The cannabis industry made huge gains in 2021, with national economic impact up 30% since 2020, and tax revenue at an all-time high. In Colorado, cannabis sales tax reached more than $392 million, helping to fuel the state economy in a time of social, political, and economic duress. Following the grand success of 2021, 2022 is expected to be another year of growth for the cannabis industry, creating a high demand for professionals interested in cultivation.
So, what does it take to start a commercial cannabis cultivation business in Colorado? Let’s take a closer look at state policies, licensing requirements, location selection, facility design, and more.
Basics of Starting a Cannabis Cultivation Company in Colorado
Cannabis cultivation facilities in Colorado are permitted to grow, prep, and package cannabis for commercial sale, but are not permitted to sell directly to consumers. If you are interested in starting your own commercial cultivation facility, you’ll need to follow a few basic steps:
1. Form a Business Entity
Before you can begin the process of applying for a license, you’ll need to form a business entity through the Colorado Secretary of State. Once approved, you will also need to file for a Federal Taxpayer ID, and complete any related paperwork/documentation.
2. Apply for a Marijuana Business License
New Regulated Marijuana Business License Applications can be filed with the Colorado Department of Revenue’s Marijuana Enforcement Division. In addition to filling out an application, you will also be responsible for filing and license fees, and any supporting documentation.
Fees are determined by licensure tier. Colorado offers 5 license tiers, depending on how many plants you plan to grow.
| Tier 1 | Tier 2 | Tier 3 | Tier 4 | Tier 5 | |
| Minimum Plants | 1 | 1,801 | 3,601 | 6,001 | 10,201 |
| Maximum Plants | 1,800 | 3,600 | 6,000 | 10,200 | 13,800 |
The State of Colorado has 90 days to respond to all applications. If you are approved you can move on to the next step. If you do not receive approval, you will need to review your application.
3. Await Municipal Approval
If the State approves your application, it will automatically be sent to your local government/municipal marijuana regulatory agency for further approval. Local authorities have up to 6 months to respond. Once you have received approval you can move forward with your plans.
4. Build Your Cultivation Facility
Once you have received all of the appropriate licenses and official approval, you can move on to designing and building your new cultivation facility!
Key Factors for Building a Cannabis Cultivation Facility
Like any business, it’s helpful to create a business plan, prepare your finances, and investigate the competition, but building a cannabis cultivation facility also has a few unique requirements.
Indoor vs. Outdoor
Before you can even begin the design process, you’ll need to decide whether you want to cultivate indoors our outdoors. Indoor cultivation offers you the opportunity to create the perfect environment for growing cannabis, which can increase crop yields and reduce the risk of pests or contamination. Outdoor cultivation allows you to harness the power of nature to reduce some costs associated with cultivation.
Location
Finding the perfect location for your cultivation facility can be a difficult task since you need a stand-alone location with plenty of space and the right resources nearby. Regardless of whether you plan to build an indoor or an outdoor facility, selecting an appropriate location is of the utmost importance.
HVAC
Cannabis cultivation facilities must be outfitted with specialized HVAC systems which control both temperature and humidity. Because of this, you can’t work with your average HVAC company and will need to work with contractors who specialize in cannabis.
Lighting
Light is one of the most important ingredients for healthy cannabis, which is why your cultivation facility will need powerful lighting equipment. A requirement for indoor cultivation, outdoor cultivation facilities should also be outfitted with lighting to replace sunlight on overcast days and increase light exposure in general.
Irrigation & Fertigation
Rather than manually watering and fertilizing each of your cannabis plants (a tall order when you grow thousands!), many cannabis cultivators prefer automated irrigation systems. In addition to keeping plants hydrated, many cannabis-specific irrigation systems can be combined with automated fertigation technology to deliver precise doses of high-nutrient fertilizer directly to plant roots.
Finding a Reputable Contractor
Whether you are designing your first cultivation facility, or are expanding your existing cultivation empire, work with a professional contractor to get the job done right. A full-service cannabis construction firm will be able to help you with every step of the process from choosing the right location to creating a flexible interior design to accommodate vertical growing, future expansions, and more.
At Vulcan Squad, we specialize in custom, state-of-the-art cultivation facilities. Our team can help streamline the building process, create your dream facility and connect you with resources to advance your business and get production rolling. If you’d like to chat about building a cultivation facility, contact Vulcan for a free consultation!