The cannabis industry is on fire, so to speak, and marijuana stocks are expected to continue rising over the next several years. After surpassing $10 billion in the US in 2019 and expected to increase even further, the cannabis industry is quickly becoming big business. As with every growing market, this creates plenty of opportunities for up-and-coming entrepreneurs to invest and grow their portfolio.
However, with such a new market, the growth stage presents a menu of options when it comes to investment opportunities. From sales to production and processing, this rapidly growing field has no shortage of opportunity.
Are you considering getting involved with the marijuana industry, but unsure where to start? You’ve come to the right place. Take a look below at the types of businesses you can put your investment towards in the cannabis industry.
The Major Types of Cannabis Businesses
There are two major types of businesses in the cannabis industry: cultivators and dispensaries. The cultivators are responsible for the growth of cannabis, while the dispensaries are responsible for their retail. However, there are several other types of businesses that operate in the industry:
Plant-touching businesses are companies that handle cannabis directly. These businesses are directly responsible for the growing, processing, and distribution of cannabis. Additionally, plant-touching businesses must also follow strict regulations and licensing processes while operating.
Ancillary Service Providers
Ancillary service providers are the companies responsible for providing retail space to support the sale of cannabis. Companies in this space include dispensaries, edible companies, or concentrate manufacturers. While Ancillary service providers must also follow strict regulations and guidelines to maintain business operations, they avoid some of the more strict policies.
Breeders are responsible for the development of cannabis seeds and experimenting with new strains. Much of the work breeders do these days happens in laboratories so your investment with them primarily goes towards the purchase of equipment, research and development. Once the seeds are produced, breeders then distribute them to cultivators.
Once the seeds are provided by the breeders, cultivators are then responsible for growing the cannabis plant itself. The cultivation process requires extensive amounts of energy and climate control systems, which make business operations very meticulous.
Extractors are responsible for taking the raw plant materials and converting them into concentrates, which produce substances such as THC and CBD. This process involves a hefty investment and high-quality machinery to ensure the process is done correctly.
Manufacturers take cannabis flowers and concentrates and convert them into a variety of other cannabis-based products. Much like extraction, converting concentrates into consumable products requires high-end facilities and machinery to produce these products at scale.
Once products are made, dispensaries are responsible for the sale of each. Businesses in this space tend to be highly competitive and require a large and loyal consumer base and infrastructure. Additionally, due to federal laws, dispensaries face several hurdles in financing and licensing.
Investing In The Cannabis Industry
As the cannabis industry continues to grow, so will the businesses revolving around it. While it may be a difficult field to navigate, the main types of businesses we listed above will continue to be some of the most lucrative. If you’re looking to get your foot in the door of the cannabis industry, any of the above are worthy of consideration.
Is there a business opportunity you think we missed? Have any tips for new investors in the market? Let us know what experiences you have in the cannabis industry in the comments below.