• Cost (including security, rent, utilities, licenses, and payroll)
• Residency requirements (most states require marijuana business operators to have residency in the state)
• Criminal record (drug felons are barred from starting marijuana businesses in most cases)
• Appetite for risk
• Timing (you may have to wait several months for your license to be approved)
• Investors and partners (funding a marijuana business can be tricky)

Besides the often-protracted licensing process, constantly changing laws, and limited funding options, the fundamentals of a marijuana business are not much different than for other industries. You will need to write a business plan, find a location, form your business structure, contract with partners, and promote your business.

State and Federal Marijuana Laws

It cannot be overstated that marijuana is still considered illegal under federal law, although the Department of Justice has generally had a hands-off approach to state medical and recreational marijuana initiatives. Basically, marijuana business owners who follow the laws of their state and local government are unlikely to face federal drug charges.

But this conflict with federal law still presents many hurdles. For instance, nationally chartered banks insured by FDIC typically will not do business with marijuana-based operations, since it is seen as too high-risk in the current regulatory environment. Banks themselves may be concerned about being charged with money laundering or other crimes just by providing loans or banking services (although, as noted earlier, the DOJ has largely left states alone).

Also, each state that allows some form of legal marijuana use has fairly unique laws and regulations. For example, Connecticut allows only 10 state-sponsored dispensaries to operate throughout the state, which may not be located within 1,000 feet of a school, place of worship, playground, park, or childcare facility. Colorado, which allows the recreational use of marijuana, has three separate licenses that authorize either the cultivation, manufacture of infused products, or retail sales.

Getting Legal Help When Starting a Marijuana Business

It's often a good idea to consult with an attorney before starting any business. Since the marijuana industry is even more legally complex and confusing, using the services of an attorney is even more crucial. In fact, there are individual attorneys and entire firms dedicated to the legal marijuana industry. A lawyer can help you comply with the various laws and regulations of your state, giving you peace of mind in a complex industry.

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