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As with any other business, location is important for your edible business. Think about where you want to set up shop, and learn about the regulations pertaining to that specific municipality.
Rules and regulations differ from one municipality to another. The majority require an application fee of about $5,000, which is non-refundable and can differ widely from one state to another. So you have to check out municipality laws before making an investment decision. Also, you’ll spend a significant amount of time at city hall meetings and planning commissions.
Remember to also keep zoning laws in mind. They stipulate the minimal distance between your edible shop and places like schools. Hastily picking a location and setting up shop without taking into account school locations may lead to a chunk of wasted resources, fines, and even a jail sentence.
The ideal location also allows easy access for your staff and can accommodate all the tools you need in the kitchen. These features allow your staff to work effectively and boost productivity.
Next, think about the type of license required for your edible business. Any cannabis business intending to put up shop in Florida, for example, needs only one type of license. It’s called the medical marijuana treatment centers (MMTC) license. This license is issued by the Florida Department of Health.
If you intend to produce and sell marijuana edibles, you will need to apply for a permit called the medical marijuana treatment center edibles food license. With this permit, you will be certified to operate as a food establishment in Florida. Florida Department of Agriculture and Consumer Services (FDACS) is responsible for issuing food permits to MMTCs to make and sell edibles.
You will have to provide a list of the edibles you intend to produce at your food establishment. A field inspector then conducts an onsite inspection of your premises before your food permit application is approved.
According to cannabis regulations, any edible business must prepare, retain, and implement a well-drafted Preventive Control Plan (PCP). This plan explains in detail how a business handles cannabis or any ingredient that it uses in the manufacture of edibles.
This written document reveals how you identify, prevent, eliminate, or reduce to an acceptable level any physical, chemical, or biological risks to your edible. The particulars of your PCP depend on what you do in your edible business. It may highlight aspects relating to packaging, grading, labeling, food safety, and identity standards.
A preventive control plan calls for proficiency in quality assurance. As such, your PCP must be appraised and approved by your Quality Assurance Person (QAP). This is the person responsible for overseeing the production processes involving your cannabis product. They also ensure that product safety standards are met.
Wondering how much you need to open an edible business?
On average, the startup expenses are about $36,880.
As you can see, opening an edible shop is not cheap. But it’s less costly than setting up a cannabis dispensary. The cost of setting up a marijuana business begins at $250,000 on average. That’s even before you account for the baking expenditure for your variety of edibles.
Here’s an exhaustive list of the startup costs of an edibles business:
With such high overhead expenses, you might think about getting a business loan. Well, not so fast. Most banks are skeptical about lending money to cannabis businesses because of the risks involved.
However, there are investors looking to join the game. So you might be better off convincing an investor to come on board than asking for a loan from the bank.
Also, there are accelerators out there who provide new startups with office space, mentors, legal assistance, and start-up knowledge. You can get all that in exchange for an agreed amount of equity. Your best option is to work with existing startups in accelerators and learn more about how to get in.
Do you intend to buy cannabis from a licensed grower or supplier? Or are you planning to grow your own weed for your edible products? If you opt for the former, you’ll need to locate a wholesaler.
Your best bet in locating a dependable marijuana supplier is to attend cannabis-specific events and workshops. Here, you’ll meet many growers and manufacturers. Make sure you pick someone reputable who guarantees AAAA+ flower; this is the highest grade of cannabis flower available. Some edible shops use whatever they come across: flower, trim, shake, and so on. You can as well inquire about these and make bulk orders.
On the other hand, if you choose to grow your own weed, you’ll need to apply for a separate farming license. Of course, this translates to more regulations and increased costs. If the costs of setting up a grow room or extraction operations in your locality are costly, then your best option is to buy from other wholesalers. Just make sure you do your research well to get a good deal and avoid getting ripped off.
You need a commercial kitchen to keep up with the demand for edibles that you’ll be selling. And based on whether you wish to create chocolates, butter, drinks, or a variety of other types, you need to stock up with adequate ingredients. Other considerations include the expiry date of most of your products and whether they need refrigeration or not.
Setting up kitchen infrastructure is not cheap. The alternative is to enter into partnership with co-packing companies that already have their infrastructure in place. They can produce edibles on your behalf and package them using your brand name.
As a startup brand, you need to put your product out there to attract potential customers. Your best bet, in this case, is to visit established dispensaries and convince them to stock your edibles. This allows you to obtain some preliminary customer feedback and determine whether your product can attract demand.
Once you’ve established that there’s product demand and you’ve set up your production, the next step is to solve the distribution puzzle. This involves getting your product out there close to the consumers for quick and easy purchasing.
When picking out your distribution channels, consider the following factors:
Once you’ve entered into a partnership with some distributors, you need to ensure that your edibles are supplied consistently. You also have to make sure the distributor is presenting your products to potential consumers in the right way.
As such, you’ll need to walk around and visit dispensaries that have your product on the shelves. The idea is to experience what a consumer sees when they look at your product.
Entrepreneurs are not bogged down only by cannabis licensing requirements. There are more bottlenecks to navigate. These include compliance with standards for packaging for edibles. As with everything else, the regulations vary by state.
Here is what you need to know:
Products should be packed in opaque packaging, and the following details should be clearly seen on all your product packaging:
As with any other business, marketing is integral for your edibles business. However, cannabis marketing on digital and print media is beleaguered by strict advertising restrictions. That’s why you need to adopt more creative marketing tactics.
Keep in mind that you cannot market health claims when it comes to your edibles. If you want to make more sales and increase the awareness of your edibles, here are some creative marketing techniques to adopt:
This will help strengthen your search rankings, backlink profile, and internet traffic and, ultimately, boost your ROI. Remember to always back up your claims about cannabis benefits with statistics and research studies. Websites that accept well-researched blog posts on anything marijuana-related include High Times, Marijuana Marketing Xperts, and Marijuana Mommy.
Your edible business needs integrated software to automate all the critical business aspects like:
Setting up an edible business is easier said than done. This is because there are plenty of licensing regulations to abide by in order to achieve compliance. Plus, traditional marketing tactics don’t apply here.
However, if you’re armed with the right information and a wonderful recipe, and you can bring awareness to your edibles among your target customers, you will achieve a higher ROI in no time.
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