How to Start a Medical Marijuana Grow Business
So you're looking to start a medical marijuana grow business but don't know how to get started? Here at the College of Cannabis we've taken our decades of experience in the industry and have designed a set of courses to help those who are wishing to get into the exciting and growing medical marijuana industry. In this post, we will cover the various intricacies of how to start a medical marijuana grow business. For a more detailed look into the subject, consider purchasing our in-depth course on the subject including all of the business documents involved in the process. Enjoy!
Staying Compliant: Documentation Practices
Now that you have your medical marijuana recommendation, you are ready to start legally cultivating medical cannabis for yourself as well as your collective. In most instances, the recommendation that you received from your doctor will specify exactly how many plants that you will be able to legally cultivate. If it is your desire to cultivate more plants than is legally required by law, you will need to work closely with other patients within your collective or join another collective and cultivate with its members.
In terms of the documentation, it is imperative to make sure that you have the proper documents on hand in case of an inspection. Specifically, it is important to have a collective cultivation agreement and patient recommendations for the number of plants that you intend on growing for your collective. Remember: it’s always better to be over-documented and grow less plants than you are legally allowed as opposed to the other way around. Until marijuana becomes completely legal across all states, it is very important that you take any precaution that you can in order to protect yourself.
For a much more in depth perspective on how to start a medical marijuana grow business (including the necessary business forms), check out our online course! Our courses are in depth, up-to-date and will tell you everything you need to know to get started today.
Lastly, make sure to always keep a copy of your documentation in plain view on the grow site and a duplicate copy somewhere safely off-site in the event that you lose the initial document. Make sure that you have a draft of the corporate bylaws and grower agreements at all locations that you plan on cultivating and growing medical marijuana. Furthermore, make sure to keep enough recommendations on-site to cover the total plant counts. For more information regarding the legal documentation required to start a medical marijuana grow operations, dispensary or delivery service, feel free to check out our Complete Medical Marijuana Startup Docs and Business Forms.
Patient Grower Agreements
The Patient Grower agreement is an agreement between the person who intends on growing and cultivating medical cannabis and the collective whom they wish to grow for. This agreement should set out the details between these two parties including the number of plants intending to be grown (number of patients allocated to the grow with their recommendations on hand), the policy regarding the retention of records, the necessary expense reimbursement protocol, restrictions on the product (if any), and other concerns regarding health. Furthermore, this agreement allows the collective the opportunity and right to inspect the grow site at any time and for any reason. Lastly, the agreement should strictly state that the cultivation of marijuana being grown will be used specifically for the purposes of the collective and not for those outside of the collective. It can't be stressed enough how important this agreement is for your medical marijuana grow business.
How Many Plants Can You Cultivate?
In California, the standard protocol for plant counts based on California Senate Bill 420 (SB 420) is that a patient can possess six adult medical marijuana plants or twelve immature plants (or eight ounces of dried cannabis) for personal use. Having said that, however, it is important to note that these SB 420 limitations are no longer bound by California state law. This is due to the fact that in 2006, the California Courts convicted an MMJ patient, Patrick Kelly, of possessing more than he was legally allowed to cultivate under the directive of his medical marijuana card prescribed by his doctor. Fortunately for medical marijuana patients through California, the case was later appealed by California’s Second Appellate District Court in 2010 and the conviction was later dropped on the ground that legislatively imposed limits on possession and cultivation of medical marijuana are an unconstitutional restriction to a voter-approved initiative. It was the belief by the appeals court that the Compassionate Use Act passed in 1996 by California voters set no limits on how much patients could possess or grow, assuming of course that the plants were for personal use only.
While it’s important to be aware of the legal precedents such as the one described above, it is also good to keep in mind that, despite the overturned conviction of Patrick Kelly, most doctors still use the original SB 420 quantities as the standard protocol for most patients. This isn’t true for all doctors, however. Some doctors have been known for allowing patients up to 99 plants depending on their personal needs and consumption habits. Other doctors have even said that patients can have an unlimited amount of plants in a 10X10’ area. With the amount of plant count variation between doctors, it is best that you cultivate an amount that is commensurate with your personal needs and the needs of your collective. Regardless of the amount of cannabis that you end up cultivating for your medical marijuana grow business, always make sure that you are able to defend the amount if ever questioned by authorities just to be safe.
Lastly, make sure to calculate your allowable plant counts and as stated above, always have the proper documentation on hands at all times! Remember to take into consideration the various pros and cons of large vs. small plant counts, especially when considering the risks of seizure, theft, and pest infestation risks of your medical marijuana grow business.
Respect the Law
During the Bush Administration pre-2008, the federal law had imposed mandatory minimum sentences for cultivating amounts that they considered to be over the legal threshold allowed by state law. During this time it was generally the standard practice by medical marijuana cultivators to keep the number of plants below 100. This was due largely to the fact that anyone growing over 99 plants opened themselves up to the possibility of being convicted to a five-year prison term. Fortunately for medical cannabis growers throughout the state of California, these minimums have since been lifted and are no longer mandatory.
For more information on standard minimum sentences regarding the cultivation of medical marijuana grow operations, be sure to read up on the 2009 case of Charles Lynch who was convicted of federal marijuana-related charges and was subject to a five-year minimum sentence. As you will read, the judge involved in the case reduced his sentence to one year and, as of the writing of this course, Mr. Lynch’s case is still in the appellate court system and he hasn’t served any jail time.
Controlling the Quality of Your Cannabis
With the medical marijuana industry having been around for more than 20 years in the state of California, there is now a substantial infrastructure in place which stretches to many different areas. One of these areas in particular is the growing list of laboratories available to medical cannabis cultivators which will test the product for potency, bacteria or mold, and pesticides.
Furthermore, growers can choose to have their operations certified as organic by a variety of businesses throughout the state of California as well. This process usually starts with an extensive application that takes into consideration the various water and electricity sources involved in the medical marijuana grow business, questions about soil erosion and the surrounding areas, pest control, and other questions in similar veins. Once the application is completed, an inspection of the premises will take place to verify the information supplied in the application. If your medical marijuana grow business passes the inspection then you will be deemed certifiably organic!
Other Things to Keep in Mind Before Getting Started With Your Medical Marijuana Grow Business
Before you officially begin your medical marijuana grow business, it is important to remember a few key things to keep in mind to save you from potential headaches later down the road. The first thing to keep in mind is that it is in your best interest to keep your marijuana grow operation a secret from others. While this may be hard to do for most people, a stealthy operation is paramount to keeping away potential thieves or wrongful raids from authorities.
Along these same lines, it’s also important to keep in mind the odors being emitted as well as the amount of electricity being used in your medical marijuana grow operation. For a list of the best medical marijuana grow setups, feel free to check out our blog post on the topic as well as our exhaustive list of medical marijuana resources.
Planning, Budgeting, and Expense Forecasting
When starting a medical marijuana grow business, it is always important to keep in mind the various expenses that will inevitably occur throughout the process. While expenses usually vary from medical marijuana grow operation to medical marijuana grow operation, the following are fairly typical for all cannabis grow operations alike:
Structural changes to the location used for growing
Lights, trays, ballasts, air conditioning, water pumps, filters,