Procedures Involved in a Marijuana Business

close up of the buds on a small cannabis plant growing outdoors under bright sunshine
Marijuana is grown in the ground in plain fields, then cultivated and distributed around the world. Those who wish to purchase and consume the plant go to dispensaries who have a legal license to provide the plant in a controlled environment. If you are thinking of starting a business in the marijuana industry, the first step is to get a legal license and start the cultivation process. 

The Cultivation Process

The requirements for the cultivation process are as follows.

  • Land where farmers can grow and take care of the marijuana plant
  • Financial plans
  • Transportation vehicles and legal documentation clarifying that you are allowed to cultivate and transport cannabis within the state, country, and/or worldwide depending on the scale you operate

Where do dispensaries get the plant? The cultivation of marijuana is not an easy process due to the legal and geographical limitation issues related to it. The process of cultivation requires permission from the government, social acceptance, cultivation-favorable geographical requirements, and a big area of land where the plant can be grown and taken care of.

Dispensaries get the marijuana from farmers who grow the plant, local dealers, and, some even get it from illegal sources.  In countries and states where marijuana is legal, the process of cultivation starts with getting a permit from the government. These certificates are provided to dispensaries for specific purposes only. A valid reason has to be given to prove that the marijuana will be used solely for medical purposes and sold only to those who have verification from their doctor. Decide whether you would like to open your own dispensary or only cultivate and provide the plant to other dispensaries.

Transportation of the Plant

Once the government has allowed cultivation of the plant, the next big step is the transportation of the cultivated plant from the farm where it has been grown to the dispensary or storage area. This carries a high risk of theft from local dealers who illegally deal in marijuana. Alongside, the transportation has to be cleared by legal authorities to ensure that the transportation process is safe. Therefore, most cultivators seek official permission from the government in which either the authorities are informed or a certificate allowing the transportation of the psychoactive substance is granted.

Once the cultivated plant is successfully transported, it is ready to be sold. The records of how much marijuana is cultivated, sold or destroyed in any way is all kept in bookkeeping records of the dispensary.

The Legalization of Marijuana

Along with the legalization of medicinal use of marijuana, some states and countries have legalized the use of cannabis for recreational purposes as well. State laws define who can cultivate marijuana and who will be dealing in it. These laws may vary from state to state. For example, the law in Alaska will permit both recreational and medicinal use of marijuana along with providing documents which will allow cultivation. On the other hand, the law in Arizona defines that marijuana can only be used for medicinal purposes and only registered dispensaries will be able to cultivate the plant.

Therefore, anyone who is looking to start a business related to the cultivation of marijuana for medical purposes will have to keep a keen check on the laws of the area they are starting the business in. Often, the things that you will have to consider before starting a marijuana cultivation business are:

  • Rules, Laws and Regulations
  • Financial requirements
  • Management requirements
  • Application fee and laws where you are starting your business

Check out America's Best Bookkeepers

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.