Cannabis Business: 7 Powerful Success Tips for 2025

What You Need to Know Before Starting a Cannabis Business

Cannabis business opportunities are expanding rapidly across the United States and globally, with the market expected to reach $73.6 billion by 2027. If you’re considering entering this high-growth industry, here’s what you need to know:

• Market Size: The global cannabis market was valued at approximately $35 billion in 2023
• Growth Rate: Industry growing at 18.1% CAGR through 2027
• Job Creation: Created over 280 new jobs per day in 2021
• Startup Costs: Dispensaries require $250K-$2M; cultivation operations $830K+
• Tax Challenges: Cannabis companies face 55% effective tax rates vs 30% for non-cannabis

The cannabis industry represents one of America’s fastest-growing sectors despite complex regulations and financial problems. What makes this green rush particularly attractive is the diversity of entry points—from plant-touching businesses like dispensaries and cultivation to ancillary services like marketing, packaging, and software that don’t require cannabis licensing.

The fragmented regulatory landscape means success requires careful planning. Each state operates as its own “experiment” with different licensing requirements, tax structures, and market dynamics.

I’m Stephen Gold, a cannabis marketing professional who has helped numerous cannabis businesses develop strategic growth plans and steer the complex regulatory landscape of the cannabis business sector.

Simple cannabis business glossary:
– average dispensary owner salary
– how to open a dispensary
– best cannabis pos systems

How Big Is the Cannabis Industry and Where Is It Growing in 2024?

The cannabis business world has undergone a remarkable change in recent years. What was once underground has blossomed into a legitimate industry generating approximately $34 billion in North American legal sales in 2023 alone. That’s a solid 10% year-over-year growth – especially impressive considering the regulatory problems and banking restrictions that most other industries simply don’t face.

Behind this impressive growth? Everyday Americans are changing their minds. According to Pew Research, 67% of Americans now support marijuana legalization – an all-time high that continues to fuel state-level legalization efforts. The Northeast has become particularly exciting, with New York and New Jersey recently launching adult-use markets.

Jobs tell another compelling story about this industry’s impact. Over 321,000 full-time-equivalent positions now exist nationwide in cannabis, growing 15% in just twelve months. To put that in perspective, the cannabis business is creating roughly one new job every two minutes during working hours.

For deeper insights into these market trends, the latest market forecast from Grand View Research provides detailed projections, while Cannabis Industry Data Analytics offers tools to understand what these numbers mean for your business planning.

Which Countries and States Are Driving Legalization Right Now?

The global cannabis legalization movement isn’t slowing down, with several regions leading this green revolution:

In the United States, we’re seeing a fascinating patchwork develop. More than half of all states have legalized cannabis in some form, with the Northeast creating particularly interesting opportunities. New York, New Jersey, and Connecticut have formed what some are calling a “legalization corridor.”

Canada continues to serve as the world’s largest national experiment in cannabis legalization. Since implementing the Cannabis Act in 2018, they’ve built a mature market generating over $5 billion annually.

Germany is making waves as Europe’s potential cannabis giant. Recent legislative changes have positioned them to become the continent’s largest legal market, with medical programs expanding rapidly.

The United Kingdom might surprise you – it’s quietly become Europe’s fastest-growing medical cannabis market. Patient counts are skyrocketing, and consumption has reached record levels as access improves.

What’s the Growth Outlook Through 2030?

Looking ahead, the numbers get even more exciting. Industry analysts project the global legal cannabis market will maintain an approximately 18.1% compound annual growth rate (CAGR) through 2030. This remarkable trajectory would push global market value well beyond $100 billion by decade’s end.

Several key factors support this optimistic outlook:

• Medical applications and research continue expanding rapidly
• The adult-use map grows yearly as more regions implement legalization
• Product innovation is bringing in entirely new consumer demographics
• Gradual normalization of cannabis in mainstream culture
• Social equity programs are creating new business ownership opportunities

Investment patterns in the space are evolving too. Venture capital has increasingly shifted focus toward technology and ancillary services rather than direct plant-touching operations.

What Does ‘Cannabis Business’ Really Cover?

When most people think of a cannabis business, they picture a friendly budtender helping customers at a dispensary counter. But that’s just the tip of the iceberg! The cannabis industry is actually a rich, interconnected ecosystem that spans from the moment a tiny seed is planted all the way to innovative consumption methods and specialized technology.

Before jumping in, it’s worth understanding where your unique skills and capital might fit best. The cannabis supply chain flows through six major segments: cultivation, processing, testing, distribution, retail, and ancillary services.

Cannabis business opportunities: Cultivation to Retail

The “plant-touching” side of the cannabis business forms the backbone of the industry but comes with the highest regulatory barriers:

• Cultivation: Requires specialized facilities with significant initial investment (at least $830,000 for a modest facility) and expertise in plant science.
• Processing/Manufacturing: Transforms raw cannabis into consumer-ready products through extraction, formulation, and packaging.
• Retail Dispensaries: Serve as the industry’s front line, requiring mastery of inventory management, compliance reporting, and security protocols.

The licensing landscape varies dramatically by state. New York, for example, has created distinct license types for each activity, while other states offer vertically integrated licenses.

Ancillary cannabis business ideas you can start without a license

Not ready to dive into the complexities of plant-touching businesses? Ancillary services offer a more accessible entry point with fewer regulatory headaches:

• Marketing and branding services (like The Gold Standard’s Cannabis Content Marketing Firm)
• Specialized software solutions (tracking systems, POS, compliance tools)
• Security services (physical security, transportation, cash management)
• Custom packaging
• Consulting expertise
• Cannabis-friendly real estate services

These businesses don’t require cannabis licenses while still riding the industry’s growth wave. They also typically face fewer banking restrictions and can deduct normal business expenses.

How Do Medical and Adult-Use Cannabis Markets Differ?

Medical and adult-use (recreational) cannabis markets operate under distinct frameworks:

Aspect	Medical Market	Adult-Use Market
Customer Base	Registered patients	Adults 21+
Product Potency	Often higher limits	May have caps
Taxation	Lower or exempt	Higher (excise + sales)
Product Selection	Medical-focused	Broader variety
Operating Hours	May be restricted	Often longer
Purchase Limits	Based on patient needs	Strict recreational limits
Testing Requirements	Stringent	Stringent
Vertical Integration	Often required	Often prohibited

Many states begin with medical programs before expanding to adult-use. This creates a fascinating two-tier system where businesses must steer both frameworks simultaneously.

How Do Regulations, Taxes, and Banking Shape Your Bottom Line?

Running a cannabis business feels a bit like swimming upstream sometimes. The unique financial challenges in this industry can make your head spin—but understanding them is absolutely crucial before you dive in.

Let’s talk taxes first. Section 280E of the Internal Revenue Code is the elephant in the room for every cannabis entrepreneur. This peculiar tax provision prevents businesses that “traffic in controlled substances” from deducting ordinary business expenses from their gross income. The result? While your neighborhood bakery pays about 30% in effective tax rates, your dispensary could be looking at a whopping 55% tax burden.

And then there’s banking—or the lack thereof. Despite some progress in recent years, most major banks still give cannabis businesses the cold shoulder due to federal prohibition. This creates a cascade of practical problems: Where do you deposit your cash? How do you process payroll? What about securing loans for expansion?

What Are the Biggest Licensing and Compliance Problems?

Getting licensed is often where dreams meet reality in the cannabis business world. The process can be both frustrating and expensive.

• Limited Licenses: Many states issue a limited number of licenses, creating fierce competition
• Application Costs: Entrepreneurs often spend $150,000-$200,000 just preparing applications
• Social Equity Challenges: Well-intentioned programs often lack adequate support structures
• Location Restrictions: Zoning regulations can eliminate 90% of potential locations
• Ongoing Compliance: Seed-to-sale tracking, security protocols, and regular reporting create significant operational overhead

How Can You Manage 55%+ Effective Tax Rates?

While Section 280E is a serious obstacle, smart planning can help reduce its impact on your bottom line.

1. Maximize Cost of Goods Sold (COGS): Unlike operating expenses, COGS can be deducted from your gross income
2. Strategic Entity Structuring: Separate plant-touching operations from non-plant-touching activities
3. Facility Layout Planning: The physical layout can impact which expenses qualify as COGS
4. Detailed Cost Accounting: Every dollar spent needs careful tracking and categorization
5. Stay Current on Tax Court Cases: This is an evolving area requiring ongoing attention

Where Can Cannabis Businesses Find Safe Banking Options?

While traditional banking remains elusive, several alternatives have emerged:

• State-chartered credit unions with specialized cannabis banking programs
• Fintech companies offering compliant banking alternatives
• Armored car services for secure cash transportation
• Cashless ATM solutions for electronic payments (though these exist in a regulatory gray area)

At The Gold Standard, we help clients steer these complex regulatory waters while building compliant marketing strategies. Our experience with Cannabis Regulatory Compliance Software gives us unique insight into how successful businesses maintain profitability despite these challenges.

What Steps Build a Compliant, Profitable Cannabis Startup?

Building a successful cannabis business isn’t just about having a great product or location—it requires navigating a maze of regulations while building a sustainable operation. The industry’s unique challenges demand more careful planning than your average startup.

At The Gold Standard, we’ve watched countless cannabis entrepreneurs succeed (and sometimes stumble). The difference often comes down to how thoroughly they’ve prepared in five critical areas:

1. Market Research: Understanding your customers, competition, and local regulations
2. Funding Strategy: Securing enough runway to weather inevitable delays
3. Location Planning: Finding compliant real estate (often the biggest bottleneck)
4. Talent Acquisition: Blending cannabis knowledge with traditional business expertise
5. Brand Development: Creating something memorable while staying within advertising regulations

7-Point Cannabis Startup Checklist

When we work with new cannabis entrepreneurs, we always share this essential checklist:

1. Choose the Right Business Structure – An LLC typically offers the best balance of asset protection and tax flexibility
2. Secure Appropriate Licensing – Beyond the state cannabis license, you’ll need local permits and approvals
3. Develop Standard Operating Procedures (SOPs) – Detailed guides for everything from inventory management to customer check-in
4. Obtain Necessary Insurance – Specialized coverage for the unique risks cannabis businesses face
5. Implement Compliant Point-of-Sale System – Your compliance backbone for tracking, inventory, and taxes
6. Establish HR Infrastructure – Clear policies and training programs to reduce turnover
7. Create an Exit Strategy – Define success metrics early to guide your decisions

How Much Capital Do You Really Need?

Cannabis is notoriously expensive to enter, but costs vary dramatically by business model:

• Dispensary: $250,000 (no-frills) to $2+ million (high-end)
• Cultivation: $500,000 (small) to $5+ million (large-scale)
• Ancillary Businesses: $25,000-$500,000 depending on type

Beyond startup costs, secure at least 12-18 months of operating capital to weather unique industry challenges.

How Do You Market Without Getting Banned?

Marketing a cannabis business often feels like navigating a minefield. Traditional advertising channels regularly shut down cannabis accounts.

At The Gold Standard, we help cannabis businesses across New York, New Jersey, and Long Island build marketing approaches that drive results without risking account shutdowns:

• Search Engine Optimization (SEO): While paid ads face restrictions, organic search results don’t discriminate
• Email Marketing: Direct communication with customers who have explicitly opted in
• Loyalty Programs: Drive repeat business (35% higher customer retention)
• SMS Marketing: 98% open rates compared to email’s 20%
• Community Engagement: Build authentic connections through education and local involvement

The most successful cannabis marketers focus on education and relationship-building rather than direct product promotion.

Where Is the Market Headed Next? Trends, Tech, and Trade

The cannabis business landscape is constantly changing, and staying ahead of emerging trends can mean the difference between thriving and merely surviving in this dynamic industry. As I’ve worked with dispensaries across New York and New Jersey, I’ve had a front-row seat to these exciting developments.

Gone are the days when simple flower products dominated dispensary shelves. Today’s consumers are increasingly sophisticated, seeking out specialized formulations that deliver specific effects for particular occasions and needs.

Meanwhile, technology is revolutionizing every link in the cannabis supply chain. Modern cultivation facilities now hum with automation, sensors continuously monitor plant health, and AI-driven climate controls maintain perfect growing conditions.

Which Product Categories Are Surging?

If you’re looking to spot the next big thing in cannabis, pay close attention to these rapidly growing product categories:

• Cannabis beverages (40% annual growth): New rapid-onset formulations solve the delayed effect problem
• Wellness-focused products (25-30% growth): Sleep formulations with CBN, energy-boosting products with THCV
• Fast-acting edibles (35% growth): Nano-emulsion technology speeds onset times to 15-30 minutes
• Minor cannabinoid products (30% growth): CBG for inflammation, CBN for sleep, THCV for appetite control

How Is Technology Changing Cannabis Operations?

Technology is creating both efficiencies and competitive advantages:

• Cultivation: IoT sensors monitor everything from soil moisture to plant transpiration rates
• Manufacturing: Automated extraction systems maximize yield and consistency
• Retail: Integrated POS systems track inventory, manage compliance, and gather consumer data
• Data Analytics: Consumer preference tracking, inventory optimization, predictive demand modeling

These technological advancements are particularly crucial as markets mature and margins compress.

What Global Trade Opportunities Are Emerging?

While the U.S. cannabis industry remains fragmented, international markets are developing in exciting ways:

• European medical market: Germany leading with its growing program and potential adult-use pilots
• Latin American production: Low-cost cultivation, ideal growing conditions, increasing export capabilities
• Canadian export leadership: GMP-certified facilities and established international supply chains
• Emerging Asian markets: Thailand’s rapidly evolving medical program, South Korea’s pharmaceutical approach

Companies positioning for international trade success are focusing on GMP certification, pharmaceutical-grade production, and building relationships with international distribution partners.

Frequently Asked Questions About Starting a Cannabis Business

How long does it take to secure a cannabis license?

Getting licensed isn’t an overnight process. The timeline varies dramatically depending on location and business type:

• Application Preparation: 3-6 months
• Application Review: 3-12 months
• Pre-operational Compliance: 2-4 months
• Total Timeline: 8-24 months from planning to opening

Unlimited license states like Michigan move relatively quickly, while competitive limited-license markets like New York typically involve longer waits. At The Gold Standard, we recommend starting your planning at least a year before your target opening date.

Can I deduct marketing expenses under Section 280E?

For plant-touching cannabis businesses, marketing expenses generally aren’t deductible under Section 280E. However, there are strategic approaches worth exploring:

• Allocate some marketing expenses to non-cannabis product sales
• Structure with separate legal entities handling different business aspects
• Some marketing costs tied directly to production might qualify as Cost of Goods Sold (COGS)

This is definitely an area where you’ll want a cannabis-specialized CPA in your corner. At The Gold Standard, we help clients develop marketing approaches that deliver maximum impact while working within these unique financial constraints.

What’s the fastest-growing segment of the cannabis business right now?

Several segments show particularly impressive growth trajectories:

• Cannabis beverages: 40% annual growth as consumers seek alcohol alternatives
• Minor cannabinoid products: 25-30% growth as consumers seek specific effects
• Cannabis technology: 35%+ growth as operators look for efficiencies
• Delivery services: 20-25% growth in states that permit them
• Cannabis tourism: 30%+ growth as travel normalizes post-pandemic

For entrepreneurs entering the market now, focusing on these high-growth segments offers the most promising opportunities. At The Gold Standard, we specialize in helping cannabis businesses in New York, New Jersey, and Long Island capitalize on these emerging trends through targeted marketing strategies that drive dispensary foot traffic and build lasting brand recognition.

Ready to launch or grow your cannabis business? Contact The Gold Standard today for a consultation on how our custom marketing solutions can help your cannabis venture thrive in this rapidly evolving industry.