Louisiana Cannabis Startup Guide

Starting a cannabis company in Louisiana? We’ve put together a state-specific guide covering everything from available license types to fees, requirements, and what you should include in a Louisiana cannabis business plan. Jump to a section by clicking below, or go straight to our sample cannabis business plan.

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Overview
Cannabis license types
Fees and other barriers to entry
Are cannabis business plans required in Louisiana?
What to include in a business plan
How to research city regulations
Helpful links
Get expert help

Overview of legal cannabis in Louisiana

Since SB 271 passed in 2016, Louisiana adults can possess a 30-day supply of cannabis if they have a recommendation from a doctor. Licensed medical marijuana businesses can grow and sell cannabis in some forms; flower and vaporizable forms are not allowed, but products like oils, edibles, and capsules are.

There are currently about 5,000 medical marijuana patients in the state of Louisiana; it is hard to determine the exact number because the state has yet to set up a registration system. The total sales of medical marijuana in 2021 is expected to be about $25 million.

Cannabis business license types

Louisiana issues licenses for two broad categories of cannabis businesses: licensed pharmacies (aka dispensaries) and cultivators, and testing companies. The state only permits two cultivator licenses (both filled) and ten pharmacy licenses. Nine of the 10 pharmacy licenses are distributed and there’s no indication from the state that it will be accepting applications for the remaining license anytime soon.

Pharmacy: This is a dispensary where patients can purchase medical marijuana. Louisiana dispensaries must follow strict state-mandated protocols for product labeling, packaging, testing, and more.

Cultivator: These businesses, also called grow operations, grow cannabis plants, process them into legal forms such as tinctures, and sell them through a dispensary. Like dispensaries, grow operations also are required to keep thorough documentation, including water sources, smell abatement procedures, and so forth.

Ancillary business: If you don’t want to grow, test, or sell cannabis in Louisiana, there are plenty of other ways to be part of the state’s cannabis industry. You can create a marijuana app, payment processing service, consulting firm, pest management product, accounting firm, automated plant watering system, security service, packaging labeling service, or legal firm--and that’s just the tip of the iceberg!


Fees and other barriers to entry

Local governments may forbid cannabis companies or certain locations, so check city and county regulations.

Application fees: Applying for a cannabis business license in Louisiana costs $450.

License fees: The annual fee to operate a cultivators is $100,000. There is no annual license fee for pharmacies.

Financial requirement: You have to have $100,000 in escrow, bond, or letter of credit to open a medical marijuana business in Louisiana.

Background check: Applicants have to undergo a criminal background check if they have any ownership interest in the company. Fingerprinting is optional.

Do you need a cannabis business plan in Louisiana?

A business plan is not required to get a medical marijuana business license in Louisiana, but it will certainly make the process easier. Your application already has to include information on your facility, location, management, and operations, some of which naturally overlaps with a business plan. And if you plan on raising funding from investors, you definitely need a business plan.

What to include in your business plan

Here’s what a marijuana business plan should include:
  • Product/service description: Will you run a dispensary, grower/processor, or something else? What’s unique about your business? Be as specific as you can. If you’ll open a marijuana dispensary, which products will you sell?

  • Market research: If you’re opening a dispensary, how many people live within five miles? If you’ll create oils or pills, how many dispensaries will you sell to? If you’re creating an app, who will be the user base, and why would they use your app instead of someone else’s? Use concrete numbers verified by a third party whenever possible (instead of estimates).

  • Competitors: Who will you compete with, both directly and indirectly? What do they do well and poorly? What is their online reputation? How will you differentiate your company?

  • Management team: Summarize your qualifications and those of others on your management team. (Think of it as a shorter, “greatest hits” version of your resume.) Obviously include cannabis industry experience, but it’s fine if you don’t have any. Highlight leadership skills, customer service, and business development experience in other industries.

  • Financials: This part can be tricky. You need a five-year financial forecast, including projected annual revenue, operating expenses, costs, and net profit. Each year’s projected revenue should include not only revenue but also your margin and direct costs. You can forecast revenue by estimating how much product you think you’ll sell (based on market potential), your retail price, your production cost, and how much you’ll spend on payroll, rent, and other expenses. Your cash flow statement will show that you’ll have enough cash to stay operational. You might want to include a sensitivity analysis (best- and worst-case scenarios), which shows 15% higher and 15% lower revenue than your initial forecast. For marijuana cultivators, it’s important to do a sensitivity analysis based on future potentialities of prices. You can also include a break-even analysis, showing which month you will be profitable.

  • Louisiana-specific requirements: If not included elsewhere in your application, you should include details in your business plan about your security system, product tracking, secure product transport, waste plan, and anything else required.

  • Investor proposal: If you are presenting your plan to investors, how are you valuing the shares? Consult with your attorney to make sure you are within state and federal compliance. Sometimes, you’ll need your attorney to draw up an offering memorandum, often called a private placement memorandum (PPM). A PPM informs potential investors on the details of the investment vehicle (your company) and potential risks associated with the investment.

How to research city regulations


Google your city or municipality name and “cannabis regulations” or “marijuana laws.” If your city or municipality’s website doesn’t have information about cannabis, contact your city clerk, city manager, or town hall.

Helpful Links

Get expert help


Confused or overwhelmed yet? That’s normal. With such a highly regulated industry, and one with different rules in every state, starting a cannabis company can be very complex. Get help with your cannabis business plan from Masterplans, the industry leaders. We’ve worked with hundreds of cannabis entrepreneurs like yourself to create investor-ready documents and presentations so you can not only meet regulations but get the funding you need. Click below for your free, confidential consultation:

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