and, in general, falling costs on cannabis and cannabis-related products.”– Mitch Strohm, Co-founder, MarijuanaRates.com
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