Before you have a chance to put a single plant in the ground — or water, if you prefer the hydroponic route — you have to write a growing operation plan that will help you secure a permit and attract funding.
Some approach the cannabis industry with wildly unrealistic expectations. Yes, the industry has grown remarkably fast over the last couple of decades. As more states adopt medical and recreational cannabis laws, more businesses get to earn profits while serving their communities.
In 2019, the legal marijuana industry was worth about $13.6 billion. The federal government still lists cannabis as a Schedule I drug — absurdly putting it on the same level as heroin — but states have started to realize they can increase tax revenues and lower law enforcement expenses through legalization. As of April 2021, 35 states and the District of Columbia have legalized medical cannabis (with 16 of those allowing recreational use).
Growth in the cannabis industry often gets compared to growth in Silicon Valley. There’s a huge difference between the two, though. The cannabis industry learned from the dot-com bubble that you cannot get terrific results by throwing money at every idea. Investors and entrepreneurs need to take calculated risks that maximize their opportunities for success.
Those calculated risks and opportunities for success are summarized and explained best in business proposals written from a serious point of view.
Over the next several sections, we will attempt to offer a guide to making a foolproof growing operation plan that you can share with government agencies, partners, and potential investors. Writing a commercial cultivation business plan takes a lot of hard work, but we’ve seen it pay off for a lot of growers.
Hire a Master Grower Who Understands Cannabis
A few decades ago, underground cannabis growers could stick seeds in the ground, provide some basic cultivation, dry their buds, and sell their merchandise on the black market. Those people made ridiculous amounts of money considering the poor quality of their flowers.
The industry has become much more professional and scientific. Today’s consumers expect to find the best products at stores and medical dispensaries.
Hiring a master grower will make it much easier for your business to meet the expectations of today’s consumers. It will also help ensure that you have a true professional on your staff. Many master growers have degrees in horticulture, agriculture, and similar areas of study. They know things like what wavelengths of light you should use during the flowering stage and what beneficial insects will eliminate an emerging pest problem.
Master growers get paid well for their skills and experience. Expect to pay at least $100,000 plus benefits. In return, you get an educated professional who cares about and understands the cannabis plant. Investing in the best person you can find will make it much more likely that your grow operation produces extraordinary flowers.
Write a Business Plan That Leads to Success
You will need to answer one basic — but critical — question before you can start researching the information that will make your growing operation plan successful. What type of commercial marijuana grower do you want to be?
For most people, this comes down to deciding whether they want to raise plants:
- Outdoors on farmland in the fresh air.
- Inside warehouses where they can control every aspect of the environment.
- In greenhouses where they can extend the growing season and keep costs reasonable.
Your choice will influence everything from your commercial grow room setup cost to how much you can earn selling wholesale cannabis flowers.
Let’s go through each option to get a better idea of the pros and cons that you should address in your growing operation plan.
Growing Cannabis Outdoors
Growing cannabis outdoors is usually your least expensive option for starting a cultivation business. There are a couple of downsides you need to consider before taking this route, though. For instance:
- You lose a lot of control over your growing environment when you use outdoor farmland.
- Your crops have more exposure to pests, animals, and people.
- Cannabis grown outdoors has a considerably lower wholesale price than cannabis grown indoors.
On the positive side, some people simply prefer flowers that were grown outdoors. By choosing to grow your cannabis on a farm, you can market your products to that audience.
It’s important to consider that some farmland comes with more features that will help you succeed. If the land you buy doesn’t already have these features, you will probably need to spend more capital improving the property.
Essential features to look for when comparing farmland include:
- Buildings where you can store your farm equipment and dry your cannabis flowers before sending them to wholesalers.
- Buildings suitable for office space and potentially living on the property for a few days at a time during busy parts of the growing season.
- Water and electricity.
- Access to a major road that makes shipping easier.
When you write a business plan for an outside grow op, you will need to include any expenses related to these features. For example, farmland that doesn’t have easy access to electricity might require solar panels and batteries. Get a quote for the equipment and installation so you can add it to your business plan. It will give licensing agencies and potential investors a more accurate idea of how much it will cost to get your company off the ground.
Finding the Right Property for Growing Cannabis Outdoors
420 Property makes it easy for you to review farmland for sale and lease so you can choose an option that helps you meet your goals.
You can also use 420 Property to connect with professionals in your area who can help you evaluate the pros and cons of available farmland. You can get started by:
- Reaching out to cannabis real estate agents.
- Hiring an environmental services expert to test soil and water quality.
- Getting quotes from contractors to learn how much it will cost to add buildings and other features to the land.
Indoor Cannabis Cultivation
Indoor cannabis cultivation has much higher startup costs than growing cannabis outdoors. In return, you get significantly more control over your growing environment and can charge higher prices for your flowers.
When you write a business plan for your indoor cannabis grow operation, you need to include the costs of:
- Leasing or buying warehouse/industrial space for your grow op.
- Commercial lighting that will encourage rapid growth.
- Irrigation systems that ensure your plants get the right amount of water.
- Substrates that provide macronutrients and micronutrients.
- Racks and shelves where your plants will grow.
- Supplies for trimming, drying, and packing your cannabis.
Most indoor grow ops find that they get the best results when they have several rooms that separate groups of plants. (This approach helps minimize the risk of disease and streamlines growing processes.)
If you need an architect to draw a blueprint that maximizes the potential of your warehouse space, you can use 420 Property’s listings to find someone in your area.
Keep in mind that your indoor grow op will use a lot of resources, including electricity and water. Estimate the amount of money you will spend on utilities so you can give your business plan an accurate estimate.
Finding the Right Property for Indoor Cannabis Cultivation
The cost of warehouse space for an indoor cannabis grow operation can vary significantly depending on factors like location, existing infrastructure, and size.
It makes sense to talk to a professional real estate appraiser before you spend money on warehouse space. That way, you will know whether the current owner has set a reasonable price.
Whether you decide to lease or purchase a warehouse probably depends on how much capital you have.
Regardless of which option you choose, 420 Property can help you explore your options. Compare listings for warehouse and industrial space for sale in your area if you want to buy a permanent location. If it makes financial sense for you to lease indoor space, compare the lease listings on 420 Property. Either way, you will get a warehouse space that fits your budget and helps you write a successful business plan.
Growing Cannabis in a Greenhouse
As far as expense goes, growing cannabis in a greenhouse gives you a happy medium between outdoor farmland and indoor grow ops. Greenhouses typically cost less to construct or lease than warehouse spaces, but you should expect to pay considerably more than you would for farmland. You also save money by avoiding the high number of inputs that indoor grow ops require. Instead of spending thousands on grow lights, your plants benefit from direct sunlight.
With that said, there are several expenses that you will need to include in your cannabis business plan when you choose to grow in a greenhouse. Some of the most important items include:
- Irrigation that ensures your plants receive the right amount of water for rapid growth.
- Heating and cooling systems so you can maintain a temperature that promotes healthy cannabis plants.
- Humidity control so you can adjust the amount of moisture in the water.
- Ventilation systems that will circulate the air and remove any fumes that could accumulate from pesticides, fertilizers, and other chemicals.
- Sturdy shelving that can support your plants as they get larger and start to flower.
Finding the Right Property for Growing Cannabis in a Greenhouse
You have three options when you start growing cannabis in a greenhouse. You can hire someone to design and build your commercial greenhouse, purchase an existing greenhouse, or lease a greenhouse owned by someone else.
If you want a greenhouse built to unique specifications, use 420 Property to compare listings from contractors. Many of them already have experience planning and building greenhouses where cannabis plants can thrive. Keep in mind, though, that you will have to purchase land in a green zone before you can build a greenhouse. 420 Property has hundreds of listings that will help you find land for sale.
If you want to start cultivating cannabis as soon as possible, you should buy or lease an existing greenhouse. After all, it will take some time for contractors to build your greenhouse and install the systems you need to grow healthy plants.
Buying a greenhouse that’s already been built means you can start growing cannabis as quickly as possible. You will, however, need enough capital to either purchase the property or qualify for a private loan. A private lender will usually fund up to 70 percent of your purchase, which means you need enough money to cover the first 30 percent.
Explore 420 Property cannabis and hemp greenhouses for sale listings to find an option that matches your budget and production needs.
Leasing a cannabis greenhouse makes it easier for you to start growing crops soon without spending nearly as much money upfront. The downside is that you will never own the greenhouse you use. The owner could also increase your monthly payments after your first year in the greenhouse. That would put you in a difficult position of either spending more money to maintain your location or spending a lot of time moving your operation to a new greenhouse.
If you decide that leasing a greenhouse is the right option for your business plan, start comparing listings on 420 Property to find options that seem like good fits for you.
Sections Every Growing Operation Plan Should Include
Most states have a limited number of permits they can give commercial marijuana growers. That makes it incredibly important for you to write a business plan that provides all the information agencies need to determine whether you have effective ideas for meeting the needs of patients and consumers. The state does not want to waste a cultivation permit on a business that will fail within a few years.
Adding the following sections will make it much easier for you to address your state licensing agency’s concerns.
Before you get to work on your cannabis business plan, know that you can find hundreds of templates online. Some of them are useful because they include sections for specific states and areas of the industry.
Whether you decide to use a cannabis business template or write a business plan from scratch, make sure you get feedback from a cannabis business consultant and a cannabis business lawyer. They can ensure that you cover all the sections your state’s agency wants to review. They can also help you make decisions that should help your business succeed. They have years of experience in the industry, so listen to their advice.
The Executive Summary
Your executive summary provides an overview of your business plan, explains how your business can contribute to gaps in the state’s cannabis industry, and outlines the steps you will take to ensure success.
Your executive summary should also include:
- The company’s mission statement
- Your current capital and plans to raise funds
- How you plan to use your capital
- Projections that show you understand emerging trends and opportunities in the industry
Ideally, your executive summary should provide everything someone needs to know about your business. You don’t want to get bogged down in the details, but you should provide enough information to support your statements.
This section should provide an overview of your business structure and plans. Cover your short-term and long-term goals, your target audience, and any staff members who have the experience to make your company successful.
Products and Services
In the Products and Services section, you should describe what types of products you plan to sell. For example, you might include descriptions of the strains you want to grow and the medical applications each strain offers.
What aspects of your local market can your business fill? In this section, you should answer this question, describe trends you see in the cannabis industry, and note any relationships you have with distributors, producers, or other cannabis companies.
Your state has rules that limit how companies can market cannabis products. Explain how you plan to grow your business without breaking those rules. You should also describe distribution logistics, how many employees you plan to hire, and the cost of running your operation.
Your financial projections section will provide any historical data you have (this mostly applies to existing cannabis businesses that want to expand) and realistic projections of how much money you can expect to generate. Provide expected costs, revenues, and profits.
Do not feel tempted to inflate any of these numbers. Writing a business plan can expose vulnerabilities. Knowing the truth of your financial situation gives you an opportunity to make adjustments to improve your chance of success.
Innovate Constantly to Stay Ahead of Competitors
The legal cannabis industry is still very new compared to most industries. That means trends can evolve quickly. For example, many cannabis consumers have decided that they do not like smoking flowers. They want to use cannabis in healthy ways to enhance their lives. Smoking doesn’t fit into that goal. Instead, they prefer edibles and other options that do not require smoking.
You can still make plenty of money selling cannabis flowers to consumers. Companies that manufacturer edibles also need cannabis flowers before they can make their products.
In addition to tracking sales within your market, you should consider reading revered publications like:
Spend some time looking over these websites and magazines so you know what your competitors are doing to stay at the industry’s forefront.
Explore Your Cannabis Real Estate Options on 420 Property
No matter what type of property you need for growing recreational and medical cannabis in California, Florida, and other states, you can explore your real estate options on 420 Property.
Find your next property today!