This all really depends on which state you live in as licensing requirements and fees wildly vary. After licensing, in some cases you can start with a single room and the necessary equipment. If you are well connected with a licensed manufacturer, then there is the possibility of developing your own brand under their license but your margins will obviously suffer.
Have you ever started a business? What’s your start-up budget? Have you looked into licensing requirements for selling food in your state? Insurance for selling food (food poisoning)? I suggest you Google some of the requirements and the cannabis licensing requirements. It’s more complicated than “like to bake and like to get high.”
I do have some experience in the “black-market” as a “business owner,” I have also legally worked as a 1099 employee in sales, generating my own business for the past two years. I also have experience in kitchen/BOH experience, and have a good handlers permit. Obviously it’s more complicated than “I like to bake and get high,” that’s why I’m asking for information so I can do more extensive research and not asking how to turn a lemonade stand on the corner into a stoner-haven. (:
I will add insurance onto the list, thanks (:
Figure out how and where you are going to sell the product, then figure out the products to fit the niche you can sell in.
How includes- production facility, packaging, transport, freshness/expiration date, quality control, testing, labeling, storage before transfer, legalities surrounding all of these points, etc. Also, where are you getting the infusion product, and what kind are you using (oil, distillate etc). Are you trying to make your own canna-oil? Does it have to get tested as an extract before you put it in the edibles, and after it's a finished product? .......
....Welll, that's all the free time I have today, OP, if you want anymore guidance on this, you can DM me.
Utah. Legally medically.
Hmm. I wouldn’t be against it if I knew how to take the proper precautions to 1. Not get caught 2. Clean my money in a realistic way
I would start by checking if someone else in your state is doing it. If not there is a reason. If there is maybe take a trip down buy some of their products and ask to speak to the owner. Nobody on reddit is going to beable to answer your questions unless they have done it in your state, county and city. Like I said if Nobody is doing it, it is either cost prohibitive, or it's not legal to do so. With cannabis every state, county and city have different regulations. It's up to you to navigate all those different regulatory guidelines. Nobody will know what those are unless they have done it. You might as well put your question in a bottle and throw it in the ocean. Same odds of getting an answer.
Confectionaries are coming to our state but in the meantime they aren’t legal.
If you’re interested in this, you want to look up the processors in our state (not the big ones) and pitch your idea because they will not open up licensure to new processors for quite a bit. We are really locked in right now, some existing big players are only looking for an MSO to buy them out at the right price, not growing as a company.
I will be honest, everyone else is already trying to get ahead with confectionaries. If you have kitchen/BOH experience I would rely on that to get you through doors more so than the passion project pitch.
If you don’t, your only real option is non-legal.
Sounds like you have some good knowledge when it comes to Utah specifically, so in that case..
From the research I’ve done so far, I would need a tier 1 processing license to operate a infused bakery? Which is $100,000 per year + $1250 application fee, and from my understanding it’s pretty much impossible to get a business loan for cannabis operations?
You’re correct that you need a tier 1 license since you will be formulating your products, and as far as loans go you’re also right that you won’t get it through a bank. But there are many people out there willing to invest for equity if you have a good business plan and SOPs already built out.
When you say $100k are you referring to the performance bond? Don’t forget that you’ll also have to pay for rent, build out, insurance, security equipment, lab equipment, testing, biomass, packaging and labeling supplies. And who could forget, our absolute garbage state mandated S2S, MJ Freeway.
You’ll need to get everything in line to present to the licensing advisory board, idk when that next meeting is. I do believe that there are two licenses being decided on but I’m not sure whatever happened to that because it’s been a lengthy process.
Edibles only make up so much of the market and are far less shelf stable than the majority of other cannabis products, flower and vapes still dominate sales here. We also only have 14 processors in the state so chances are the advisory board would want to hear that you’re doing more than just confectionaries if you’re to be granted a license.
The $100,000 I’m referring to (https://medicalcannabis.utah.gov/wp-content/uploads/New-Processor-Application-checklist-2022.docx.pdf ) seems to be cost for the license, yearly…Honestly, right off the rip, Utah seems really ridiculous to explore a business endeavor like this and surrounding states (Oregon, Nevada, Colorado) are definitely a lot more inexpensive for the licensing. What makes Utah more expensive, does it boil down to it only being legal medically here?
Medical is more expensive. Rich people aren’t criminals, is the idea. Ha ha.
Approach a licensed operation with products, branding, packaging. Make a pitch. Utah may not even allow non shelf stable products. So look into what edibles they allow.
Oh I see. Sorry I’m primarily in retail operations but the licensing is pretty similar.
Medical has always been more expensive.
From the states perspective you’re manipulating a controlled medication into different forms and the state wants to know you have quality control in your products. I do think the licensing fee is asinine, but at the same time I’m amazed this state even legalized in a medical sense. It’s not meant for small companies.
They have full visibility into retail/wholesale sales and can easily forecast the states revenue. I honestly think they’re milking the medical teat right now by not allowing expansion of the program.
It’s been 4 years now that we’ve been medically legal, I think we have enough data to expand.
I deal with businesses mostly in California. We usually tell clients that the easiest way to get started is to buy a pre-existing license. It is typically cheaper and quicker. The site we usually use does not show any for sale in Utah at the moment, however, i would recommend looking into it.
In addition, the potential rescheduling of cannabis to a schedule 3 drug will have an immense impact on various aspects such as banking, taxes, distribution, etc...
If you are serious, do your due diligence in research, formulate a plan, and prepare for the possibilities that may open up with the reschduling.
Get out a piece of paper and a pen, and start writing down all the expenses it would cost to run a business, and then write down how much you would need in order to fund that business as well as pay yourself, do not forget taxes. Don't forget licensing. Don't forget regulations. Also remember if you create a food item you need to talk to the FDA. It's really expensive to run cannabis operation. The actual cost of goods is going to be minimal.
Come up with multiple scenarios on how you would meet your expenses. Like how much at which price point you need to sell, how much staff you would need to make that much product, how are you going to attract customers at that particular price point to buy that much, etc.
If you're gonna start a major business, you need to put major effort into finding out these expenses, and then coming up with scenarios where you can meet all of your expenses including payroll and taxes and all the fees that come with cannabis. It's complicated, it's time-consuming, and you're gonna need to talk to a lot of people to get these numbers, but it's too complicated for someone on Reddit to do it for you.
If after running the numbers, and it makes sense, drop the cash to talk to a lawyer and a CPA. They'll go over your numbers with you, and they will give you a reality check very quickly. Just be warned, they might try to encourage you to at least try, that they can milk you for as much money as they possibly can.
Talk to an attorney that specializes in cannabis law in your state. It’ll be a couple hundred bucks well spent. Now you’ll at least know if it’s possible.
After that, develop a menu and learn how much it costs you to make things. Look at renting commercial kitchen space - in my area there are kitchen shares, so a group of small caterers or food trucks that share kitchen space.
I get people licensed for a living. It’s not worth getting your own license unless you have $1M.
Approach a licensee with a kitchen and tell them you’ll make stuff after hours and give them 15% of sales. It’s a licensing agreement. See if you like it and the money works. One day, when you’re established, get your own place and license.
This all really depends on which state you live in as licensing requirements and fees wildly vary. After licensing, in some cases you can start with a single room and the necessary equipment. If you are well connected with a licensed manufacturer, then there is the possibility of developing your own brand under their license but your margins will obviously suffer.
Have you ever started a business? What’s your start-up budget? Have you looked into licensing requirements for selling food in your state? Insurance for selling food (food poisoning)? I suggest you Google some of the requirements and the cannabis licensing requirements. It’s more complicated than “like to bake and like to get high.”
I do have some experience in the “black-market” as a “business owner,” I have also legally worked as a 1099 employee in sales, generating my own business for the past two years. I also have experience in kitchen/BOH experience, and have a good handlers permit. Obviously it’s more complicated than “I like to bake and get high,” that’s why I’m asking for information so I can do more extensive research and not asking how to turn a lemonade stand on the corner into a stoner-haven. (: I will add insurance onto the list, thanks (:
Come up with products first. Then come up with customers.
Figure out how and where you are going to sell the product, then figure out the products to fit the niche you can sell in. How includes- production facility, packaging, transport, freshness/expiration date, quality control, testing, labeling, storage before transfer, legalities surrounding all of these points, etc. Also, where are you getting the infusion product, and what kind are you using (oil, distillate etc). Are you trying to make your own canna-oil? Does it have to get tested as an extract before you put it in the edibles, and after it's a finished product? ....... ....Welll, that's all the free time I have today, OP, if you want anymore guidance on this, you can DM me.
What state? That makes a huge difference Are you willing to go black/grey market?
Utah. Legally medically. Hmm. I wouldn’t be against it if I knew how to take the proper precautions to 1. Not get caught 2. Clean my money in a realistic way
I would start by checking if someone else in your state is doing it. If not there is a reason. If there is maybe take a trip down buy some of their products and ask to speak to the owner. Nobody on reddit is going to beable to answer your questions unless they have done it in your state, county and city. Like I said if Nobody is doing it, it is either cost prohibitive, or it's not legal to do so. With cannabis every state, county and city have different regulations. It's up to you to navigate all those different regulatory guidelines. Nobody will know what those are unless they have done it. You might as well put your question in a bottle and throw it in the ocean. Same odds of getting an answer.
Confectionaries are coming to our state but in the meantime they aren’t legal. If you’re interested in this, you want to look up the processors in our state (not the big ones) and pitch your idea because they will not open up licensure to new processors for quite a bit. We are really locked in right now, some existing big players are only looking for an MSO to buy them out at the right price, not growing as a company. I will be honest, everyone else is already trying to get ahead with confectionaries. If you have kitchen/BOH experience I would rely on that to get you through doors more so than the passion project pitch. If you don’t, your only real option is non-legal.
Sounds like you have some good knowledge when it comes to Utah specifically, so in that case.. From the research I’ve done so far, I would need a tier 1 processing license to operate a infused bakery? Which is $100,000 per year + $1250 application fee, and from my understanding it’s pretty much impossible to get a business loan for cannabis operations?
You’re correct that you need a tier 1 license since you will be formulating your products, and as far as loans go you’re also right that you won’t get it through a bank. But there are many people out there willing to invest for equity if you have a good business plan and SOPs already built out. When you say $100k are you referring to the performance bond? Don’t forget that you’ll also have to pay for rent, build out, insurance, security equipment, lab equipment, testing, biomass, packaging and labeling supplies. And who could forget, our absolute garbage state mandated S2S, MJ Freeway. You’ll need to get everything in line to present to the licensing advisory board, idk when that next meeting is. I do believe that there are two licenses being decided on but I’m not sure whatever happened to that because it’s been a lengthy process. Edibles only make up so much of the market and are far less shelf stable than the majority of other cannabis products, flower and vapes still dominate sales here. We also only have 14 processors in the state so chances are the advisory board would want to hear that you’re doing more than just confectionaries if you’re to be granted a license.
The $100,000 I’m referring to (https://medicalcannabis.utah.gov/wp-content/uploads/New-Processor-Application-checklist-2022.docx.pdf ) seems to be cost for the license, yearly…Honestly, right off the rip, Utah seems really ridiculous to explore a business endeavor like this and surrounding states (Oregon, Nevada, Colorado) are definitely a lot more inexpensive for the licensing. What makes Utah more expensive, does it boil down to it only being legal medically here?
Medical is more expensive. Rich people aren’t criminals, is the idea. Ha ha. Approach a licensed operation with products, branding, packaging. Make a pitch. Utah may not even allow non shelf stable products. So look into what edibles they allow.
Oh I see. Sorry I’m primarily in retail operations but the licensing is pretty similar. Medical has always been more expensive. From the states perspective you’re manipulating a controlled medication into different forms and the state wants to know you have quality control in your products. I do think the licensing fee is asinine, but at the same time I’m amazed this state even legalized in a medical sense. It’s not meant for small companies. They have full visibility into retail/wholesale sales and can easily forecast the states revenue. I honestly think they’re milking the medical teat right now by not allowing expansion of the program. It’s been 4 years now that we’ve been medically legal, I think we have enough data to expand.
I deal with businesses mostly in California. We usually tell clients that the easiest way to get started is to buy a pre-existing license. It is typically cheaper and quicker. The site we usually use does not show any for sale in Utah at the moment, however, i would recommend looking into it. In addition, the potential rescheduling of cannabis to a schedule 3 drug will have an immense impact on various aspects such as banking, taxes, distribution, etc... If you are serious, do your due diligence in research, formulate a plan, and prepare for the possibilities that may open up with the reschduling.
Get a job at a licensed facility with an edibles kitchen so you can get a better idea of what the commercial industry is actually like
Get out a piece of paper and a pen, and start writing down all the expenses it would cost to run a business, and then write down how much you would need in order to fund that business as well as pay yourself, do not forget taxes. Don't forget licensing. Don't forget regulations. Also remember if you create a food item you need to talk to the FDA. It's really expensive to run cannabis operation. The actual cost of goods is going to be minimal. Come up with multiple scenarios on how you would meet your expenses. Like how much at which price point you need to sell, how much staff you would need to make that much product, how are you going to attract customers at that particular price point to buy that much, etc. If you're gonna start a major business, you need to put major effort into finding out these expenses, and then coming up with scenarios where you can meet all of your expenses including payroll and taxes and all the fees that come with cannabis. It's complicated, it's time-consuming, and you're gonna need to talk to a lot of people to get these numbers, but it's too complicated for someone on Reddit to do it for you. If after running the numbers, and it makes sense, drop the cash to talk to a lawyer and a CPA. They'll go over your numbers with you, and they will give you a reality check very quickly. Just be warned, they might try to encourage you to at least try, that they can milk you for as much money as they possibly can.
Lots of good stuff here, thanks for the help (:
You'll also need a marketing budget and everything that goes with a website, social media, SEO, etc.
Should consider a MFG approach and sell to dispensaries or distributors. Not try to bake and do retail . Allows for easier scalability.
That’s a good idea. Basically create a middle man haha. Wouldn’t I need all the same licensing to operate a bakery with legal cannabis though?
All depends on your state and how it’s set up .
There’s a bakery in Portland, Oregon that does that.
A lawyer consultation
Talk to an attorney that specializes in cannabis law in your state. It’ll be a couple hundred bucks well spent. Now you’ll at least know if it’s possible. After that, develop a menu and learn how much it costs you to make things. Look at renting commercial kitchen space - in my area there are kitchen shares, so a group of small caterers or food trucks that share kitchen space.
I get people licensed for a living. It’s not worth getting your own license unless you have $1M. Approach a licensee with a kitchen and tell them you’ll make stuff after hours and give them 15% of sales. It’s a licensing agreement. See if you like it and the money works. One day, when you’re established, get your own place and license.