How to Start a Hemp Farm

Hemp farming continues to gain popularity as a high-yield, (relatively) low-maintenance crop that manufacturers can process for a wide variety of commercial applications.

Learn how to start your own Hemp Farm and whether it is the right fit for you.


Start a hemp farm by following these 9 steps:

You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your hemp farm . These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Check out our How to Start a Business page.

STEP 1: Plan your Business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

Luckily we have done a lot of this research for you.

What are the costs involved in opening a hemp farm ?

Hemp farming requires land. Buying farmland — along with farming and irrigation equipment — will require a sizable, upfront investment if you aren’t already farming. If you’re already a farmer, your initial costs will mostly focus on seed stock or clones for starting crops. You’ll also need to secure any required state and local licenses as well as insurance. Most costs associated with growing row crops, such as fertilizer and pest control, are already factored in for annual operating costs.

What are the ongoing expenses for a hemp farm ?

Most ongoing expenses include buying seed stock or clones as well as farming supplies, maintaining farm equipment and buildings, paying worker salaries, and purchasing individual and farm insurance.

Who is the target market?

Hemp farming has both commercial and retail markets to consider. As a textile product, hemp’s commercial market includes businesses looking to compete with various products they can now make with hemp. Plastics, paper, building products, and fabrics are all products challenged by hemp.

In the retail space, customers buying hemp products tend to be younger and more liberal-minded although hemp fabrics and cannabidiol (CBD) sales reach into a wide range of demographic markets. College-educated people aged 25 to 50 represent a core group of hemp customers.

How does a hemp farm make money?

Hemp farms make money from the sale of their bulk, dried hemp.

How much can you charge customers?

Hemp is sold as a commodity so the market dictates the price. Farmers can sell their hemp plants as the fiber, the seeds, or both — with each option priced accordingly. Although prices continue to increase, as a market average, beware of ballooning figures based on speculators. Some in the industry fear hemp’s meteoric rise in popularity may cause a bubble similar to what the technology industry experienced in the early 2000s. Current wholesale prices vary between raw and processed hemp products, ranging from $3 to $3,000 per XXX.

How much profit can a hemp farm make?

Farming is a tricky business. While farmers don’t often turn a huge profit, it’s possible to keep overhead costs low by handling as much of the work as possible with a small crew. Hemp farming has the potential for good profits, but you must temper your expectations with the knowledge that Mother Nature can sometimes be a fickle and difficult partner. Average hemp farming profits typically fall in the range of $200 to $250 per acre.

How can you make your business more profitable?

Currently, hemp farming is experiencing a popularity surge. Offer the general public a chance to see what you do in an effort to destigmatize this plant. Many people will enjoy guided tours and farm visits. You might even consider using your farm as a backdrop for photo shoots. Some individuals would love to be immortalized on film, surrounded by your leafy greens.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

  • Your state's business records
  • Federal and state trademark records
  • Social media platforms
  • Web domain availability.

It's very important to secure your domain name before someone else does.

Find a Domain Now

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After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your hemp farm is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can start an LLC yourself and pay only the minimal state LLC costs or hire a Business Formation Service for a small additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

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You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.

Open a business bank account

  • This separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.
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Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.

Get a business credit card

  • This helps you separate personal and business expenses by putting your business' expenses all in one place.
  • It also builds your company's credit history, which can be useful to raise money and investment later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a Hemp Farm Business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:

STEP 7: Get Business Insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Learn more about General Liability Insurance.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.

How to promote & market a hemp farm

Because you’ll mostly sell to wholesalers, your advertising should feel more like an ad for your entire industry. Create a social media presence and business website to showcase your farming process. Use these platforms to share the final products manufactured from your hemp as well. People really like to see stores and the understanding of how this product can improve daily life is critical.

How to keep customers coming back

Clients will tend to stay with a commercial source as long as it delivers a fair price and a consistent product. Clients stake their businesses on your hemp supply. If you can align your crop rotations and harvests with your clients’ needs, you should also retain those customers.

STEP 9: Establish your Web Presence

A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Start A Hemp Farm In Your State

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Select your state below for an in-depth guide on completing each of these steps in your home state.

Is this Business Right For You?

Because hemp farming is, in essence, the same as cultivating other field crops, it’s a potential fit for individuals with experience farming and harvesting acres of crops. Many traditional produce and commodities (e.g., corn, soybean) farmers now include hemp in their crop rotations or transform entire fields for this industrious material. To prosper in this business, you’ll need a solid understanding of crop rotation, waiting and reutilizing strategies, pest prevention, and harvesting and baling.

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Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

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What happens during a typical day at a hemp farm ?

Much like any farm, most days involve monitoring existing farm systems and equipment as well as your crops. Farming often involves waiting for certain times — both for planting and harvesting. With hemp, the growth cycle averages 110 days. Farmers can stagger or “cycle” their fields between planting, growing, and harvesting to generate a larger annual yield and a constant flow of work. After harvesting and baling their hemp, farmers ship it to manufacturing plants around the country. As such, some daily operations may include the logistics of shipping and receiving.

What are some skills and experiences that will help you build a successful hemp farm ?

Farming experience is a great start. Growing crops involves much more than soil, water, and sun. Experience in the tractor saddle really can give you an edge. Understanding the business world and, specifically, the hemp market, also will prove critical to success. 

While this industry is poised to explode in popularity and demand, the structure and legality of hemp products remain subject to sweeping changes. Understanding the political nature of this crop and how to navigate dissenting opinions of your industry also will be essential.

What is the growth potential for a hemp farm ?

With the legalization of hemp farming around the country, many textile and clothing manufacturers now recognize the benefits of hemp fibers. Hemp has been used for thousands of years in numerous products, such as fabrics and rope. Today, modern manufacturing also uses hemp fibers as a biodegradable plastic replacement. Of course, there is the ever-growing cod market, which has been embraced by numerous citizens from all walks of life as a pain reliever and beneficial dietary additive. Overall, industry experts project hemp farming will remain increasingly popular and profitable for the foreseeable future.

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Take the Next Step

Find a business mentor

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a hemp farm ?

Hemp farming requires a solid demand for your product. Luckily, that demand continues to grow more and more each day. Your business also will need big voices and backers to help share and promote your vision. These include industry leaders in textiles, fabrics, and building materials. The stigma of hemp’s relation to marijuana will continue to turn away some potential clients, but, more than ever, consumer approval seems too positive to ignore.

Align your business with other forward-thinking businesses and act as a voice for environmentally conscious farming. Hemp farming challenges some large industries, such as forestry and fossil fuels, so retaining a market share requires finding allies at all levels. Growing your support team and customer base will be key for growing your overall company.

How and when to build a team

Because of the nature of rotational farming, your team will ebb and flow. For harvesting and baling, your team will swell. But, you won’t need much help during the growing phase. A medium-sized farm may only need two or three people to keep it operating, for example, plus a few more field hands during harvest. A large-scale farm might need three to five equipment operators and a few more field hands to round out its team.

Next Steps

Get more ideas with our Business Ideas Generator.

Check out our How to Start a Business page.

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