How to Write a Cannabis Business Plan + Free Sample Plan

The cannabis industry continues to grow. Going into business in cannabis is a "once-in-a-generation opportunity" as the product rapidly becomes legal for recreational and medical use in many states.

Legal cannabis sales were projected to top $33 billion by the end of 2023 and grow to nearly $57 billion in total revenue by 2028.

With many people entering the cannabis market, it’s important to carefully think through your cannabis company before starting. In saturated markets, cannabis companies can end up with unsold product. Write your business plan with this in mind to avoid these issues.

A business plan is a living document. Revisit it regularly as your cannabis company grows. Revise and compare forecasts to actuals.

Writing a formal business plan demonstrates professionalism. Overcome stigma by proving you have a clear, viable idea for selling a desired product.

Executive summary

Your executive summary needs to be concise. Keep it to 1 to 2 pages. Describe your company’s name, location, and contact information. Explain what you offer and the problem your business solves. Identify your target market. Look at the competition. Introduce your management team. Provide a financial summary and milestones for validation.

Position your company’s opportunity

With the industry exploding, it’s important to differentiate your cannabis company by offering products or services that meet an unfilled need. Think outside the box and explore related products like CBD oils and hemp.

Common small business types in the cannabis industry include:

Cannabis producers who grow and sell to companies
Cannabis processors who prepare plants for recreational or medical products
Cannabis retailers who sell to consumers

Ancillary businesses like delivery, advertising, and paraphernalia can be lucrative. Consider entering these as well.

Problem and solution

Describe the problem you have identified and how your cannabis company solves it.

Example:

The problem: An abundance of dispensaries selling similar products.

The solution: Open a boutique dispensary that sells high-end edibles and topicals. Provide extensive customer service and rewards options. Brand yourself as offering quality products.

Target market

Understand your total available market (TAM), segmented available market (SAM), and share of the market (SOM). Identify your ideal client and tailor your marketing and sales plan to reach them. Consider social media and demographic information to learn more about your ideal customer.

Buyer persona

Create a character who represents your ideal client and tailor your marketing strategy to them.

Key customers

If selling to other businesses, provide details about the dispensaries or cannabis companies that buy your product and explain their importance to your success.

Competition and competition matrix

List competitors and analyze what differentiates your cannabis company. Develop branding strategies to stand out.

Future products and services

Name the products or services you plan to offer as your company grows and the market develops new needs.

Execution: How your company will respond to opportunity

Describe your marketing and sales plan. Explain your strategic partnerships, operations plan, team, financial plan, milestones, and key assumptions and risks. If seeking investment, include your funding ask and exit strategy.

Marketing and sales plan

Present your company to the market through positioning. Differentiate yourself by providing value that competitors don’t. Develop a website showcasing your products with visuals. Build relationships and provide excellent customer service.

Operations

Sourcing and fulfillment

Identify who grows and acts as your vendor if you are a dispensary. Determine who you sell to if you are a grower.

Technology

Consider labeling and packaging plans and establish an inventory system. Optimize operations with appropriate technologies.

Distribution

Explore transportation and distribution methods like TransCanna. Dispose of unsold products through burning or composting.

Milestones and metrics

Set measurable milestones for growth and track key metrics such as repeat customers, product sales, and vendor pricing. Highlight past successes and consider risks.

Team

Describe your management team and their qualifications. Outline hiring plans if there are skills gaps.

Company overview

Include your mission statement, intellectual property, legal structure, business location, and brief history (if applicable).

Financial plan

Track your finances with a profit and loss statement, cash flow statement, balance sheet, and sales forecast. Compare your business ratios with industry data. Include personnel costs and explain how you will use funds and your exit strategy.

Appendix

Include any charts, graphs, images, or additional information that didn’t fit in other sections.

Conclusion

The cannabis industry offers tremendous growth opportunities. Design a viable idea for your cannabis business and write a comprehensive business plan. Use our free startup checklist and business planning software, LivePlan, to launch your new cannabis business successfully.

Andrew Brooks

Hello!

I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.

My career is built on a foundation of helping individuals and businesses thrive financially in an ever-changing economic landscape. At phonenumber247.com, my aim is to demystify the complex world of finance, providing clear, actionable advice that can help you navigate your financial journey with confidence. Whether it’s personal finance management, investment strategies, or understanding the nuances of market dynamics, I’m here to share insights and tools that can propel you towards your financial goals.

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How to Write a Cannabis Business Plan –