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5 Things To Consider Before Starting a Legal Cannabis Business

There is a high-profit potential in running legal marijuana business. Cannabis vendors can earn over a million dollars annually while running a legal cannabis operation in states that legalized marijuana sales.1 However, cannabis industry is not without risks, hence it is worth to spend some time understanding various hurdles that one might need to overcome prior to starting the business in the cannabis industry.

five things to consider prior to venturing out into cannabis industry. Merchant Club of America.

Here are five things to consider prior to venturing out into cannabis industry.

1. State and Federal Regulations. Under federal law selling cannabis is still considered illegal, hence cannabis vendors need to ensure that local and state laws are closely followed to minimize any possible legal problems. The industry is heavily regulated and states have different, constantly changing regulations and conditions for growing and selling marijuana. Anyone aspiring to run a cannabis business need to ensure they understand all the conditions, reporting and documentation needed to run such business.

2. Startup Costs. Even though running legal cannabis operations can be a lucrative business, starting one up requires substantial costs. Licensing fees are steep, non-refundable and can run anywhere up to $20,000.3 There is also a requirement for cash business capital. For example, Michigan state demands future cannabis business owners to have business capital between $150,000 to $500,000 dependent on the type of license.4

3. Residency Requirement. Aspiring cannabis business owners must meet state residency requirements as well. For example, if one wants to open a business in Colorado he/she must be a state resident for at least 2 years prior submitting business license application.5

five things to consider prior to venturing out into cannabis industry. Merchant Club of America.

4. Business License. Cannabis vendors need to apply for the state business license way before starting the business venture. The licensing process is complicated and can take up to 10 months. In fact, in some states, the cannabis business license processing time might take up to 18 months.2

5. Payment Methods. Cannabis is considered a controlled substance under federal law, hence most cannabis vendors do not have access to the banking solutions. In addition, stringent financial reporting is required from any legal cannabis business. Merchant Club of America provides custom credit card and pin-based debit payment solutions for cannabis vendors. Instead of dealing with cash transactions and tracking all payments manually, consider Merchant Club of America custom cannabis payment solutions for your business needs.

Contact us today by filling out the form below and get more information about our custom cannabis payment solutions.

This blog is created and managed by DS&P.


  1. “Dispensary Owner/Operator” by Cannabis Training University on cannabistraininguniversity.com Posted on n.d., accessed on 6/18/2018.

  2. “How to Start a Legal Cannabis Business” by Civilized Staff on civilized.life. Posted on 7/31/17, accessed on 6/18/2018.

  3. “How Much Does it Cost to Open a Dispensary” by Michael Cheng on massroots.com. Posted on 3/25/16 accessed on 6/18/2018.

  4. “What Are the Capitalization Requirements” by Department of Licensing and Regulatory Affairs on Michigan.gov. Posted on n.d., accessed on 6/18/2018.

  5. “Setting Up a Legal Marijuana Business: State Laws to Know” by Small Business on smallbusiness.findlaw.com. Posted on n.d., accessed on 6/18/2018.

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