If you are here, it means there's already much research done by you and you are almost ready for it. Did you come across those websites and articles which say you can do it with as little as $1,000? The truth is, that might be overly optimistic.
So, what are the basic boxes to check? Decide what part of the industry you want to be in. Understand the law. Create a stellar business plan which speaks about the financial projections. Get licensed and you will be all set!
First things first - Is hemp the same as marijuana?
Yes slightly, but mostly no. This is because, hemp and marijuana come from the same species of plant called “Cannabis Sativa L.” However, with hemp and marijuana, the major difference is the resin content – hemp is low resin, marijuana is high resin. Industrial hemp means the plant Cannabis Sativa L, or in fact any part of the plant, with a delta-9 tetrahydrocannabinol (THC) concentration should not more than 0.3 percent on a dry weight basis. The marijuana plant, however, has high THC levels and low CBD levels. In other words, cannabis with 0.3% or less of THC is not considered marijuana and which is why it is not federally regulated - which is not with marijuana.
What must the hemp business plan have?
You will need a great business plan because it should highlight the business opportunity to partners, investors, stakeholders, and vendors. It should also have proper dictation about the process for regulatory and licensing agencies. A good plan will have all the information on scores of subjects, and ideally, the plan starts with a business model, market-entry plan, details about products and services, market analysis, regulatory environment, your management team, ideals and milestones, financial strategy, and marketing plan.
The hugeness of the market
For the starters, it is difficult to understand the grandeur of the business. But when you are doing the research while making the hemp growers business plan, you will understand how big is the market. The US retail consumer market for hemp CBD was close to $591 million in 2018 and is projected to be somewhere near $22 billion by 2022 – a CAGR of 147%.
An overview of the hemp industry
The major part of the hemp industry is related to CBD (Cannabidiol), which is a medically-useful substance that comes with a number of benefits such as alleviate swelling, promote relaxation, and is consumable in terms of pet foods, food, and beverages. CBD can be extracted from either marijuana or hemp, however, legal CBD should be from hemp unless you are in a legal marijuana state.
There are numerous business choices and as an entrepreneur, you can opt for cultivating, harvesting, processing, extracting, distributing raw material, manufacturing consumer products, distributing and delivering, offer scientific services to genetics or testing and much more.
What is the law?
There are constant changes in the U.S. situation about the law. As of now, there are 33 states (including D.C.) that allows the distribution of medical cannabis with THC (marijuana). Also, there are 11 states (plus D.C.) which has permission for recreational cannabis with THC. The cultivation of industrial hemp (which is not more than 0.3% of THC in the biomass) is federally legal in all the states. However, marijuana is still federally illegal and is listed as Schedule 1 substance. To add to the regulatory stew, the federal legality of industrial hemp cultivation does not supersede state, county, or local regulations. Simply said, a state, county, or city can impose more restrictions than the federal government on hemp business. California, by now is the biggest cannabis market in the U.S. but has three different and potentially applicable, licenses for cannabis.