5 Things You Should Know Before Starting a Cannabis Business

What do I Actually Need to Know to Start a Cannabis Manufacturing Business? 

Entering the cannabis industry takes a lot of courage and risk-taking because there are many obstacles that do not face other professional spaces. What makes it even more challenging is that there is no real template for how to avoid all the pitfalls, because the rules are always changing. That is not to say a person should avoid becoming a cannabis manufacturer because the experience can be very fulfilling. When consumers report the amazing benefits or explain how your products changed their lives, the reasons for being in this space become clear. There are ways to prepare for the challenges, of course, especially when you do your research.

1. Major Marketing Roadblocks

Cannabis and CBD manufacturers must deal with something expressly unique that other industries do not – extremely restrictive marketing rules. Before you even begin a marketing plan, the product label can’t even list the function. In other words, depending on the product, you may only list the product ingredients.

This can be more than a hassle for those who manufacture cannabis wellness products, especially if you want to stand out from the other brands. Additionally, there are many digital marketing challenges to face in the cannabis industry. Social media posts about products cannot imply that there are any healing properties, nor can they insinuate that any ingredients can relieve symptoms.

Companies are not even allowed to publish customer testimonials in some cases because they can be viewed as medical claims (according to the FDA). Social media platforms like Facebook penalize cannabis brands often, even when they are not selling physical products. The platforms claim that any ads related to cannabis (even non-plant touching content) violates rules by offering “drugs” to the public.

2. Ever-Changing Regulations

The regulatory framework of the cannabis industry is constantly changing, and trying to keep up can be overwhelming, to say the least. Each state that allows for medical or recreational cannabis has a different set of complex regulations about packaging, selling, and advertising products. While these states learn how to work out the kinks of a nascent industry, manufacturers must prepare for the changes.

Trying to stay up to date on every change is impossible to do alone, which is why it makes all the difference to align with a workspace that takes care of compliance certification. It can also help to hire a consultant or to add someone to your team who specializes in regulatory updates to save a huge hassle later. Making the mistake of attempting to do it all in-house will only result in a short lifespan for your product line.

3. E-commerce

Because of federal laws prohibiting the online sale of products containing THC, manufacturers have severe limitations with e-commerce. This means having to count on dispensaries and retail locations, which is already a struggle with packaging restrictions. What this means for companies is a major loss of potential profit, and a tougher journey to become visible as a brand.

4. Banking is Difficult

Every cannabis and CBD business must deal with a lack of banking options, which makes it difficult to accept different types of payment from consumers. Mainstream banking solutions refusing to align with cannabis businesses make paying for bills and other monthly maintenance a complex issue. Additionally, storing a lot of cash on-site is a major security issue, and can make payroll a nightmare.
Luckily, there are some creative banking solutions becoming more available to entrepreneurs but having access will continue to be a challenge. It helps to have the right consultants and mentors on your team to guide you through the struggles and offer creative alternatives. Being a cannabis manufacturer is hard work, but with the right team and some patience, it can be the most rewarding experience.

And finally: It’s EXTREMELY expensive
Starting a Cannabis business is expensive. You’ll have to think about the cost of licensing, legal consultant fees, property, construction, equipment, marketing, and more. And yes, all that even before making your first product sale.


For many of these challenges, MyGN offers solutions, and they are all in one place. 5 cannabis shared-kitchens for cannabis manufacturing, guaranteed Licensing, investment, branding and packaging, and more types of resources are available for MyGN members. As the first shared cannabis manufacturing facility in the USA, we are dedicated to offering you full support to turn your cannabis dreams into reality.