While some states look more favorably towards the use of cannabis than others, multiple observers believe that the federal legalization of marijuana is coming. According to an article at Forbes.com, entrepreneurs might want to tap into the developing cannabis industry while it is still relatively new and inexpensive. Several dispensaries exist already in Oregon where medical marijuana is legal, but evidence suggests that new cannabis businesses are still opening and becoming profitable fast. These are some reasons why investing in the cannabis business is considered a good idea for 2015.
Starting and Investing
The business climate in the legal cannabis sector looks bright because there are many investors for a potential venture that comes with low initial costs. The majority of home growers invested less than $10,000 when beginning while one-third of wholesalers invested less than $50,000, and some marijuana startups have raised more than $1 million.
Making a Profit
Cannabusiness Media published a Factbook report showing that many new cannabis companies make a profit fast. About 62 percent of the businesses reported making a profit within a year while 38 percent said they were modestly profitable and 16 percent said they were very profitable. It seems that there is little risk for startups as only 3 percent of companies reported significant losses, and as few as 6 percent of companies took more than three years to turn a profit.
The Customer Base
Investors are likely willing to risk their money in a sector that is sometimes unstable due to changing legal matters because there is a large demand from the customer base. The average cannabis consumer spends $1,869 annually compared to the $1,500 pet owners spend on their animal companions.
Medical cannabis dispensaries in Portland are more stable than other ventures in cities where the legal recreational use of marijuana is fairly new, and these dispensaries have many offerings for customers, investors and entrepreneurs.