{"id":286793,"date":"2019-10-16T15:06:33","date_gmt":"2019-10-16T20:06:33","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/cannabis-law\/starting-a-cannabis-business\/setting-up-a-marijuana-business-the-basics.html"},"modified":"2025-05-07T15:54:27","modified_gmt":"2025-05-07T20:54:27","slug":"setting-up-a-marijuana-business-the-basics","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/cannabis-law\/starting-a-cannabis-business\/setting-up-a-marijuana-business-the-basics.html","title":{"rendered":"Important Steps for Starting a New Legal Cannabis Business"},"content":{"rendered":"\n
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Important Steps for Starting a New Legal Cannabis Business<\/h1>\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Laura Temme, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

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Starting a new legal cannabis business requires careful planning and compliance with both state and federal regulations. Key steps include understanding state cannabis laws, choosing the right type of cannabis business, and developing a detailed business plan. Entrepreneurs must also navigate the licensing process, which involves selecting a business structure, registering the business, obtaining necessary permits and licenses, and considering location and zoning restrictions.<\/p>\n\n <\/div>\n\n

Although marijuana is still illegal under federal law, nearly every state allows the use of some type of cannabis product. A few states limit cannabis use to industrial hemp products or CBD oil to treat epilepsy and other conditions.<\/p>\r\n

The number of cannabis and marijuana businesses has increased since California legalized medical marijuana use in 1996. Operating a cannabis business can be lucrative if you follow the steps and obtain the licenses necessary to operate legally.<\/p>\r\n

Even in permissive states like California<\/a> and Colorado<\/a>, the licensing process is lengthy. And cannabis sales, cultivation, and manufacture are tightly regulated.<\/p>\r\n

Would-be cannabis entrepreneurs should have a good business plan and a second marijuana business plan in place before starting the licensing procedures. It’s also important to work with a business attorney who understands the cannabis industry<\/a>.<\/p>\r\n

This article discusses the most helpful way to structure your legal cannabis business. FindLaw’s Starting a Cannabis Business<\/a> section includes other articles covering cannabis business startups.<\/p>\r\n

State Cannabis Regulations<\/h2>\r\n

There are only six states (Idaho, Kansas, Nebraska, North Carolina, South Carolina, and Wyoming) where cannabis is fully illegal. Seven states (Georgia, Indiana, Iowa, Kentucky, Tennessee, Texas, and Wisconsin) permit the use of CBD oil or allow the cultivation of industrial hemp. Many allow the use of medical marijuana. And an increasing number have legalized recreational use.<\/p>\r\n

Before starting any cannabis<\/a>-related business, check the cannabis licensing laws for your state. You should also check any local regulations since state laws permit cities and counties to opt out of state laws that permit dispensaries within their boundaries.<\/p>\r\n

Marijuana licensing laws<\/a> may have other requirements, including background checks or residency requirements. Once you’ve determined if a cannabis-related business is legal in your state, you can move on to the next step.<\/p>\r\n

Types of Cannabis Business<\/h2>\r\n

Because states regulate the cannabis industry <\/a>closely, there are many businesses and license types available. States that allow recreational marijuana use permit adult-use cannabis only. New adult-use cannabis products contain a range of edibles and consumable hemp products. Retailers can legally sell CBD oil products in many retail stores without violating state or federal law.<\/p>\r\n

Common types of marijuana businesses include:<\/p>\r\n