How to Start a Cannabis Business: A Complete Guide to Launching in a High-Risk Industry

This blog was first published in January 2024 and updated in October 2025. 

If you are wondering how to start a cannabis business? The answer is, carefully, strategically, and with the right partners by your side. If you’ve been watching the booming CBD industry and wondering how you can claim your share, this guide breaks it all down. You’ll learn the steps, the risks, and most importantly, how to protect your payments with a First Card Payments merchant account designed for high-risk industries like cannabis and CBD.

Key Takeaways

• How to start a cannabis business comes down to research, planning, and risk management.
• The CBD market shows massive potential, with a forecast period pointing to exponential growth.
• Choosing a niche, whether seed companies, CBD gummies, or medical cannabis, helps you stand out.
• Legal compliance and regional estimates shape your expansion strategy.
• Without a high-risk merchant account from First Card Payments, your payment system may collapse under banking restrictions.

Why the Cannabis Business Means Opportunity (and Risk)

Few industries in the modern economy hold as much potential as cannabis.

From CBD oil wellness products to medical marijuana for pain management, consumers can’t get enough. The numbers don’t lie:

Cannabidiol (CBD) Market Outlook

• As per recent research, the global CBD market size in 2024 reached USD 9.4 billion. [Source]
• The industry expects a compound annual growth rate of 21.2% between 2025 and 2033.
• By 2033, experts forecast the CBD market to hit USD 62.8 billion.
• That growth comes from expanding legalization, greater health awareness, and the rising demand for hemp-derived CBD products across industries like personal care, dietary supplements, and medical cannabis.

That said, opportunity doesn’t come without obstacles.

Cannabis companies fall under the “high-risk” category in banking and payment processing.

Traditional banks often hesitate to approve accounts, and many entrepreneurs struggle to accept credit cards or grow online sales.

That’s where First Card Payments steps in, offering CBD merchant account solutions tailored for this unique challenge.

But we will elaborate on this point further down in the blog. For now, let’s take a look at the steps needed to answer the question: how do I start a cannabis business?

Step 1: Understand the Cannabis Industry Landscape

Before you dive in, you’ll need a clear picture of the cannabis market. Think of it as laying the foundation for your company. Without solid research and planning, you’ll risk stumbling before you even start.

Industry Analysis

• The global market for cannabis continues to expand rapidly.
• In North America, legalization fuels growth, while Latin America and the Asia Pacific region move slowly but show steady potential.
• Medical purposes drive one segment, while recreational products like CBD gummies, CBD creams, and CBD capsules fuel another. [Source]
• Top-selling CBD brands like Charlotte’s Web, Green Roads, Joy Organics, and CV Sciences capture significant market share by building trust and keeping products available at affordable prices. [Source]

Industry Trend Analysis

• The industry attracts investment because of rising awareness of health benefits.
• Segment forecasts predict the fastest growth in personal care products, dietary supplements, and neurological disorder treatments.
• Competitors like Aurora Cannabis, Canopy Growth Corporation, and Isodiol International Inc. dominate the competitive landscape, but new players are still carving out niches with innovation and new product offerings.

Step 2: Write a Cannabis Business Plan

A strong business plan does more than impress investors. It keeps you focused when challenges hit.

What to Include

• Market segmentation and analysis report: Show where you’ll compete including segments like medical cannabis, full spectrum products, or hemp-derived CBD products.
• Niche focus: Will you sell CBD oil? Launch a seed company? Specialize in personal care CBD creams?
• Regional estimates: If you plan to ship online, include distribution channels like retail pharmacies, online stores, and wholesale.
• Financial strategy: Secure money through investors, crowdfunding, or cannabis-friendly financial institutions.
• Payment processing solution: This is vital. Without a high-risk merchant account like those provided by us here at First Card Payments, you’ll face blocked transactions and lost revenue.

Step 3: Choose Your Cannabis Business Niche

The cannabis space offers multiple paths. Picking the right one determines your audience and growth potential.

Popular Niches

• Medical cannabis for health issues like anxiety, pain, or neurological disorders.
• CBD gummies and CBD capsules are marketed as dietary supplements.
• CBD creams and personal care products for skincare and relaxation.
• Full-spectrum and broad-spectrum hemp products that appeal to both newcomers and experienced users.
• How to start a seed company for entrepreneurs who prefer the agricultural side.

Focusing on one niche first helps you build authority, then expand later into selling CBD products across multiple categories.

Step 4: Source High-Quality Products

Customers notice quality. One bad batch of CBD oil or poorly made gummies can ruin your reputation overnight.

Tips for Sourcing

• Build relationships with growers of hemp plants that follow safe cultivation practices.
• Use third-party labs for testing purity and potency.
• Partner with prominent players in CBD manufacturing for a consistent supply.
• Explore partnerships with companies with an already developed retail distribution.

Remember, quality drives repeat sales, and repeat sales keep your business alive.

Step 5: Navigate Cannabis Laws and Compliance

Here’s where things get tricky. Cannabis laws change not only country by country, but state by state.

What You’ll Need

• Licenses and permits tailored to your state’s regulations.
• Legal contracts for partnerships and distribution.
• Compliance knowledge for advertising CBD products online, especially across borders.

North America region sees the broadest acceptance, while South Korea and some Middle East countries restrict medical cannabis and hemp-derived products.

Your compliance strategy must adapt to your target regions.

Step 6: Fund Your Cannabis Business

Cannabis financing doesn’t look like traditional business lending. Banks shy away from high-risk industries.

Funding Options Include

• Private investors who believe in the market’s growth.
• Partnerships with market players looking for distribution.
• Bootstrapping until profits cover scaling.
• Crowdfunding campaigns targeting rising demand for alternative health products.

Don’t forget about your financial infrastructure. Setting up accounts, tax IDs, and secure banking relationships will be smoother if you highlight your partnership with a processor like First Card Payments.

Step 7: Secure a High-Risk Merchant Account

Let’s get real, even if you set up the perfect product line, you won’t grow without safe payment processing.

Regular banks often freeze cannabis accounts without warning, but that is where First Card Payments comes in.

Why First Card Payments Makes the Difference

• High-risk specialization: We know the rules, the red flags, and how to keep your account active.
• Experience with CBD companies: Many key players already trust us.
• Backup accounts: Protection from sudden shutdowns.
• Competitive rates: Services offered at affordable prices.
• Customer support: A team that guides you through compliance, setup, and scaling.

With First Card Payments, you can confidently sell through online stores, retail pharmacies, and direct-to-consumer websites without worrying about payment failures.

Step 8: Set Up Your Business Infrastructure

Think beyond the product, your infrastructure matters.

Essentials

• Website: Mobile-friendly, fast-loading, and optimized for SEO with cannabis-related keywords.
• E-commerce system: Integrated with your First Card Payments merchant account.
• Accounting tools: Track expenses, income, and taxes.
• Customer service: Dedicated email, phone, or chat support.

Infrastructure not only supports smooth operations but also builds customer trust.

Step 9: Market Your Cannabis Business

The cannabis industry grows crowded, so standing out requires smart marketing.

Marketing Tactics

• Content marketing: Publish blogs about health benefits, recent developments, and industry analysis.
• Social media: Share lifestyle content showing how people use CBD products to relax, manage stress, or fall asleep quickly.
• Influencer partnerships: Collaborate with voices trusted in wellness and alternative medicine.
• SEO strategy: Target terms like “CBD market,” “medical marijuana,” and “CBD oil at affordable prices.”
• Email campaigns: Share promotions, new product launches, and education around hemp-derived CBD products.

Step 10: Expand Your Offerings

Once you’ve established your niche, expansion helps increase revenue and market share.

Options for Growth

• Add broad-spectrum products alongside full-spectrum lines.
• Develop dietary supplements and personal care lines.
• Offer subscription boxes for regular CBD deliveries.
• Create workshops and education programs on medical cannabis and CBD health benefits.

The growing demand across regions like North America, Asia Pacific, and Latin America means endless possibilities for future product launches.

Summary

Starting a cannabis business feels exciting, but it also feels risky. You’ll face regulations, funding challenges, and skeptical banks. Yet with the right business plan, strong infrastructure, and secure payments through First Card Payments, you can enter one of the world’s fastest-growing industries with confidence.

Don’t let banks hold your cannabis business back! Get approved with First Card Payments today.

Frequently Asked Questions

What types of CBD products can I sell when starting a cannabis business?

Entrepreneurs sell a wide range of CBD products, including CBD oil, gummies, capsules, creams, and full-spectrum cannabidiol products. The best approach often involves starting with one product category, then expanding as your customer base grows.

What is the segment scope of the cannabis and CBD market?

The segment scope stretches across medical marijuana, dietary supplements, personal care, and wellness. Each area offers opportunities, from medical cannabis prescribed for various health issues to hemp-derived CBD gummies and creams available in online stores and retail pharmacies.

How do cannabis businesses gain revenue share in such a competitive industry?

Earning strong revenue share depends on delivering consistent quality, creating a trusted brand, and using secure payment solutions. Because the market includes both global corporations and small startups, building loyalty and offering products at affordable prices can help you compete.

What factors should I consider before launching a cannabis business?

Several factors shape success, including legal compliance, reliable suppliers, product testing, and, most importantly, effective payment processing. Since cannabis counts as high-risk, securing a trusted merchant account through First Card Payments becomes essential for keeping transactions smooth.

How do cannabidiol products help with various health issues?

Consumers turn to cannabidiol products for support with various health issues such as stress, anxiety, pain management, and sleep disorders. While research continues, many users report positive results, which contributes to the rising demand and ongoing market growth.