An Introduction to the Big Business of Cannabis Seeds
Cannabis seeds can produce widely different plants. And in anticipation of national legalization, the market is evolving quietly, but quickly.
Cannabis seeds are, obviously, integral to the weed industry. With so many growers around the world, they’re in higher demand than ever. As a result, a network of online and physical retailers has popped up to satisfy both legal and grey market needs.
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But increased demand and legalization are changing the seed business. How will the cannabis seeds market evolve with growing demand and more legalization efforts?
The 3 main typles of cannabis seeds.
There is a great deal of variety within cannabis seeds. Specifically, you can divide them into three main types:
Regular: These contain both male and female plants, meaning that half of the plants will not flower. This kind requires more light to begin flowering.
Autoflower: Autoflowering seeds begin flowering as soon as the plant reaches maturity.
Feminized: Seeds that only produce the flowering part of the cannabis plant i.e. the female part.
Aside from the type of seed, seeds differ genetically. This means that breeders have grown them into distinct stains that can produce a wide variety of effects. This is where the real value in cannabis seeds lies.
Why genetics matter.
Anyone who has ever consumed cannabis in any of its forms knows that strain matters. This goes beyond sativa vs. indica. Strains can be bred to produce a variety of effects and serve purposes that go way beyond flavor. For example:
High-CBD hemp seeds are ideal for creating potent cannabis oil.
Strains can be bred for pain management and other medical purposes.
Plants can be genetically altered for shorter, better yields.
Specific types of hemp create stronger, longer lasting fiber.
Not only is the ability to create products with distinct terpene flavor profile a great way to appeal to consumers, but the right genetics can produce vastly different effects with medical and economic advantages. And the more the medical and recreational markets grow, the more demanding consumers are of their weed products and the more competition there is when starting a cannabis dispensary or another type of business.
Who sells cannabis seeds.
Anyone can sell cannabis seeds but not all vendors are legal. International drug laws do not strictly regulate cannabis seeds because they have a variety of uses — animal feed, oil production, clothing material — but some countries are stricter about their importation than others.
Like the sale of growing equipment, cannabis seeds are adjacent to the weed industry but not strictly apart of it. This makes controlling or even studying the market difficult.
Different types of vendors.
According to one scientific paper published by the United Nations Office on Drugs and Crime, there are three different components to this business:
1. Seed companies: Seed companies produce the seeds. The majority are based on the Netherlands or Spain due to their more lenient laws. There are around 122 large scale seed companies in Europe, according to the UN’s research.
2. Breeders: Breeder cross-breed strains to create new ones. They can work for seed companies or conduct their own experimentation.
3. Resellers: There are many more resellers than either of the above two categories. Resellers will often sell product from a variety of companies and can inhabit a legal grey area, catering to black market weed vendors as well.
Marijuana law remains hazy. Today, an increasing number of companies are patenting weed technology, seeds, and the hottest cannabis products. But whether those patents are enforceable, and where they are enforceable within the U.S., remains to be seen.
Plant breeders’ rights
Since the 1960s, plant breeders can have exclusive control over a new variety of a plant they create for twenty years following a submission to the plant variety office. Control over everything from seeds to cuttings is given to that breeder for that period of time if that office decides that their plant is genetically or physically distinct. As a result, plant breeders’ can technically have unique rights to the cannabis seeds they breed.
In the U.S., you can also patent genetic varieties of any plant. This includes cannabis seeds. Though the U.S. Patent and Trademark Office is federal, it operates independently of other government agencies. This means that you can patent weed strains, and many companies have done so already.
However, even if someone does rightfully own a patent of a certain type of seed, that doesn’t mean that their patent is enforceable nationwide.
According to the United States Patent and Trademark Office, you can patent asexually reproduced plants if they possess certain characteristics due to their genetics or if they’re a hybrid version of a different plant. According to one Reuters report, 39 cannabinoid-related patents were filed in 2018. Cannabinoids are the compounds found in weed that vary from strain-to-strain.
The vast majority of these patents went to drug companies. A few went to universities and other entities.
Another industry that will boom post-legalization.
Cannabis law is still under development. However, entrepreneurs and big companies alike are increasingly patenting a major element that can set their product apart from the rest: cannabis seeds. With the rights to a signature strain, there are two things that can be done:
Sell them over the internet or in stores to the increasing number of growers and individuals looking to produce their own weed
Today, people all over the internet are selling cannabis seeds with little to no oversight but, seemingly in anticipation of legalization, corporations are striving to control everything from plant genetics to technology. This could help certain ahead of their time companies could control major industries like CBD — all thanks to seed patents they’ve filed today.
Start A Marijuana Business
5 Things To Know When Starting Your Marijuana Business
Marijuana, also referred to as cannabis, is currently the fastest growing industry in the United States of America. While there are hundreds of ways to get involved in the industry, marijuana licenses to grow, sell and/or create marijuana-infused products have become the most coveted vertical in the industry.
In order to operate a marijuana business, you must be licensed by your respective state, in some cases you will also have to be licensed by the city or jurisdiction your facility is located in.
To start a marijuana business, you’ll need to obtain a license from your state through an application process. If you’re interested in doing so but don’t know where to start your planning, follow our steps below.
#1 – Understand your State’s Marijuana Program
Applicants need to understand that each state has different laws and regulations. For example, some states allow an unlimited number of marijuana businesses (like Oklahoma) and some states limit the number of marijuana businesses (like Missouri or Illinois). In addition to understanding marijuana laws and regulations, we suggest doing your due diligence to figure out if your state is currently accepting applications for licenses or not. Meaning, many licensing processes are done through a Request for Proposal or Request for Application process during specific dates and times. Learn about your state’s program by selecting it on this page.
Fun Fact: New York only awarded 5 Medical Marijuana Business Licenses, while Denver, Colorado has more Medical Marijuana Facilities than Starbucks.
A great way to educate yourself on your state’s program and begin preparing for an application process is through our Custom Marijuana Business Application Guide & Checklist. The guide provides a detailed checklist of all action items you’ll need to complete when applying for and establishing your business.
#2 – Know your Marijuana Business Type:
States often have different license types outlined in their program legislation, rules, and regulations. In order to determine what type of business you want to open, we’ve outlined some of the most popular license types below. These types of business are often referred to as “plant-touching” businesses.
- Cultivation/Growing: Cultivates, dry, trim, or cure and package marijuana for sale to a processing or dispensary/retail facility. Read more about How To Start A Marijuana Grow/Cultivation Facility.
- Processing/Manufacturing (Infused Marijuana Products): Obtains marijuana from authorized licensed facilities and extract resin from the marihuana or creates marihuana infused product for sale and transfer in packaged form to a dispensary/retail facility.
- Dispensary/Retail Facility: Purchases marihuana from a cultivator or processor and sells, supplies, or provides marijuana to registered qualifying patients/caregivers or customers. Read more about How To Start A Dispensary/Retail Facility.
- Distribution/Delivery: Transports marijuana between licensed marijuana facilities or from a licensed dispensary/retail facility to patients/caregivers/customers within the operating state.
*It’s important to note that not every state will have these four license types. Some states, such as Arizona, only have one license type that allows a licensee to cultivate, process, dispense, and transport all in one. These licenses are referred to as “vertically integrated” licenses. This is why “#1 – Understand your State’s Marijuana Program” is important. When you learn about your state’s program rules and regulations, you’ll learn about their licensing structure. After you are familiar with them, select which license you’ll be applying for.
#3 – Build your Team
If you’re an individual, we suggest finding entrepreneurs, medical professionals, compliance/ regulated industry experience, community liaison, and if possible, marijuana industry experience. You may also want to consider establishing a diverse team (Veteran/Women/Minority Owned Businesses) as states have been implementing diversity bonus points in their programs.
#4 – Secure Real Estate
When looking for a viable location for your facility, you must consider state and city zoning laws for your type of business. Most zoning laws will require you to be at least 1,000 ft from a school, church or daycare center. For more real estate best practices, set up a consultation with one of our industry experts.
#5 – Know Your Budget and Raise $ Capital
You will need to consider state/city application fees to apply for your marijuana business license, state required proof of funds, and professional services (realtor, legal, architect, consultant etc.). These are just a few costs you will incur during an application process.
Learn More About How To Establish The Above With Our Educational Business Tools:
State-Specific Marijuana Business Starter Package
Educate yourself more on the application process and start drafting your plans with our State-Specific Marijuana Business Starter Package, which includes:
– An Informational Overview of your state’s marijuana laws
– An Application Guide & Checklist for an overview of all action items you’ll need to complete when applying for a marijuana business license
– A Business Plan Template to help you start drafting your required plans and executive summary
– A Financial Plan Template for a comprehensive 3-year projection of what you can expect when selling marijuana
State Bundles – Marijuana Business Plan Template Packages
Our State Bundles include all of our available Business and Operations Plan Templates that are applicable to the state’s application process. All included template plans have been drafted from successful license application material and designed with subject-matter experts. All of the template plans are vertically integrated and not specific to any geographic region. You will be responsible for customizing the template plans to fit your market, business and state laws.
Marijuana Business Plan Template
Our Downloadable Dispensary Business Plan Template is around 50 pages in length and is a comprehensive business plan that every entrepreneur interested in opening a dispensary and/or cultivation facility must have. This business plan is an essential document if you own or are going own a medical marijuana dispensary and/or cultivation facility. This business plan is also vital if you are applying for a dispensary permit or are interested in obtaining funding.
Marijuana Security Plan Template
Our Downloadable Dispensary Security Plan Template is around 25 pages in length. We have developed a comprehensive cultivation and dispensary Security Plan for the protection of your equipment, inventory, products, and more importantly, your people. There are added security challenges that medical marijuana facilities face, so our Security Plan considers many policies, procedures, and systems that provide sufficient protection.