Hemp Farm Business Plan Template

Written by Dave Lavinsky
hemp farm business plan template
Table of Contents
Table of Contents

Hemp Farm Business Plan Template

If you want to start a Hemp Farm business or expand your current Hemp Farm, you need a business plan.

The following Hemp Farm business plan template gives you the key elements to include in a winning Hemp Farm business plan.

You can download our hemp farm business plan template (including a full, customizable financial model) to your computer here.


Hemp Business Plan Example

I. Executive Summary

Business Overview

[Company Name], located in [insert location here], is a hemp farm that grows high-quality hemp products. Located on over 160 acres, the farm grows cannabigerol (CBG) strains and cannabidiol (CBD). The Company has some of the latest farming tools and equipment that will help it grow these plants in commercial quantities.

Products Served

[Company Name] will be able to provide customers with high-quality hemp, which includes:

  • Food-grade hemp
  • CBD (which is extracted from leaves and stalks)

Customer Focus

[Company Name] will serve manufacturers and regional distributors, as well as end consumers. The company will reach end consumers via their ecommerce platform.

Management Team

[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [First name] has been a hemp farm operations manager for the past [xx] years.

[Company name] will also employ an experienced sales manager to sell to manufacturers and regional distributors. This will be a skilled salesperson trained in farm sales by [Founder’s Name]. An assistant manager will manage the day-to-day operations of the farm.

Success Factors

[Company Name] is qualified to succeed due to the following reasons:

  • There is currently a high demand for good-quality hemp products in the community. In addition, the company surveyed the local population and received highly positive feedback pointing towards an explicit demand for the products, supporting the business after launch.
  • The Company’s location is within 100 miles of numerous potential customers and contains hundreds of acres of arable land.
  • The Company has the latest farming tools and equipment that will help it grow these plants in commercial quantities with less stress.
  • The management team has a track record of success in the hemp farming business.
  • The Hemp business is a proven business and has succeeded in communities throughout the US.

Financial Highlights

[Company Name] is currently seeking $400,000 to start the company. Specifically, these funds will be used as follows:

  • Land and Equipment: $250,000
  • Working capital: $150,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Top line projections over the next five years are as follows:

Financial SummaryFY 1FY 2FY 3FY 4FY 5
Revenue$560,401 $782,152 $1,069,331 $1,379,434 $1,699,644
Total Expenses$328,233 $391,429 $552,149 $696,577 $776,687
EBITDA$232,168 $390,722 $517,182 $682,858 $922,956
Depreciation$7,000 $7,000 $7,000 $7,000 $7,000
EBIT$225,168 $383,722 $510,182 $675,858 $915,956
Interest$6,016 $5,264 $4,512 $3,760 $3,008
Pre Tax Income$219,152 $378,458 $505,670 $672,098 $912,948
Income Tax Expense$76,703 $132,460 $176,985 $235,234 $319,532
Net Income$142,449 $245,998 $328,686 $436,864 $593,416
Net Profit Margin25%31%31%32%35%


II. Company Overview

Who is [Company Name]?

[Company Name], located in [insert location here], is a new, independent hemp farm focusing on producing high-quality products for its clients. Located on over 160 acres, the farm grows cannabigerol (CBG) strains and cannabidiol (CBD). The farm-grown hemp contains no THC, but the plant can be used for its CBD properties, which provide pain-killing, anti-inflammatory and digestive help without producing a high. [Company Name] is fully equipped with the latest technology and equipment used in the hemp farming industry.

[Company Name]’s History

[Founder’s Name] is an entrepreneur with a passion for hemp farming who seeks to cater to the needs of people through modern hemp farming. [Company Name] will become a recognized hemp farming company in [Location] offering high-quality hemp produce.

[Founder’s Name] has selected an initial location and is currently undergoing due diligence on each property and the local market to assess the most desirable location for a hemp farm.

Since incorporation, the company has achieved the following milestones:

  • Developed the company’s name, logo, and website
  • Determined equipment and inventory requirements
  • Began recruiting key employees with experience in the hemp farming industry

[Company Name]’s Products

[Company Name] will be able to provide customers with high-quality hemp, which includes:

  • Food-grade hemp (which may be consumed in raw or roasted form, or pressed for oil and milk)
  • CBD (which is extracted from leaves and stalks)


III. Industry Analysis

[Company Name] competes against large-scale hemp producers and companies in the US. Since the legalization of hemp, over 30 states have licensed hemp farms, nearly 17,000 state hemp licenses have been issued, and more than 500,000 acres of hemp have been licensed nationally. The US industrial hemp market was estimated at $1.9 billion and will grow at a CAGR of 21%.

The market is gaining high momentum as several application industries are adopting the use of hemp products owing to its benefits. Players involved in the market produce variable quantities and qualities of industrial hemp as well as variants, in terms of seed size and oil composition.


IV. Customer Analysis

Demographic Profile of Target Market

[Company Name] will primarily serve manufacturers, and regional distributors, along with end consumers of hemp products. Distributors and manufacturers of hemp produce in the region see growth in interest in hemp products and need such ingredients for suppliers. These businesses typically gross from $5 million to $50 million in annual revenues and source their supplies from within a 100-mile radius of their facilities.

The precise demographics of the town in which the business is located is as follows:

SpringdaleWyndham
Total Population26,09710,725
Square Miles6.893.96
Population Density3,789.202,710.80
Population Male48.04%48.84%
Population Female51.96%51.16%
Target Population by Age Group
Age 18-243.68%3.52%
Age 25-345.22%4.50%
Age 35-4413.80%13.91%
Age 45-5418.09%18.22%
Target Population by Income
Income $50,000 to $74,99911.16%6.00%
Income $75,000 to $99,99910.91%4.41%
Income $100,000 to $124,9999.07%6.40%
Income $125,000 to $149,9999.95%8.02%
Income $150,000 to $199,99912.20%11.11%
Income $200,000 and Over32.48%54.99%

Customer Segmentation

The Company will primarily target the following customer segments:

  • Regional Distributors: Regional distributors source hemp products from small and medium hemp farms, and sell them to manufacturers who process, package and sell the products.
  • Manufacturers: Small manufacturers that process hemp produce work directly with local farms to keep costs low whenever possible.
  • End-consumers: The Company will sell it products to this segment, who have a valid hemp license and reside within 100-mile radius of the farm.


V. Competitive Analysis

Direct & Indirect Competitors

Hemp Farms USA
Hemp Farms USA is one of the large-scale hemp producers in the US, owning a 12,000 ha area for agriculture. It has long-standing partnerships with leading FMCG and pharmaceutical companies and has thrived in the business for the past 10 years. It also has automated equipment and machines, which helps in improving its operations and reducing costs. Hemp Farms USA has many contracts with large manufacturers and wholesalers.

Hemp Land
Hemp Land was established in 1995 and is a very well-known company that provides good quality hemp products to companies. It majorly targets local companies and retailers. Moreover, it has a very good brand value, and its product packaging is second to none. Hemp Land is located in [location], and it has a very effective distribution and supply chain network.

Hempalot
Hempalot has been a CBD hemp producer for over 10 years. Hempalot is now one of the ten largest Hemp producers in the US. The Company’s packaging and processing units are located in [location]. It has recently acquired two hemp farms with a very high production capacity. With this acquisition, Hempalot has also joined the elite hemp produce club, which has already made its foray into the hemp plantation business. However, Competitor 3 does not produce other hemp products and focuses on CBD only.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include:

  • Management: The Company’s management team has xx years of business and marketing experience that allows them to market and serve customers in an improved and sophisticated manner than the competitors.
  • Relationships: Having lived in the community for xx years, [Founder’s Name] knows all the local leaders, media, and other influencers. As such, it will be relatively easy for [Company Name] to build brand awareness and an initial customer base.
  • Quality products at affordable pricing: The Company will provide quality products at affordable pricing, as it has high-quality equipment and uses the latest techniques.
  • Location: [Company Name] will be able to service the entire metropolitan area of [company location] and its surrounding areas.


VI. Marketing Plan

You can download our hemp farm business plan template (including a full, customizable financial model) to your computer here.

The [Company Name] Brand

[Company name] seeks to position itself as a respectable, upper-middle-market competitor in the hemp production industry. Customers can expect high-quality raw products with affordable pricing and excellent packaging.

The [Company Name] brand will focus on the Company’s unique value proposition:

  • Efficient and Effective Delivery network
  • Good Packaging
  • Quality products at affordable pricing
  • Providing excellent customer service and customer experiences

Promotions Strategy

[Company Name] expects its target market to be distributors, manufacturers and end-consumers. The Company’s promotions strategy to reach the audience includes:

Advertisement
Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The Company will advertise its company offerings in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.

Public Relations
[Company Name] will hire an experienced PR agency/professional(s) to formulate a compelling PR campaign to boost its brand visibility among the target audience. It will look to garner stories about the company and its services in various media outlets like television stations, radio shows, etc.

Social Media Marketing
Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The Company will use social media to develop engaging content in terms of various forms and technologies of hemp farming and post customer reviews that will increase audience awareness and loyalty.

Yellow Page Marketing
The Company shall announce details about its presence and services in the yellow pages and other local directories to keep readers informed about the company’s various products. The purpose of yellow pages is to maintain a directory of the business records in alphabetical order.

Pricing Strategy

[Company Name]’s pricing will be moderate, so customers feel they receive great value when availing of the hemp products. Pricing will be about 50% lower than retail prices to allow wholesalers and retailers to earn their margins.


VII. Operations Plan

Functional Roles

The assistant manager will run the day-to-day operations of the farm, including scheduling and assigning the work of farmhands, sourcing and purchasing supplies and basic equipment, keeping the company’s books, maintaining legal licenses, handling insurance, and ensuring that the company meets government regulations.

Additional roles required include farm hands, packaging and maintenance personnel.

Milestones

[Company Name] expects to achieve the following milestones in the following [] months:

DateMilestone
[Date 1]Finalize lease agreement
[Date 2]Design and build out [Company Name]
[Date 3]Hire and train initial staff
[Date 4]Kickoff of promotional campaign
[Date 5]Launch [Company Name]
[Date 6]Reach break-even


VIII. Management Team

Management Team Members

[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [First name] has been a farm operations manager for the past [xx] years. [Founder] graduated from the University of ABC, where he majored in Arts.

[Company name] will also employ an assistant manager to manage operations. This will be an experienced operations manager who will be trained in farm operations by [Founder’s Name]. Furthermore, a sales manager will be hired to focus on marketing, sales, and customer service to distributors, manufacturers, and end-consumers for [Company Name] products. These two individuals will either have undergraduate business degrees or years of relevant operations or sales experience.

Hiring Plan

[Founder] will serve as the CEO. To launch the hemp farm, the company will need to hire the following personnel:

  • Farmhands [Number]
  • Logistics and Supply Chain Manager [Number]
  • Assistant Manager [Number]
  • Sales Manager [Number]


IX. Financial Plan

Revenue and Cost Drivers

[Company Name]’s revenues will come from the sale of hemp products to its customers.
The major costs for the company will be the cost of land and equipment, as well as staff salaries. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.

Capital Requirements and Use of Funds

[Company Name] is currently seeking $400,000 to launch its company. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses, and working capital. Specifically, these funds will be used as follows:

  • Land and Equipment: $250,000
  • Working capital: $150,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Key Assumptions

The following table reflects the key revenue and cost assumptions made in the financial model:

Acreage for Crops300
Number of customers per month
FY150
FY275
FY3100
FY4125
FY5150

 
5 Year Annual Income Statement

Year 1Year 2Year 3Year 4Year 5
Revenues
Product/Service A$151,200 $333,396 $367,569 $405,245 $446,783
Product/Service B$100,800 $222,264 $245,046 $270,163 $297,855
Total Revenues$252,000 $555,660 $612,615 $675,408 $744,638
Expenses & Costs
Cost of goods sold$57,960 $122,245 $122,523 $128,328 $134,035
Lease$60,000 $61,500 $63,038 $64,613 $66,229
Marketing$20,000 $25,000 $25,000 $25,000 $25,000
Salaries$133,890 $204,030 $224,943 $236,190 $248,000
Other Expenses$3,500 $4,000 $4,500 $5,000 $5,500
Total Expenses & Costs$271,850 $412,775 $435,504 $454,131 $473,263
EBITDA($19,850)$142,885 $177,112 $221,277 $271,374
Depreciation$36,960 $36,960 $36,960 $36,960 $36,960
EBIT($56,810)$105,925 $140,152 $184,317 $234,414
Interest$23,621 $20,668 $17,716 $14,763 $11,810
PRE-TAX INCOME($80,431)$85,257 $122,436 $169,554 $222,604
Net Operating Loss($80,431)($80,431)$0$0$0
Income Tax Expense$0$1,689 $42,853 $59,344 $77,911
NET INCOME($80,431)$83,568 $79,583 $110,210 $144,693
Net Profit Margin (%)-15.00%13.00%16.30%19.40%

 
5 Year Annual Balance Sheet

Year 1Year 2Year 3Year 4Year 5
ASSETS
Cash$16,710 $90,188 $158,957 $258,570 $392,389
Accounts receivable$0$0$0$0$0
Inventory$21,000 $23,153 $25,526 $28,142 $31,027
Total Current Assets$37,710 $113,340 $184,482 $286,712 $423,416
Fixed assets$246,450 $246,450 $246,450 $246,450 $246,450
Depreciation$36,960 $73,920 $110,880 $147,840 $184,800
Net fixed assets$209,490 $172,530 $135,570 $98,610 $61,650
TOTAL ASSETS$247,200 $285,870 $320,052 $385,322 $485,066
LIABILITIES & EQUITY
Debt$317,971 $272,546 $227,122 $181,698 $136,273
Accounts payable$9,660 $10,187 $10,210 $10,694 $11,170
Total Liabilities$327,631 $282,733 $237,332 $192,391 $147,443
Share Capital$0$0$0$0$0
Retained earnings($80,431)$3,137 $82,720 $192,930 $337,623
Total Equity($80,431)$3,137 $82,720 $192,930 $337,623
TOTAL LIABILITIES & EQUITY$247,200 $285,870 $320,052 $385,322 $485,066

 
5 Year Annual Cash Flow Statement

Year 1Year 2Year 3Year 4Year 5
CASH FLOW FROM OPERATIONS
Net Income (Loss)($80,431)$83,568 $79,583 $110,210 $144,693
Change in working capital($11,340)($1,625)($2,350)($2,133)($2,409)
Depreciation$36,960 $36,960 $36,960 $36,960 $36,960
Net Cash Flow from Operations($54,811)$118,902 $114,193 $145,037 $179,244
CASH FLOW FROM INVESTMENTS
Investment($246,450)$0$0$0$0
Net Cash Flow from Investments($246,450)$0$0$0$0
CASH FLOW FROM FINANCING
Cash from equity$0$0$0$0$0
Cash from debt$317,971 ($45,424)($45,424)($45,424)($45,424)
Net Cash Flow from Financing$317,971 ($45,424)($45,424)($45,424)($45,424)
SUMMARY
Net Cash Flow$16,710 $73,478 $68,769 $99,613 $133,819
Cash at Beginning of Period$0$16,710 $90,188 $158,957 $258,570
Cash at End of Period$16,710 $90,188 $158,957 $258,570 $392,389

 

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