The world of legal marijuana and hemp has proven to be one of the most profitable industries during the past few years. There are several highly profitable business models in the cannabis industry. Only a few months after Colorado legalized recreational marijuana in 2014, there were already reports of entrepreneurs making billions out of it. Consequently, cannabis enterprises in Canada were probably popping champagne bottles when prime minister Justin Trudeau announced the complete legalization of marijuana earlier this year. And it seems like they would have been absolutely justified in doing so, as the stock prices of most Canadian cannabis companies were skyrocketing throughout the year.
Cannabis is currently one of the hottest industries for entrepreneurs and freelancers. For the loyal readers of Strain Insider, I collected eight very profitable business models in the cannabis industry that could be the basis of your own future business. However, it doesn’t always have to start with a big enterprise that is producing literal tons of marijuana buds a month. There are many business models to choose from in the cannabis industry. Today I am presenting you eight of them and I will start with the smaller business types and work our way up.
Cannabis business types
1. Kick off your own cannabis blog
Although this might sound a little boring at first, running your very own cannabis blog is an excellent entry into the lucrative world of cannabis. Content marketing has been a highly effective marketing tool ever since its inception and it is responsible for traffic that amounts to multiple billions of clicks per month. In addition, the cannabis space has several benefits in regard to blogging that other industries might lack.
First of all, the legal cannabis space is still in its infancy, which comes with a very low amount of educational content, at least compared to other sectors. You have a broad range of niches that you can choose for your blog. Maybe you only want to write about the cannabis business world or just about Cannabidiol (CBD): There is basically an endless amount of categories that could be the base of your future blog.
A cannabis blog can have two major benefits for its operator. The first one would be the fact that it’s actually a great way to connect with other cannabis entrepreneurs. Maybe you are living in a country where cannabis is yet to be legalized and you want to set yourself up to become a leading cannabis company in your region. By establishing connections with cannabis businesses around the globe, you will gain a precious advantage over possible competitors. You might learn a lot about what it takes to run a successful business in the legal marijuana industry, which hurdles you can expect and which marketing tactics work best.
But even if you are not actually looking to become a passionate entrepreneur in the space, you can generate a decent income out of a cannabis-related blog, that could even earn you a considerable passive income stream in the future. As Google is clearly indicating in its trend analysis, cannabis is a term that is connected with a lot of interest in search engines. By taking part in the numerous affiliate programs of vaporizer manufactures and CBD retailers, or by running ads for various cannabis businesses, chances are high that you would be able to actually make money out of your blog. Still, as a consequence of the fact that cannabis is usually a strongly regulated sector in many jurisdictions, you should also make sure that you comply with the national legislation in order to avoid issues with the government.
2. Start a cannabis YouTube channel
YouTube channels obviously emerged as another highly profitable model in the cannabis industry during the past few years. In fact, there are already cannabis YouTubers with more than 1.5 million subscribers. The immense followerships of many video makers is no surprise to real marketing experts, as more than 51 percent of their peers named videos as the type of content with the best return on investment.
Whether it is reviewing new and exciting cannabis products, talking about the latest developments in the industry, sharing your personal experiences or plainly talking with medical patients – there are plenty of angles that could be picked as the central theme of your personal YouTube channel. Due to the fact that you can theoretically start a YouTube channel without any investment at all, it is considered an easy to launch yet profitable business model in the cannabis industry.
However, before you actually start uploading your own video content, you want to make sure what kind of channel you want to build and what consequences it might have. It appears that there is still a negative stigma connected to marijuana, no matter where in the world you are actually based. Depending on the type of content you want to produce and share, you possibly have to deal with some kind of backlash from your social environment or even the digital world. And again, make sure you comply with all the active laws in your country, or you probably will get in big trouble.
3. Sell cannabis branded merchandise
T-shirts, hoodies and snapbacks are fairly cool products to sell, as every human being on this planet eventually needs to buy new clothes — although it is a pity that not every person in the world is capable of doing so. Countless cannabis supporters across the world made sure that everyone knows how much they love this plant. This gives merchandise retailers the perfect opportunity to make a business out of it.
Selling branded clothes is also a great business model for young entrepreneurs because it gives its operator full control over its costs and scalability. You can start with creating a T-shirt design on your own and then distributing your clothes with the help of third-party services, like Spreadshirt or Teespring, without actually spending a single penny. In case your sales are doing well, or if you just want to go in big from the beginning, you can think about hiring a professional designer or purchasing big amounts of clothes from big manufacturers to sell them in your online store.
Now, if you don’t forget to also do some marketing on social networks, it definitely has the potential to become a very decent source of income. Who knows, running a merchandise business could eventually take you to running one of the most profitable businesses in the cannabis industry after a few years.
4. Run a cannabis-related e-commerce business
Talking about selling T-shirts in your native online store, you might just want to start a cannabis-focused e-commerce business as well. In fact, there are hundreds of different products that could be perfectly selling goods in your digital shop. Things you might want to consider, apart from merchandise obviously, are products that are made for cannabis use, e.g. technical gadgets that could include vaporizers, storage devices, THC scanners and many other useful things. Besides, you could also choose products that are made out of cannabis, like hemp oils, food, accessories and clothing.
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Again, keep in mind your national legislation, especially when dealing with CBD products and cannabis-containing food. Only work with trusted sources and in case of uncertainty, it is often better to stay away from shady offerings. The legal issues taken into account, there’s no reason why your online shop shouldn’t succeed in the long run. Of course, only if you don’t forget the marketing as well.
5. Craft your own products for and out of cannabis
Now it is slowly starting to get more complex. Producing your own products often takes an at least medium-sized investment in order to provide high-quality goods to your customers. In case you still want to move on with your own cannabis products, there are generally two options that you should consider.
The first path would be producing goods that are only related to cannabis. This could range from crafting your own wood pipes to building technically complex devices, such as vaporizers and quality testers. In general, it can be said that this kind of assortment is probably easier to manage in terms of regulatory aspects.
On the other hand, you could also focus on products that are actually made out of hemp or marijuana. Although you might face severe restrictions in many countries in the world, it seems to have been a very profitable business model in the cannabis industry for several years now. If marijuana is still illegal in your country, you should certainly check out its non-psychoactive mother hemp (which might be fall under prohibition as well though). The plant established itself as a superfood during the past decade and can also be used to craft clothing, oil, paper and even plastic.
6. Provide services for cannabis companies
Like many other novel industries, the cannabis sector currently has a high demand for professional services in many different areas. As long as you have a skill that is needed by a cannabis business, you have high chances of generating a decent income out of it. Moreover, new industries also come with a chance of a new start. Even if you haven’t worked as a professional in a certain business field before, you could possibly be able to start a successful business from scratch in the cannabis industry.
Services that are always needed by such industries include copywriting, public relations, social media marketing, web design, programming, growth hacking, engineering and general business consulting. If you are able to prove your skills and knowledge of the cannabis industry, it won’t take long to find clients that are willing to pay cash for your services.
Another option that comes with a great demand is to run a SaaS (software as a service) business, where you provide marijuana or CBD retailers with useful software for their online or real-world businesses. Payment solutions and logistics software would probably be particularly interesting since almost every cannabis company more or less depends on.
7. Become a cannabis retailer or dispensary in a marijuana-friendly country
You probably already expected this point and, naturally, it belongs on this list as well. Actual retailers of cannabis flowers are known for making a lot of money by selling the green gold to thousands of customers. Nonetheless, in the cannabis industry, it is undoubtedly one of the hardest businesses to participate in. Not only do you need a considerable amount of money as a starting investment, but it also inevitably comes with plenty of regulatory stumbling blocks.
Even if you manage to clear all those governmental hurdles that stand between you and your own cannabis store, you would probably still need to deal with additional governmental hurdles on a monthly basis. However, all of those troubles could be absolutely worth it when you are eventually able to sell your own cannabis to customers with a smile on your face. Possible locations would currently be Canada, Uruguay, some states in the U.S. and soon South Africa.
8. Produce marijuana or hemp on a large scale
The final milestone on your way towards becoming a true cannabis magnate is probably also the most profitable business model in the cannabis industry. With your own cannabis plantations, there’s basically no limit to how much wealth you could potentially make and I therefore consider it as the currently most profitable business model in the cannabis industry. The only thing that you would need to decide is if you want to grow hemp that is being used for the production of other goods, or if you want to grow your very own marijuana for patients and recreational use.
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While hemp production is easier to manage and has to deal with fewer regulations, growing marijuana is often more profitable due to its massive demand. Medical marijuana is becoming more and more popular, and as a consequence marijuana plantations will also become more profitable over time. As of now, the industrial growing of cannabis is already legal in half a dozen countries, and the list is continuously expanding due to new legislation in many countries.
What do you think are the best business models in the cannabis industry? Let us know in the comments!