Nevada Cannabis Startup Guide

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

Nevada recreational and medical cannabis business startup guide and planning banner

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

Overview of legal cannabis in Nevada

Since question 9 passed in 2000, Nevada adults can possess up to 2.5 ounces of cannabis or 12 plants every 14 days if they have a written recommendation from a qualifying doctor. More than 21,000 patients have registered for medical marijuana use in Nevada.

Recreational marijuana sale and use is also legal in the state. Thanks to question 2’s passage in 2016, Nevada adults 21 and over can possess up to 1 ounce of flower or one-eighth of an ounce of concentrate with up to 1,750 mg of THC for recreational use. Businesses can grow and sell recreational marijuana and products, as long as they don't look like candy or appeal to kids.

People can grow up to 6 marijuana plants at home (12 per household), either for medicinal or recreational use, as long as they live more than 25 miles from the closest state-licensed dispensary.

Medical marijuana dispensary sales in Nevada could be as high as $65 million in 2021, and recreational marijuana dispensary sales in the state could hit $1.1 billion.

Cannabis business license types

Nevada issues licenses for 5 broad categories of recreational cannabis businesses: retail stores (aka dispensaries), cultivation facilities (aka grow operations), product manufacturers (e.g., extracts or edibles), distributors, and testing companies. Medical marijuana business licenses are available for dispensaries, cultivation, processors, and testing labs (but not distribution).

Retail store: A dispensary where anyone 21 and over can purchase marijuana (or with a doctor’s note, if it’s a medical marijuana dispensary). Dispensaries must follow strict protocols for product tracking, security, record-keeping, and more. Marijuana retailers buy product from cultivators, product manufacturers, or other retailers. This is the only license type that can sell direct to consumers.

Cultivators: These businesses, also called grow operations, grow cannabis plants indoors or outdoors. Marijuana is then packaged and either sold to a dispensary or to a product manufacturer that will create edibles, oils, or other cannabis products. In Nevada, cultivators can’t sell directly to the public.

Processors: Cannabis processors, or manufacturers, produce and package items like edibles, tinctures, and ointments. Manufacturers can wholesale products to dispensaries and other distributors, but they can’t sell to consumers directly.

Distribution: These businesses transport marijuana between licensed cannabis companies (such as from a cultivator to a dispensary).

Testing facility: Consumers and regulators alike demand consistency and quality control in cannabis products, which creates demand for marijuana testing labs. These labs analyze products for CBD and THC content, pesticides, terpenes, bacteria, fungi, and heavy metals, to name a few.

If you don’t want to grow, test, distribute, or sell cannabis, you have plenty of other options. You can create an app, payment processing service, advertising and branding agency, ad network, consulting firm, pest management product, automated plant watering system, or security service--the possibilities are limitless.

Fees and other barriers to entry

Local governments may forbid cannabis companies or certain locations, so check city and county regulations. The following information is only for commercial (adult-use) cannabis because the state appears to be halting the acceptance of new medical licenses.

Application fees: All medical and recreational marijuana business applications have a $5,000 fee.

License fees: The license fee for a medical marijuana dispensary, cultivator, or processor costs $5,000 per year in Nevada. For recreational marijuana businesses, the license fees are $30,000 for the first and $10,000 each additional for cultivation; $20,000 for a new retail store (aka dispensary), and $6,600 for annual renewal; and $15,000 for a new testing lab or processor in the first year, with $5,000 for renewal. For distributors, the first year is $15,000 followed by $5,000 in renewal fees.

Financial requirement: Nevada requires that you have proof of $250,000 or more in liquid assets in order to get a medical marijuana business license. If you don’t have that much, you should get your business plan and pitch deck together and raise capital first.

Registered agent card: You have to apply for and get a registered agent card to work (or even just volunteer) at a marijuana retailer. You have to get a background check as part of the requirements for the agent card--you can’t have been convicted of an “excluded felony,” which is “a crime of violence or a violation of a state or federal law pertaining to controlled substances if the law was punishable as a felony” (see here for more info).

Do you need a cannabis business plan in Nevada?

Nevada doesn’t require a business plan to get a marijuana business license, but having one will make your application process much easier. You’re required to submit an organizational chart, resume for each owner and board member, financial plan, advertising plan, security procedures, cannabis testing plan, transportation plan, inventory control plan, and more. 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 an Nevada marijuana business plan should include:
  • Product/service description: Will you run a producer/dispensary, testing lab, cannabis consulting firm, product manufacturer, or something else? What’s unique about your business? Be as specific as you can. If you’ll open a marijuana dispensary, which strains of flower and/or manufactured products will you sell?

  • Market research: If you’re opening a dispensary, how many people live within five miles? If you’ll wholesale manufactured products, 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. 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 the wholesale price per pound. You can also include a break-even analysis, showing which month you will be profitable.

  • Nevada-specific requirements: If not included elsewhere in your application, you should include details in your business plan about your security policy, packaging, and anything else required by the state.

  • 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, check recent local news coverage or 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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