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Start a Marijuana Extraction Business

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Only a small number of states allowed medical marijuana two decades ago. These days, thirty-seven states have medical cannabis programs. Among them are eighteen states that have legalized recreational use. Marijuana’s a sudden popularity across the country has given birth to a whole new industry. It is an industry that involves cultivation, distribution, and extraction.

Entrepreneurs looking to get into the marijuana business may choose extraction as their niche. That is not a bad choice. Both marijuana and hemp extraction represent lucrative opportunities. But starting a marijuana extraction business is neither easy nor cheap. You really have to be committed to succeed.

So how do you start a marijuana extraction business? Here it is in a nutshell:

Research the Law

First and foremost, you have to know what the law says in your state. Remember that marijuana is still illegal under federal law. Your state may allow both medical and recreational use. Alternatively, you may be limited only to medical options. In either case, state law will determine what you can and cannot do as a marijuana processor.

Choose a Business Model

Once you know what the laws in your state allow, it is time to choose your business model. First of all, note that extraction is considered part of cannabis processing. As a processor, you can:

  • process hemp exclusively,
  • process marijuana exclusively, or
  • process both types of plants.

Processing hemp exclusively means concentrating your efforts on CBD and other non-THC cannabinoids. If you were to choose marijuana, your focus would be on THC extraction. You could also choose to process both types of plants in order to maximize the extracts you produce.

Choose Your Extraction Method

Both hemp and marijuana extraction can be accomplished utilizing one of several extraction methods. Research all your options and then choose the one that interests you the most. It is important that you make this choice before moving forward because it will determine how much space you need, the amount of money you will spend, the equipment you will have to buy, etc.

CedarStoneIndustry is a Houston company that supplies CBD extraction equipment, among other things. They recommend that new processors consider extraction efficiency alongside their budgets. Choosing an extraction method based solely on cost is a shortsighted way of approaching it.

Obtain Your License

Operating as a cannabis processor requires a license. States have different licensing requirements, so you will need to know what those requirements are in your state. In most cases, obtaining a license involves little more than proving you have the resources to run a successful business and coming up with the licensing fee.

Find a Location

The final step is to find a location for your business. Depending on your business model, you may run into trouble with zoning restrictions in some cities. You may have to do quite a bit of research to determine what areas of town you can set up in.

With licenses and a location in place, you are ready to get started. You will purchase equipment, hire employees, partner with cultivators, and begin production. Be sure to have a solid marketing plan in place before you produce your first drop of CBD or THC. How well you market will partially determine how much success you enjoy in the early stages.

Bear in mind that this post offers but an outline of how to start a marijuana extraction business. As with any industry, getting started as a marijuana processor requires a significant investment, a lot of knowledge, and the willingness to work hard. Do not expect marijuana processing to be a get-rich-quick scheme.

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