The tremendous growth (and growth potential) of the American cannabis industry attracts many entrepreneurs. Some enjoy the challenge of building a company from the ground up, while others welcome shortcuts that may allow them to become a business owner faster.
Purchasing an existing cannabis business may seem like a solution for those who want to get straight to work dispensing or growing marijuana. An established business could bring you success, but here are a few things to consider ahead of the purchase.
Dispensaries and other marijuana businesses may legally work with federal and non-federal banks. Unfortunately, many big financial institutions refuse to partner with cannabis businesses, often due to financial liability concerns. Make sure you understand the banking difficulties you may face and put a plan in place to overcome them.
Most states, including California, require cannabis businesses to obtain one or more specific licenses. Before you buy an existing establishment, ensure that the owner has all the required licenses. If the business operates under a provisional license, find out why and ensure there are no compliance or other problems that could bar you from obtaining a permanent license.
Of course, these are just two things to consider if you are looking to buy an established and seemingly successful marijuana business. We suggest looking carefully at the operation and its business practices to identify other considerations to make ahead of your purchase.
Experienced legal guidance is wise for those with little or no prior marijuana business experience. Such guidance can help you comply with state laws and avoid missteps that might harm your new business venture.