How to Start a Mobile Grow Operation Business

Over the last several years, an increasing number of states have voted to legalize and/or decriminalize cannabis, with several opting to make it fully legal. A mobile grow op, also known as “a marijuana grow room,” grows this legal cannabis in a facility, which handles everything from germination and trimming to processing and distribution. 

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Learn how to start your own Mobile Grow Operation Business and whether it is the right fit for you.

Start a mobile grow operation business by following these 10 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 mobile grow operation business. 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 mobile grow operation business?

Because there is a lot to consider when setting up a grow op, a well thought-out business plan is advisable. Once you have determined the scope of your business, you will need to submit a state application for licensure. Application fees range from $150 to $20,000, with an average of $5,000. Most states require proof of a minimum of $250,000 in liquid capital. 

As a mobile grow op, your business’ crop will be grown in an indoor space. Whether you choose to rent or purchase a facility, the space should provide an environment that ensures proper lighting, ventilation, water, and nutrients. Recent studies indicate indoor grow spaces average $75 per square foot. 

Additional startup purchases include:

  • Permits and contractor expenses for facility buildout 
  • Climate control and ventilation systems
  • Lighting 
  • Plumbing fixtures 
  • Proper soil and/or hydroponic equipment
  • Employee training 
  • Waste removal system 
  • Packaging and transport
  • Security
  • Legal fees
  • Insurance

This article is an excellent resource for calculating your lighting and insulation needs.

What are the ongoing expenses for a mobile grow operation business?

Ongoing expenses for an indoor cannabis grow facility are higher than you might expect. In addition to high taxes and lack of write-offs, you will need to consider costs such as business licensing fees, insurance, payroll, equipment maintenance, security, rent, cleaning, and utilities. In fact, one northwest power company suggests the average grow facility consumes between 2,000 and 3,000 kilowatt hours of energy per pound of product.

Who is the target market?

Some grow ops choose to include dispensaries as part of their business plan, while others stick to growing and distribution. Regardless of which path you take, your mobile grow op’s target market is anyone who purchases cannabis, whether for medical or recreational use. 

How does a mobile grow operation business make money?

As a mobile grow op, your customers will be the dispensaries you have partnered with. They act as the middleman, selling your business’ cannabis to consumers.

How much can you charge customers?

According to a Confident Cannabis study, wholesale flower prices average anywhere from $1,000 to $2,000 depending upon quality and location. Perhaps you could expand this paragraph by mentioning other products that can be produced, such as CBD preparations, concentrates, and edibles, along with pricing.

How much profit can a mobile grow operation business make?

The average producer yields a profit of over $1 million annually, with top producers reaching profits of over $200 million. 

How can you make your business more profitable?

With high start-up and ongoing expenses, entrepreneurs looking to maximize profits are encouraged to invest in money-saving strategies at the organization’s inception. Industry leaders have found success through solar power, closed-circuit desalination (CCD), reverse osmosis water systems, rainwater collection and storage, and energy-efficient facilities. 

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

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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 mobile grow operation business 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 one of the Best LLC Services 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?.

Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.

Small Business Taxes

Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).

You can learn more about small business taxes in these guides:

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

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.

Open net-30 accounts

When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.

Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.

Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.

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Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!

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 Mobile Grow Op 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.

For 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.
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Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.

How to promote & market a mobile grow operation business

As previously mentioned, it is critical that every member of this industry become involved on both a state and federal level. This not only ensures your voice is properly represented, it offers unique networking opportunities along the way. Additionally, since both the dispensaries’ and your organization’s successes go hand-in-hand, it is critical that you partner with retailers whose missions align with yours. 

How to keep customers coming back

In this industry, the product promotes itself. Ensuring customer retention means consistently producing quality products and offering both new and returning customer discounts. 

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Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

  • All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
  • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
  • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.

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Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.

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Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.

Start A Mobile Grow Operation Business 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?

While the cannabis industry is a rapidly growing industry, it does require specific knowledge, time, motivation, and resources. Ideally, a mobile grow op business owner should have significant investment capital. Extensive knowledge regarding the grow process and a passion for helping to ensure the industry continues to gain traction and support would also prove beneficial. 

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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 mobile grow operation business?

To ensure healthy crops, the facility’s plants and all grow equipment will need to be checked daily. The success rate of each strain should be analyzed and additional strains considered. When ready, the crops are harvested, trimmed, tested, and packaged for distribution.

While the health of your business’ crops is critical, there is much more that needs to be done to ensure success. Because cannabis is heavily taxed and regulated, industry participants must communicate regularly with state and local representatives, growers across the states, marketing representatives, suppliers, and vendors. 

What are some skills and experiences that will help you build a successful mobile grow operation business?

Most entrepreneurs who enter this industry do so because they have a true passion for the plant and its benefits. They possess extensive knowledge on the subject and genuinely enjoy educating others. As a mobile grow op business owner, you will need to be well versed in all aspects of the growing process. Experience with lighting, as well as exhaust and watering systems is also critical to your crop’s success. Additionally, this niche business requires general advertising and business knowledge. Successful entrepreneurs spanning every industry have one thing in common - they recognize their strengths and weaknesses and surround themselves with a strong team of support. 

What is the growth potential for a mobile grow operation business?

Already a multi-billion dollar industry, the legal cannabis industry has created over 300,000 jobs. While still in its infancy stages, this rapid growth is expected to continue, with an estimated worth of $26.3 billion by 2025. As more states opt to legalize marijuana, the growth potential for mobile grow ops is significant.

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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.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

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 mobile grow operation business?

Because this is a highly regulated industry, with specifics varying from state to state, industry leaders reiterate the importance of a well-rounded, thought-out business plan. Entrepreneurs are encouraged to be well-funded, aiming for more liquid capital than is required by the state. This not only increases your chances for success, it helps solidify your application. 

How and when to build a team

Unlike many new small businesses, you will require an educated and passionate team to support you. The first to join your team should be an attorney who understands both state and federal cannabis laws. Visit the National Organization for the Reform of Marijuana Laws (NORML) database for a list of cannabis lawyers in the United States.

As part of the application process, the state will require that you show proof that your team consists of reputable, quality individuals who are dedicated to serving the community. New business owners are encouraged to consider hiring physicians, engineers, horticulturists, security experts, and administrators whose knowledge and experience can help fill in your knowledge gaps. 

Next Steps

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