How to Start a Mobile Grow Operation Business

Start a mobile grow operation business by following these 10 steps:

1. Plan your Mobile Grow Operation Business
2. Form your Mobile Grow Operation Business into a Legal Entity
3. Register your Mobile Grow Operation Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Mobile Grow Operation Business
6. Get the Necessary Permits & Licenses for your Mobile Grow Operation Business
7. Get Mobile Grow Operation Business Insurance
8. Define your Mobile Grow Operation Business Brand
9. Create your Mobile Grow Operation Business Website
10. Set up your Business Phone System

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.

Exploring your options? Check out other small business ideas.

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:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

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

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.

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. 

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.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

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.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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.

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.

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.

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. 

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.