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If you are planning to write the hemp farm business plan on your own, then this sample hemp farm business plan can be great for guidance. However, if you are looking for a professional business plan writer for a business loan, SBA loan or to find out the possibility of success for your new business then let’s talk!  

Executive Summary

Overview: Rex Morgan CBD Hemp Farms, LLC is a registered and licensed CBD hemp farm based in Sioux Falls, South Dakota, United States of America. We will sell our products in and around South Dakota because we know our products will be in great demand owing to the state’s demographic makeup. Governor Dennis Daugaard of South Dakota signed Senate Bill 95 into law on March 17, 2017. The bill added cannabidiol to the list of Schedule IV banned narcotics and exempted it from the classification of marijuana, but it stipulated that the CBD must come from a product that has been certified by the US Food and Drug Administration (FDA). We will be producing a special variety of the plant species Cannabis sativa L for medical and lawful recreational use at Rex Morgan CBD Hemp Farms, LLC.

Mission:” Our Mission is to begin full-time commercial production of hemp and other similar nursery plants and flowers that will not only be sold in the United States but also exported to other countries.

Vision: “Our Vision is to become one of the top ten CBD hemp farms in the world, not only in the United States of America”

Industry Overview: The CBD hemp farming industry is part of the Plant & Flower Growing industry, which grows nursery plants like trees and shrubs, as well as flowering plants like cannabis, foliage plants, cut flowers, flower seeds, and ornamentals, as well as short-rotation woody trees like Christmas trees and cottonwoods.

Financials is one of the most important sections of a hemp farm business plan. You can get an idea of your projected revenue, required investment amount, is the business sustainable without additional funding, etc.

Financial Overview:

Hemp Farm Business Plan Financial Overview

Financial Highlights:

Liquidity2020A2021A2022F2023F2024F
Current ratio612233242
Quick ratio611223140
DSO88888
Solvency     
Interest coverage ratio  8.211.114.2
Debt to asset ratio0.010.010.20.180.16
Profitability     
Gross profit margin51%51%53%53%53%
EBITDA margin12%14%21%22%22%
Return on asset5%6%13%14%14%
Return on equity5%6%16%17%17%

Fund Usage:

Hemp Farm Business Plan Fund Usage

Industry Analysis:

The industry analysis section of the hemp farm business plan will help you get better insights into competitors, market growth, and overall industry prospects. You can order a custom market research report for your hemp farm business.

Overview: Due to the legalization of hemp production and need for biodegradable and renewable natural materials in various consumer products, the global industrial hemp market is worth over USD 205 million in 2020 and is expected to increase at a CAGR of over 6% between 2021 and 2027. There are various environmental and nutritional advantages to industrial hemp. Hemp seeds are in high demand due to the rising demand for dietary supplements, foods, and beverages, as well as growing consumer health awareness. Hemp oil is used in personal care and cosmetics because of its high antioxidant content. The expansion of the industrial hemp market is being fueled by rising demand for dietary supplements, foods, and drinks, as well as rising consumer health awareness. Cannabidiol (CBD) and CBD oil, which are found in hemp, have a variety of therapeutic characteristics and have the potential to treat cancer, diabetes, and pain, including chronic pain, which is predicted to be a major market driver. The global industrial hemp market is predicted to increase at a compound annual growth rate (CAGR) of 16.8% from 2022 to 2030, with a market value of USD 4.13 billion in 2021. The market is being driven by an increase in demand for industrial hemp from businesses such as food and beverage, personal care, and animal care all around the world. As a result of the economic slump induced by the COVID-19 pandemic, which has resulted in a drop in manufacturing operations, the worldwide market is seeing limited growth. As a result, the stock market has suffered a severe setback. The market, on the other hand, is predicted to develop at a quicker rate due to the high rate of global economic recovery.

Hemp Farm Business Plan Industry Analysis
These flowering and nursery plants can be grown in either a covered or open field. The CBD hemp farming sector is rapidly expanding in nations such as the United States of America, Columbia, China, Ecuador, Italy, France, the United Kingdom, and Jamaica, among others. According to statistics, there are over 223,123 registered and licensed CBD hemp growing firms in the United States of America, employing approximately 763,189 people and generating an annual revenue of $6 billion. Between 2013 and 2018, the industry is expected to increase at a rate of 28.3 percent per year. It’s vital to note that no corporation in this area has a lion’s share of the potential market.
Hemp Farm Business Plan Industry Analysis

While working on the industry analysis section of the hemp farm business plan make sure that you add a significant number of stats to support your claims and use proper referencing so that your lender can validate the data.

The CBD hemp farming business, which includes both employer and non-employer facilities that cultivate hemp for medical and recreational use, thrived throughout the five years to 2018, according to recent research published by IBISWorld. Recent legalization victories, most notably during the 2016 election cycle, demonstrated that the cannabis business is one of the fastest expanding in the US. Eight states passed marijuana legalization proposals in 2016. According to New Frontier Data, almost a third of the population of the United States now lives in states where marijuana is legal. Consumer views are also propelling state-level legalization attempts. According to Gallup, 80.0 percent of Americans support the legalization of CBD hemp.

The federal legality of industrial hemp production does not supersede state, county, or local restrictions, in addition to the regulatory vibe. Simply said, it means that a state, county, or city can impose stricter regulations than the federal government. Currently, roughly 15 states have passed pro-hemp legislation; the remaining states are either silent or vaguely neutral. Many states, counties, and localities are included in this list.

Marketing Plan:

A key part of the marketing plan in a hemp farm business plan is the marketing budget. The growth in the number of customers is proportional to the budget and dependent on the CAC.

Hemp Farm Business Plan Marketing Plan

We are well aware that the incapacity of certain CBD hemp farming enterprises to sell off their farm produce on time is one of the main reasons for their lack of profitability. Our sales and marketing team will be hired based on their extensive expertise in the CBD hemp growing sector, and they will be trained regularly to ensure that they are well-prepared to fulfill their goals and Rex Morgan CBD Hemp Farms, LLC’s overall business objectives.

Social Media : To advertise our business, we should use the internet and social media platforms such as Instagram, Facebook, Twitter, YouTube, Google+, and others.

List our CBD hemp farm in local phone books and directories. Promote our CBD hemp farming business on our official website and use traffic-driving techniques.

Events and Programs: fund events/programs that are important to the community

Join local chambers of commerce and industries to promote our goods.

Direct Marketing: Distribute our fliers and handbills in targeted regions using a direct marketing strategy.

Advertisement: Send introductory letters with our brochure to firms that use hemp and cannabis plants and seeds to introduce our CBD hemp growing business. Advertise our company in business journals, newspapers, and television and radio stations that are relevant to our industry. Install our billboards in high-traffic areas in Sioux Falls, South Dakota.

Branding: Ensure that all our staff members wear our branded shirts and all our vehicles and trucks are well branded with our company logo et al.

Organogram:

Hemp Farm Business Plan Organogram

Financial Plan:

This section of the hemp farm business plan helps your lender figure out whether you will be able to pay off the loan, whether the business is sustainable, what are the growth prospects, etc.

Earnings:

Hemp Farm Business Plan Financial Plan

Break-Even Analysis :

Hemp Farm Business Plan Financial Plan

Income Statement:

2020A2021A2022F2023F2024F
ANNUAL REVENUE     
Item 19,21759,117175,410415,277781,357
Item 234,701222,558660,3681,563,3942,941,580
Item 34,06719,56146,43278,519114,905
Total annual revenue47,985301,236882,2112,057,1893,837,842
% increase 528%193%133%87%
COST of REVENUE     
Item 13602,2596,61715,42928,784
Item 24803,0128,82220,57238,378
Item 352,00065,00078,00091,000104,000
Item 47203,6158,82216,45823,027
Item 5140,000336,000560,000840,0001,120,000
Item 660,000144,000240,000360,000480,000
Item 732,00061,33385,533112,153141,435
2020A2021A2022F2023F2024F
ANNUAL REVENUE     
Item 19,21759,117175,410415,277781,357
Item 234,701222,558660,3681,563,3942,941,580
Item 34,06719,56146,43278,519114,905
Total annual revenue47,985301,236882,2112,057,1893,837,842
% increase 528%193%133%87%
COST of REVENUE     
Item 13602,2596,61715,42928,784
Item 24803,0128,82220,57238,378
Item 352,00065,00078,00091,000104,000
Item 47203,6158,82216,45823,027
Item 5140,000336,000560,000840,0001,120,000
Item 660,000144,000240,000360,000480,000
Item 732,00061,33385,533112,153141,435
Total Cost of Revenue285,560615,220987,7941,455,6121,935,625
as % of revenue595%204%112%71%50%
Gross Profit-237,575-313,984-105,583601,5781,902,218
SELLING & ADMIN EXPENSES     
Item 128,00096,800154,880175,692193,261
Item 275,000105,000120,000120,000120,000
Item 336,00096,000108,000120,000120,000
Item 48,00012,00012,00012,00012,000
Item 53,83918,07444,11161,716115,135
Item 63,35912,04926,46641,14476,757
Item 75,60010,00012,90415,03417,376
Item 86,66714,00022,06730,94040,701
Total selling & admin expenses166,464363,924500,428576,525695,230
as % of revenue347%121%57%28%18%
Net profit-404,039-677,907-606,01125,0521,206,987
Accumulated net profit-404,039-1,081,947-1,687,957-1,662,905-455,918

Cash Flow Statement:

2020A2021A2022F2023F2024F
CASH FLOW from OPERATING ACTIVITIES     
Net profit before tax-$404,039-$677,907-$606,011$25,052$1,206,987
Depreciation$44,267$85,333$120,504$158,127$199,512
Payables     
Item 1$4,333$5,417$6,500$7,583$8,667
Item 2$11,667$28,000$46,667$70,000$93,333
Item 3$6,250$8,750$10,000$10,000$10,000
Item 4$3,000$8,000$9,000$10,000$10,000
Item 5$667$1,000$1,000$1,000$1,000
Total payables$25,917$51,167$73,167$98,583$123,000
change in payables$25,917$25,250$22,000$25,417$24,417
Receivables     
Item 1$320$1,506$3,676$5,143$9,595
Item 2$360$1,807$4,411$8,229$11,514
Total receivables$680$3,314$8,087$13,372$21,108
change in receivables-$680-$2,634-$4,773-$5,285-$7,736
Net cash flow from operating activities-$334,536-$569,958-$468,280$203,311$1,423,180
      
CASH FLOW from INVESTING ACTIVITIES     
Item 1$16,000$13,200$14,520$15,972$17,569
Item 2$20,000$22,000$24,200$26,620$29,282
Item 3$28,000$22,000$14,520$10,648$11,713
Item 4$96,000$88,000$72,600$79,860$87,846
Item 5$20,000$22,000$24,200$26,620$29,282
Net cash flow/ (outflow) from investing activities-$180,000-$167,200-$150,040-$159,720-$175,692
      
CASH FLOW from FINANCING ACTIVITIES     
Equity$400,000$440,000$484,000$532,400$585,640
Net cash flow from financing activities$400,000$440,000$484,000$532,400$585,640
Net (decrease)/ increase in cash/ cash equivalents-$114,536-$297,158-$134,320$575,991$1,833,128
Cash and cash equivalents at the beginning of the year-$114,536-$411,693-$546,014$29,978
Cash & cash equivalents at the end of the year-$114,536-$411,693-$546,014$29,978$1,863,105

Balance Sheet:

2020A2021A2022F2023F2024F
NON-CURRENT ASSETS     
Item 1$16,000$29,200$43,720$59,692$77,261
Item 2$20,000$42,000$66,200$92,820$122,102
Item 3$28,000$50,000$64,520$75,168$86,881
Item 4$96,000$184,000$256,600$336,460$424,306
Item 5$20,000$42,000$66,200$92,820$122,102
Total$180,000$347,200$497,240$656,960$832,652
Accumulated depreciation$44,267$129,600$250,104$408,231$607,743
Net non-current assets$135,733$217,600$247,136$248,729$224,909
      
CURRENT ASSETS     
Cash-$114,536-$411,693-$546,014$29,978$1,863,105
Accounts receivables$680$3,314$8,087$13,372$21,108
Total current assets-$113,856-$408,380-$537,927$43,349$1,884,214
Total Assets$21,878-$190,780-$290,791$292,078$2,109,122
      
LIABILITIES     
Account payables$25,917$51,167$73,167$98,583$123,000
Total liabilities$25,917$51,167$73,167$98,583$123,000
      
EQUITIES     
Owner’s equity$400,000$840,000$1,324,000$1,856,400$2,442,040
Accumulated net profit-$404,039-$1,081,947-$1,687,957-$1,662,905-$455,918
Total equities-$4,039-$241,947-$363,957$193,495$1,986,122
Total liabilities & equities$21,878-$190,780-$290,791$292,078$2,109,122