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how to start a marijuana growing business in colorado

How to start a marijuana growing business in colorado

A business plan is not required to get a medical or recreational marijuana business license in Colorado, but it will certainly make the process easier. Your application already has to include floor plans, funding source(s) details, and ownership structure, some of which naturally overlap with a business plan. And if you plan on raising funding from investors, you definitely need a business plan.

Colorado issues licenses for five broad categories of cannabis businesses: retail stores (aka dispensaries), cultivation facilities (aka grow operations), infused product manufacturers (e.g., extracts or edibles), transporters, and testing labs. In Colorado, cannabis business licensees must follow state-mandated protocols for waste disposal, operating hours, recordkeeping, packaging, signage, advertising, and more.

Medicinal and recreational marijuana sale and use are legal in Colorado. Patients can possess up to 2 ounces of usable cannabis and grow up to six plants at home for medicinal use if they have an online certification from a doctor. More than 86,000 patients have registered for medical marijuana use, but this has decreased since recreational use became legal. Medical cannabis sales via dispensaries could be as high as $410 million in 2021.

Marijuana cultivation facilities: These businesses, also called grow operations, grow cannabis plants indoors or outdoors. Marijuana is then either sold through a dispensary or sold to an infused product manufacturer.

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Starting a cannabis company in Colorado? We’ve put together a state-specific guide covering everything from available license types to fees, regulations, and what you should include in a Colorado cannabis business plan. Jump to a section by clicking below, or go straight to our sample cannabis business plan.

Google your city or municipality name and “cannabis regulations” or “marijuana laws” (here’s info on Denver). If your city or municipality’s website doesn’t have information about cannabis, check recent local news coverage or contact your city clerk, city manager, or town hall.

Criminal record: Cannabis business license applicants must be of “good moral character,” can only receive investment from people also of “good moral character,” and can only employ people whose (lack of) criminal history confirms they’re of “good moral character.” Applicants also cannot have been convicted of a felony in the past five years. (See page 44 here.)

Cannabis business license types

Transporter: These businesses transport marijuana between licensed cannabis companies (such as from a grower to a dispensary). You can transport both medical and recreational cannabis in Colorado, but you will need a separate license for each.

Local governments may forbid cannabis companies or certain locations, so check city and county regulations.

How to start a marijuana growing business in colorado

From the legislative perspective, the inclusion of the “distributor” model was a necessary compromise to address the trust deficit with people who do not believe the cannabis industry is effectively and consistently self-regulating.

Cannabis Tester: laboratories intending to test medical marijuana products for quality and potency will be required to apply for a tester license

Additional license types currently in the law include:

Cannabis Dispensary: businesses that intend to retail medical cannabis to qualifying patients will require a dispensing license

How to start cannabis extraction business legally in Colorado

Cannabis Transporter: business intending to transport medical marijuana from one licensed facility to another.

Cannabis Grower/Cultivator: this license is for entities that wish to grow medical marijuana plants from seed or clone, to flower and finish. Growers wishing to provide clones, but who do not intend to flower or finish plants, may apply for a specialty nursery license.

Cannabis Distributor: It is required that – while business agreements can be made directly between any licensed entities—a third-party distributor be responsible for overseeing and officially conducting any business transaction that occurs. Distributors are required track all products received, and to have them tested for quality.

How to start cannabis growing legally in Colorado

Cannabis Processor: this license allows business entities to process raw medical marijuana plant matter into a variety of medicinal products.

Please do not hesitate to contact us to make an order for a cannabis business plan or a cannabis industry research. We will create complete and professional business plans, including pro forma financials and projections to help you know how much money it’ll cost to start your business and how much money you can make by starting and operating your 100% legally compliant medical and recreational marijuana business.