Hemp Farm Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Hemp Farm Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start an Hemp Farm business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
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Over the past two years, hemp farms have become extremely popular businesses given that the production of hemp is now legal within the United States. Prior to the Farm Bill of 2018, the production of hemp was not permissible. However, with the passage of this bill the usage of CBD as well as the production of hemp is now a completely legal business.
Given the strong demand for hemp as well as
CBD, this is poised to become a $22 billion per year industry within the next
five years. Industry reports show that the amount of capital requested by
venture capital firms for the development of new hemp farms has spiked nearly
fourfold over the past 12 months. One of the nice things about developing a
hemp farm is that they have access to capital given the fact that a substantial
amount of the money needed to launch hemp farm is invested in real estate as
well as fixtures, furniture, and equipment. The gross margins generated by hemp
are typically around 70% at the moment. However, these prices may be inflated
given the tremendous demand within this market. It is expected that there will
be some downward pricing pressure over the next 24 months as more hemp farms
are developed.
As it relates to developing a hemp farm business
plan, this document should feature a three year profit and loss statement,
common size income statement, cash flow analysis, balance sheet, and breakeven
analysis. Specific to the industry research, and as mentioned above, by 2024 it
is expected that domestic hemp production will reach $22 billion per year. One
of the other key components of a hemp farm business plan is to ensure that
procedures and protocols are in place so that the hemp that is being produced
meet state and federal guidelines. A qualified botanist should be hired to
ensure the quality of legal compliance of the hemp produced.
A hemp farm SWOT analysis should also be produced. As it relates the strengths, and forms are able to produce this crop in most climates given its rigid nature. There are very few costs associated with producing hemp, and there are numerous uses for hemp biomass beyond just the production of fiber as well as CBD related products. Hemp oil can be readily used for energy production as well as other purposes.
For weaknesses, hemp farms are going to face a substantial amount of pricing pressure over the next five years as more farmers produce this as a cash crop. Additionally, the operating costs relating to a farm can be substantially high given the amount of personnel that needs to be on staff. Although hemp is a very strong crop, there can be issues relating to production as a function of bad weather.
As it relates to opportunities, hemp farms are able to potentially develop their own on-site processing which will allow for the branded sale of hemp oil and related CBD products.
For threats, although the legislation regarding hemp has changed drastically over the past two years – there may be some unresolved ongoing issues that may occur in the future. As such, it is imperative that the hemp farm retain properly qualified legal counsel in order to ensure that the business remains in the letter of the law at all times.
A hemp for marketing plan should also be developed. This can be done a little bit on the lighter side given that the demand for hemp is tremendous and simply informing wholesalers, manufacturers, and processors that inventories are available is sufficient to generate purchase orders. Once these ongoing relationships are developed, there is typically very little ongoing marketing that is needed in order to ensure that the business can continue to divest its inventories profitably. One of the other ways that hemp farms will also divest their inventories is to develop relationships with farming cooperatives that will take possession of inventories for sale to their customers. This is very similar to the way that other crops are commonly grown.
At the moment hemp farming is a very popular business, and it is extremely profitable. Once his industry becomes more established over the next five years, normalize profiting will take hold and this will become a standardized cash crop. The strong demand for hemp will continue to remain strong especially resin relates to the production of CBD, which is shown to have substantial health benefits for its users.