Utah voters shocked the rest of the country when they approved a medical cannabis proposition a few years back. State legislators then went to work crafting a medical cannabis law. Meanwhile, entrepreneurs hoping to get rich off medical cannabis discovered doing so wasn’t as easy as they thought.
Medical marijuana is no get rich scheme. It is a legitimate business in states that allow it. But as with any other business, getting an operation off the ground requires a lot. You need a significant financial investment up front, extensive knowledge in all things cannabis related, and a willingness to put in a lot of time and effort building a business from scratch.
Opening Pharmacies in Utah
If you want to know just how difficult the medical marijuana business can be, talk to pharmacy owners in Utah. The people behind Beehive Farmacy in Brigham City and Salt Lake City only got their businesses up and running in early 2021. By the time they opened their doors, Utah’s medical cannabis program had already been running for more than a year.
Utah regulators originally licensed just fourteen pharmacies. Anyone who applied for a pharmacy license had to agree to be open by June 1, 2021. Some of them cut it really close. Why? Because they struggled with all of the requirements that come with opening a medical cannabis pharmacy in Utah.
You can see something similar with Utah growers. Although the state has licensed eight growing operations, only two of them produce the vast majority of product consumed in the state. Of the other six, some are struggling to grow while others haven’t even begun operating yet.
Licensing Fees Are Substantial
Just obtaining a license in some states is extremely difficult. The big hurdle is money. Licensing fees are quite substantial for growers, processors, and retailers. Moreover, they are substantial for a reason. Regulators assess high licensing fees as one way to verify that applicants actually have the financial resources to make a go of it. They do not want to waste limited licenses on businesses that don’t have what it takes.
The other thing to note is that most states license the various players separately. So if you want to open a growing and processing operation in Utah, for example, you would need both licenses. You would need even more money up front.
Cannabis Is a Complex Plant
Starting a new medical marijuana business requires a thorough knowledge of the plant that fuels it all: cannabis. Needless to say, cannabis is a complex plant. One variety of cannabis, known as industrial hemp, contains plenty of helpful CBD but almost no THC. Marijuana is exactly the opposite.
Furthermore, CBD and THC are just two of the cannabinoids found in cannabis plants. There are literally dozens of others. You really need to know the medical aspects of most of those cannabinoids to be a grower or processor. Even pharmacy owners need at least a basic understanding.
In terms of growing, there is a lot to learn. Growing cannabis is no different than growing any other crop. There are right and wrong ways to do it. Do it the wrong way and your operation could suffer from lack of efficiency, low productivity, low quality, etc.
Whenever a new state legalizes medical marijuana, hungry entrepreneurs come out of the woodwork. They soon discover that medical marijuana is no get rich quick scheme. If you want to make money in the medical marijuana industry, you have to treat it like any other business requiring financial investment, hard work, and a willingness to learn.