The hemp industry is one of the fastest-growing agriculture-based industries in the United States. Millions of dollars are generated by the industry every year throughout the country. A wide variety of products and pharmaceuticals can be made out of hemp. But it is a relatively new industry because of its relationship to a drug that was banned throughout the country a few decades ago. Newcomers to the hemp industry need to figure out how to make money in agriculture before sinking too much of their money into the business.
Find a niche
One helpful way of profiting from hemp is to find a particular niche. A niche is an area of a business that an entrepreneur wants to fill by perfecting their craft and providing a good or service better than anyone else. In the hemp industry, there are several niches that a potential entrepreneur could excel in. They could embrace an early part of the agricultural cycle such as planting or hemp drying.
- Hemp drying is part of the process by which a raw material is turned into some sort of finished product.
- Other steps in the finishing process include turning plants into thread and weaving.
- There are also businesses that a person can specialize in once the hemp plant is turned into a product. They can market, store, and help with the design process. The hemp industry has many of the same steps that any other industry has and employs many of the same professionals.
Secure financing
Financing is another key step for companies in the hemp industry. For many decades, hemp was demonized in the same way by the federal government as marijuana. Many states and local areas could not even have companies legally growing and cultivating it. The legal system has moved away from this strict enforcement of rules surrounding hemp. But the move does not mean that financial institutions have done the same. They are still weary of lending money to companies that deal with hemp.
As a result, hemp companies may need to pursue alternate approaches to getting off the ground. One way to do this is through angel investors. A company may put together a pitch and take it to investors who had previously shown a clear interest in hemp companies. They may also use their own savings or pursue crowd funding approaches. Billions of dollars are being raised each year for businesses through these alternative means. They can be essential to help ensure that the company overcomes its financial hurdles from banks and other similar businesses.
Treat hemp like a commodity
Some individuals treat the manufacture and usage of hemp as a hobby or a quasi-religious experience. They think that hemp is directly related to marijuana in every way and they embrace the industry like they embraced their previous marijuana usage. These people do not end up being successful in the hemp industry. They are some of the people who often run afoul of regulators and market actors such as banks and financial institutions. In many cases, their businesses fail before they get off the ground.
The most successful hemp industry members treat the crop like any other cash crop. Hemp has to be grown in particular climates and soils. It must be cultivated in a sustainable and profitable way. There should be financial instruments such as futures and mortgages to help ensure that the risk for cultivation is kept as low as possible. People in the industry also need to make sure that they consult other business leaders from similar industries. They need to see how other agriculture-based industries found success and overcame the many challenges that a hemp business could face.
Conclusion
The hemp industry is unique in many ways. Most companies and industries are not stuck in a legal middle ground like hemp. They have been established for decades and in some cases centuries. But in other ways, the hemp industry is the same as most other industries. It is based off of finance, marketing, and a high degree of social capital. Only a competent businessman can help a business in the hemp industry survive over an extended period of time
