HOW TO START A MARIJUANA GROW
Marijuana has become a major industry and many entrepreneurs want to know how they can join this growing enterprise. When people first think about joining this industry, one of the most common initial thought is to open a marijuana grow (cultivation) center.
UNDERSTANDING THE RISK
Marijuana is still classified as a Schedule 1 drug that has no medical value under federal law. Federal minimum sentencing for cultivating over 99 or 999 marijuana plants still apply. Consult a knowledgeable attorney before embarking on a career or investment in the marijuana industry. The risk is caused by the differences between federal and state laws. The gray area between the federal and state law is what creates the opportunity for entrepreneurs willing to accept the risk in an industry considered too risky for conventional big businesses.
While memos on federal policy for states with medical marijuana laws are released under one administration, those policy guidelines are not law and are subject to change under another administration. We’ve seen smash and grab raids in dispensaries by the DEA where all marijuana is removed but no charges are pressed. We’ve seen asset forfeiture letters aimed at landlords renting to dispensaries and grow centers.
Due to the scrutiny of medical marijuana businesses financial transparency and operating ‘above board’ are requirements for all medical marijuana businesses. Other important procedures include paying taxes and monitoring inventory within the secure medical marijuana dispensary or grow center. Hire the best lawyers and CPAs for legal and financial help and the best consultants for business planning and developing marijuana businesses. Remember you are representing the industry.
STEP 1: BUILDING YOUR TEAM
Build a development team, consult with a lawyer and understand the marijuana laws in your state. Some states have not allowed for medical marijuana at all. Most medical marijuana opportunities are available through a state governed program overseen by a state department related to public health. These programs begin with a highly defined request for application or proposal for interested applicants in which the applicant’s response is graded, or rated by criteria developed by the state division in charge of authorizing medical marijuana businesses. The competition is fierce in all states amongst applicants for medical marijuana business permits.
Dispensary Permits Team recommends that you build a highly qualified diverse team that may include doctors, engineers, horticulturists, administrators rich in marijuana growing experience, managers with security experience and managers with operational, zoning and financial experience in medical marijuana. The quality of your board members and employees is a major factor in first consideration by the division set to grade your organization’s ability to provide medical grade marijuana to the state’s qualifying patients. It may also be a considering factor in the case of 2 applications being tied.
Ideally the team will allow for a master editor and a director to insure all deadlines are met and the proposal comes across as if it is from one voice, even though all team members have contributed items for the application response. During this time, you’ll be running 2 businesses, one business to obtain the marijuana business permit, the other to build out the business plan if awarded a permit. Team members will have to solicit letters of recommendation from mayors, city council members, police chiefs and zoning commissioners while having the medical marijuana experience to build out the facility. Having qualified personnel is the key, as well as the team’s ability to train less experienced members.
STEP 2: FINANCIAL METRICS
Before you embark on opening a marijuana cultivation center, you should take the time to understand the financial and time requirements. It’s important to weigh your investment in time and money. If you are in position where you are well capitalized, ensure you do your due diligence when looking to hire consultants when putting together your project team as it can be very expensive.
The proof of capitalization as required in all of the medical marijuana state’s application responses is expensive, and rarely under $250,000 in proven liquid assets. Since proof of capitalization is such a high priority in these application processes it’s often used as a tiebreaker in the event of applications graded as a tie. As consultants, we recommend having much more liquid capital than the application response requires. Even experienced entrepreneurs may be torn between debt and equity. A Dispensary Permits representative can walk you through the benefits and pitfalls of each.
STEP 3: SUITABILITY OF YOUR FACILITY LOCATION
There are several factors facing any business regarding potential real estate:
- Physical Features of the Real Estate
- Zoning Issues
- Legal and Financial Considerations
- Owning vs Leasing
In most medical marijuana states, the real estate will be part of the application process. Appropriate documents citing compliance with state and local zoning requirements will be required as part of the proposal. This includes a lease, letter of intent, or if owning your real estate- proof of ownership. Consult with a lawyer, CPA and your Dispensary Permits representative on deciding the advantages and disadvantages of owning and leasing. There are greater legal ramifications in owning your own building and you don’t want to purchase a building and then not get a permit. Finding a landlord comfortable with the intended use is a hurdle for those seeking to lease property for this industry. It’s vital to be forthcoming with the landlord over the intended use of the space, you don’t want to get a permit and have issues down the road.
Your Dispensary Permits representative can assist with tips for working with brokers, getting landlord, bank and insurance approvals as well as real estate contract considerations. The distance to sensitive uses and the physical features to look for in a building are other considerations we’re poised to help you with. You need to start building a list of potential properties now.
STEP 4: BUILDING A CULTIVATION PLAN
Define the goals of the division authorizing marijuana cultivation permits and build your organization’s mission statement around that. Some states may prioritize a high-quality product for qualifying patients while another state may prioritize job creation and living wage jobs or staff diversity.
Dispensary Permits has invested heavily into producing high-quality Cultivation Plans. We’re proud of the fact that we can show entrepreneurs what their proposal will look like during an in-person meeting and entrepreneurs can preview the plans online. In the early stages of the process, each member of our client’s Board of Directors has plans they can show investors, elected officials, zoning commissions, engineers, and contractors. With that and our track record of experiences with the permit process in various states are what we consider the Dispensary Permits advantage. We deliver a guide & checklist to clients outlining all executables and deliveries, when they’re due, and who should be responsible for them.
The plans your organization considers varies from one state to another. Most states require Cultivation Plans to include the cultivation overview that includes in detail, an explanation of each stage of the plant production and supply chain process, including:
- Breeding (if applicable)
- Harvesting & Drying
The Cultivation Plan should also describe the technology and facility designed to simplify and streamline the hydroponic growing process; as well as details about quality control and testing. The state will most likely also request for general organizational business planning, financial projection planning, patient confidentiality training, record keeping with seed to sale inventory tracking plans, and security plans. A product safety testing plan should be considered even if it’s not required by the division authorizing medical marijuana business permits. All these components are eventually combined into your business plan and the response your organization provides the state’s request for proposal (RFP) or request for application (RFA). The plans are graded and ranked by the division and the organization considered to best meet the needs and demand of qualifying patients and the regulations of the division are awarded a permit or in some states, a provisional permit and the build-out of the business plan begins. Dispensary Permits partners with national and local providers of engineering, contracting, security, insurance, and other services.
LEARN MORE ABOUT OUR MARIJUNA BUSINESS PLAN TEMPLATES:
- Business Plan
- Cultivation Facility Plan
- Environmental Plan
- Financial Plan
- Fire Safety Plan
- Inventory Control Plan
- Operations Plan
- Patient Education Plan
- Patient Record Keeping Plan
- Product Safety Plan
- Security Plan
- Staffing Plan
- Suitability of Proposed Facility Plan
STEP 5: BUILD OUT THE CENTER
You’ve put sweat and money into the project and you’re just now awarded a permit, and it’s time for more work and expenditures before the organization can deliver a functioning marijuana grow center. With nationwide and local partners, the experience to staff and train as well as all the other services a start-up requires, Dispensary Permits is still here to help. The state’s process starts with a large number of prospects. Finally, the applicants are narrowed down and awarded permits. You are representing the industry now, a dream held by many, but awarded to very few.
SPEAK WITH A CULTIVATION CONSULTANT
Learn about cannabis cultivation from a seasoned expert, Bryce Skalla. As President of Item 9 Labs Corp, Bryce Skalla manages the Company’s day-to-day business operations. Prior to the Airware merger, Mr. Skalla was the co-founder & CEO of Item 9 Labs. As one of the founders and architects of Item 9’s business model, Mr. Skalla was instrumental in establishing Item 9 Labs as one of Arizona’s leading cannabis consulting companies and producers of high quality medical marijuana flower and products over the course of three years. During that period, he designed, developed, and capitalized on strategic opportunities, taking Item 9 from a 1,000 square-foot Caregiver Cultivation warehouse into the highly regulated Arizona Medical Marijuana industry with fifty acres zoned for cultivation. Purchase an Hour Consultation with Bryce Skalla here.
Learn How To Start A Marijuana Grow with this step by step from Dispensary Permits Consulting. Marijuana has become a major industry and many entrepreneurs want to know how they can join this growing enterprise. When people first think about joining this industry, most think of…
How to Get Hired to Work in the Legal Cannabis Industry Part 3: Getting Hired as a Grower
This series was written by Trevor Smith, a marijuana industry veteran with years of experience running a state-licensed seed-to-sale cannabis operation. Having recognized a growing need to attract great talent to the cannabis industry, Trevor has developed position-specific approaches to help those who are interested in employment opportunities within the rapidly growing cannabis industry. These articles are designed to offer guidance for those who are looking for work in the legal cannabis industry but are unsure of how to get started. Part 1 offered general interviewing advice, while Part 2 covered tips on getting a job as a budtender. Part 3 addresses how to get hired as a cannabis grower.
So You Want to Be a Legal Cannabis Grower
Growers are a unique breed, and the best of the bunch are passionate about their garden, highly dependable, and thrive on exposure to new and different horticulture techniques. The grower role is often the most covert position in medical cannabis because their processes are considered trade secrets, and rightfully so — successfully cultivating cannabis on a large scale is no simple task. There are dozens of factors that have to be perfectly controlled over the approximately 90 day growing cycle. If the environmental controls or nutrient schedule fail for even just a few hours, the entire harvest will be negatively impacted, and in some cases completely lost.
If you’re interested in becoming a grower, know that you have to be experienced, patient, organized, and thorough. The following steps should help improve your chances of getting hired by a cultivation center.
Step 1: Be Humble
A master grower is someone who has several years of experience running commercial scale gardens. Even though you may have an intermediate to advanced understanding of horticulture and have had previous success in your gardens, be wary of describing yourself as a “master” grower as potential employers will be skeptical of that term. Instead of getting caught up in vanity titles, you should focus on showing your horticulture education and experience, your desire to improve your craft, and your willingness to be part of the team.
Avoid making the following statements:
- The plants you grow are “the best” and “would win any competition.”
- Your system is “the only way to do it right” and “change isn’t an option.”
- All other growers “must not know what they’re doing,” and “that’s why they suck.”
Instead, focus on these talking points:
- You’re proud of your “past results,” but you’re even more excited to “get better” and continue to improve your growing knowledge and skills.
- Ask what system the organization is currently using and what has worked well for them.
- Stress how teamwork is critical to the success of any garden.
- Share any resources you’ve found to be especially helpful, but be open to additional tips from your potential future colleagues.
Step 2: Know the Horticulture Basics
If you haven’t already picked up some of the best-selling industry books by reputable authors like Ed Rosenthal & Jorge Cervantes, it’s no longer optional. Every successful grower I’ve met has read multiple books on cannabis cultivation, sometimes dozens, and treats them like a bible.
Your research should cover things like:
- The three phases of growing: seed/clone, vegetation, and flowering
- Environmental controls such as lighting, ventilation, watering, and temperature
- Plant nutrition, proper pH levels, and pest control
There is no “universal best way to grow,” so try to get exposure to as many different mediums and techniques as possible. Other important topics to be familiar with include:
- How to identify pests and plagues (especially spider mites, white flies, and powdery mildew)
- Information about pesticides, such as what makes them safe vs. unsafe?
- How to properly harvest and cure cannabis
I highly recommend having your own personal garden before attempting to get your first professional grower position. If you’re legally able to, practice growing your own cannabis at home. Otherwise, start cultivating similar crops like tomatoes, onions, basil, or peppers. While a personal garden of any variety won’t fully prepare you to cultivate cannabis in a commercial, regulated scale, it will allow you to make your beginner mistakes without damaging your professional reputation.
Step 3: Fight for That First Interview
There likely won’t be any shortcuts for the time and effort needed to get that first interview. Shop around at all of the dispensaries that you can — it won’t be difficult to see who has a really strong grower and who has an average or below average one. Focus your efforts on connecting with the growers who are producing products that you admire. Your goal is to network your way into an interview with the current growers, and that process might start with a budtender’s recommendation.
Most cultivation centers are highly secretive and selective with whom they invite into their facility. If the organization is vertically integrated (meaning they both grow and dispense), you will probably also be competing with a large number of current budtenders who want to move up to becoming a grower themselves. The grow operation doing the hiring probably already knows a large number of these budtenders, especially if they already work within the organization. Because you are an outsider, your best bet is to attend as many local events as possible and network with people at your targeted operation. Start to become a friendly face so you can build trust between yourself and the company you want to join.
It will take time for people to get to know you and be comfortable discussing your interests, so be patient with this process. I would expect this step to take at least 90 days from when you start seriously looking for a growing job. As the old saying goes, anything worth doing isn’t easy. Once you finally get that interview, be ready to impress by being humble, knowledgeable, and eager to take direction.
Step 4: Be Ready to Work
What you may not realize is that most growers are on-call 24/7. If there is a light switch failure at 2:00 am on Sunday morning, you may be the one who has to immediately go fix it before it damages the harvest. If you miss the alarm or phone call because you’re “recovering from an epic night,” you likely won’t have your grower title too much longer.
The day-to-day responsibilities of a grower are anything but glamorous. You’ll spend most of your days feeding, watering, and monitoring the health of the plants. Many of the techniques are repetitive in nature, so if you get bored easily you’ll want to look elsewhere. Having a background in in other disciplines should help diversify your day somewhat, plus it’ll make you a more appealing hiring prospect. For example, experience in construction will come in handy as the cultivation equipment inevitably degrades or breaks.
Not Ready to Grow? Try Working as a Trimmer First
Trimmers are very fundamental parts of the cultivation cycle. Those perfectly manicured buds the dispensary covets most can’t happen without a skilled trimmer delicately removing the unwanted materials.
One downside is the trimmer role is even more repetitive and narrowly focused than a grower, but you will get incredible exposure to the buds and the people at the cultivation center. This may be the ‘first big break’ you need to get your medical cannabis career launched, so don’t be afraid to ask if this position is open, especially if the grower roles have already been filled.
Looking for people who can help grow your business in addition to hires that can grow your product? Leafly can help! Learn more about the different ways we can boost your business.
This series is designed to offer guidance for those who are looking for work in the legal cannabis industry. Part 3 covers how to get hired as a cannabis grower.