How to Start an LLC for Cannabis Vendors (Free Guide & Instructions)

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You started a business of marijuana and it is running successfully now. You must have thought about forming an LLC for your business and it is not a bad thought.

Cannabis industry is a very popular business and it attracts new business owners to invest in it. One of the most important aspects in starting cannabis business is choosing a business structure.

LLC is the best choice for new business owners and it can give you a lot of benefits which will be better for your business’s future.

This guide will surely help you form an LLC for your marijuana business; you can also read the detailed guide about LLC.

So, what is an LLC?

LLC stands for Limited Liability Company. This US business structure protects the personal assets of an owner from lawsuits and debts of its company.

This means that no one can touch your personal assets even if your company is in debt or has been sued.

In LLC, there can be one or multiple number of owners of the company and these owners are referred as LLC members.

You can choose any other business structure but for your business, LLC is the best choice as it is more flexible and is quite cheap than the other business structures.

Significance of an LLC for Cannabis industry

Now you have got the general idea of an LLC so we will move onto the next question. Why an LLC for marijuana business?

LLC has provided its benefits to every new business owner and choosing an LLC for your channel is the right decision.

The reason why I say that is because you can protect your own assets by forming an LLC. This applies for every business owner, whether he or she is generating a lot of income or not.

This limited liability protection is what you need for your Marijuana business so that no one can harm your personal assets even if your company is in debts.

Another big advantage is that you get more tax options. You do not get these advantages in sole proprietorships or corporation.

By default your LLC structure is like a sole proprietorship where your profits and losses are not filed with your business but are taxed through your personal assets.
Sole proprietorship does not provide limited liability protection which is the reason why LLC is better than corporations and sole proprietorships.

Another great benefit you get by creating an LLC for your Marijuana business is that you increase your business’s credibility.

LLC is a renowned business structure and by adding LLC to your Cannabis business, you create a solid impact on your customer’s mind.

You also get rights of your business’s name which means that any business owner cannot have your name otherwise he will be charged with copyright laws. You create a great impact on sponsors by adding LLC in your business, your business gets more professional in the eyes of customer.

How to form an LLC for Cannabis Industry?

Now you know why LLC is significant for Marijuana business and all its benefits. Let’s move forward to the process of forming an LLC.

First of all remember that every state has its own laws in forming an LLC and marijuana business is not legal in every state so need to check if you can start your business or not.

I’ll be listing down some major steps to start your LLC but if you want the detailed guideline on the formation of an LLC, you can click here.

  • Select your state
  • Pick a name for your LLC
  • Hire an LLC Registered Agent
  • Create an LLC Operating Agreement
  • File your Article of Organization
  • Get an EIN

#1: Select your state

Choose in which state you want to start your LLC. Every state has its own laws and it is wise to start your LLC where you live and will carry out your business.

#2: Pick a name for your LLC

You need to choose your LLC name carefully. Your business name should be attractive to your customers as it will be the first thing any customer will look up to.

Check if your name is available. After picking your name you also need to check its availability in your state and if your name is not available then you need to pick another. You can check your name’s availability at many different websites.

After checking your name’s availability, you need to secure it as well. It usually takes two months to start your LLC and you do not want anyone else grabbing your name in that period.

#3: Hire an LLC registered agent

Every state demands you to have a registered agent. Your agent will deal with all your legal matters so you do not miss out anything. He will be a vital factor to your company’s success.

You can also look up to your towns top registered agent service provider if hiring an agent seems complicated to you.

#4: Create an LLC operating agreement

An operating agreement will highlight your company’s standard and rules. If your business include more than one member than creating an operating agreement is vital.

It showcases the responsibilities, rights, voting power of every member. It also tells how your business’s revenue will be distributed among members which avoid any conflict regarding money.

Many states do not demand you to create an operating agreement but by creating an agreement you can avoid any future conflicts between your company’s members.

#5: File your article of organization

Article of Organization or Certificate of Formation is a simple document which give you access to officially enter LLC.

This document must be filed with proper consultation and must be filed correctly.

Many others online platform like Legalzoom offer methods to solve this process quickly.

#6: Get an EIN

EIN stands for Employer Identification Number. It is like a social security number required by your LLC for many purposes like opening a bank account, filing company taxes etc.

This number allows IRS to identify and tax businesses.

Even if you have a Marijuana business, an EIN will help you keep your personal finance away from your professional finances

You can get an EIN for free if you will directly apply to the IRS.

LLC service providers:

Now you have learned about the steps needed to form an LLC but if formation of your LLC seems to you as a hectic job than you should consider hiring LLC service providers.

There are many great companies that offer LLC services but I’ll be discussing a few of them.

If you want to know about all the best service providers then you can read our detailed guide.


If you are looking for the complete package then ZenBusiness is the best choice.

They have got everything; at just $49 their starter pack includes LLC formation, free registered agent for one year, operating agreement template and much more.

They have 4500+ reviews and mostly all of them are positive.

It also offers a pro-package that has a worry-free guarantee feature. This feature provides good care to customer’s annual report filing.

You can also read our gull review on ZenBusiness.


If you are looking for a more experienced company then Northwest is definite choice. They have been providing LLC services form 1998 and has established themselves as the best LLC service provider

Northwest has got the best customer support as their team is filled with highly professional staff. They also provide LLC registered agent free for one year.

One major downside of Northwest would be its pricing. Northwest is quite expensive as compared to others and mainly that is because of its experience in providing LLC service.

You can also read the full review of Northwest for complete guidance.


If you are looking for a service provider in which you don’t have to spend a penny, then Incfile is the best choice.

Incfile is the most affordable LLC service provider; they literally charge you $0 for their services.

They have a lot of experience as well; they have started 250,000 businesses in just 16 years.

They have an excellent customer feedback and have 15,000 positive reviews. Their customer service is also considered to be the best; customers receive unlimited support on email and phone calls.

You can also read our complete guide on Incfile.


Incorporating your Marijuana business is the right step and choosing LLC for that is the best decision.

LLC provides more benefits in cheap price than any other business structure and it provides more features like protection of your personal assets, tax flexibility and much more.

If you don’t have time to create your LLC then you can always hire an LLC service providers and the mentioned LLC service are the best in business.

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