The Business Behind Cultivating Marijuana For Medical Purposes

Close-up of four medical marijuana prescription containers. One opened container is in the foreground with cannabis bud falling out.
Marijuana is a psychoactive substance that is widely used around the world for various purposes. Some enjoy the ecstatic feelings and high while some utilize it for medical purposes. Despite how socially acceptable the plant is, it is still illegal in many countries and most governments do not plan on legalizing it anytime soon. Although, the use of the plant has never decreased. Instead, people around the world are continuing to use it more and more for various purposes and are taking steps to make it legal around the world.

The Marijuana Industry

Marijuana, also known as cannabis, has an extensive business industry. It involves risks which endanger providers due to limited availability and legal issues. But, that does not stop people from earning and setting up a business to provide people with this psychoactive plant.

Marijuana is grown in the ground in plain fields. It is cultivated and distributed around the world. Those who want to purchase and consume the substance go to dispensaries who have a legal license to provide the plant in a controlled environment. Patients who require the use of medical marijuana are given recommendation letters from doctors. These letters are shown at dispensaries and the quantity that is sufficient for their treatment is provided.

The Cultivation of Marijuana

But, where do these dispensaries get the plant from? The cultivation of marijuana is not an easy process, no matter where in the world it takes place, due to the legal issues related to it. The process of cultivation requires permission from the government, social acceptance, favorable geographical limitations, and a big area where the plant can be grown and taken care off.

Dispensaries get the marijuana from farmers who grow the plant, local dealers, and some of them even receive it from illegal sources.  In countries and states that 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. In some places, a valid reason has to be given to prove that the marijuana that is being cultivated will be used solely for medical purposes and sold only to those who have verification from a doctor.

Once the government has allowed cultivation of the plant, the next big step is the transportation of the cultivated plant from the farm or the area where it has been grown to the dispensary or storage area. This carries a high risk of theft from local dealers who illegally deal with marijuana. Alongside, the transportation has to be cleared by legal authorities to ensure that the process is safely held without any problems with the police or any other authority. 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 and given to patients who require it. The records of how much marijuana is cultivated, sold, or destroyed in any way is all kept in the records of the dispensary.

Along with legalization of the medicinal use of marijuana, some states and countries, such as the Netherlands and some parts of the USA, have also legalized the use of cannabis for recreational purposes. State laws define who can cultivate marijuana and who will be dealing in it. These laws may vary from state to state and different places will have different laws. 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 the registered dispensaries will be able to cultivate the plant.

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

  • Rules, Laws and Regulations
  • Financial requirements, records including the bank statements, bookkeeping and all transactions.
  • Management requirements
  • Application fees and other fees associated to a start-up 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.