As cannabis laws continue to change around the world, a plethora of opportunities have opened up for professionals who are considering starting a legal cannabis business. The marijuana industry is appealing to many entrepreneurs as it offers a largely untapped legal market with a well-established customer base. But in order to be one of the successful few to enter this growing market and be granted a cannabis business license (as well as to scale and grow your operations over the long term), there are a number of things you need to consider and plan for from the beginning. To make sure you are well-prepared to apply for a cannabis business license, consider the following questions:
Just like any business it takes a diversity of skill-sets and knowledge to operate successfully. It’s important for business owners to honestly assess themselves and their team and make sure that they have all the bases covered. For example, individuals that have specialized experience in cannabis cultivation will benefit greatly from partnering with those that have experience in business and legal compliance. Similarly, entrepreneurs with strong business acumen will likely benefit from partnering with or employing individuals with cannabis-specific knowledge and experience. In order to increase your chances for success after you are granted a cannabis business license, your business will need individuals that possess both high-level business experience as well as cannabis-specific or commercial agriculture experience.
There is a tremendous diversity of potential products and services to offer within the cannabis industry ranging from flower to specialty extracts to product distribution. Focus your efforts and take the time to thoughtfully develop your offerings. How are your offerings unique? Start simply with just a few products or services and spend the time and financial resources to ensure that whatever you are providing is the best you can possibly offer. Expanding into too many offerings too quickly will only lead to subpar products and services and therefore be an unstable foundation for your business.
You need customers for your business just like humans (and the vast majority of other life forms on this planet) need oxygen. Without customers you will not be in business very long. Knowing specifically who your customers are provides valuable insight into how to plan your marketing efforts and assess the viability of the specific market you wish to enter. Important questions to ponder include: Will you be serving other businesses or selling directly to the end consumer? What are your customer demographics? Are they medical cannabis patients or recreational users? Considering the cannabis laws in your state (or country), how many potential customers are currently available? Is the market likely to expand? The more you know about your ideal customer the more you can tailor your offerings to meet their needs.
In the marijuana industry first and foremost you are a compliance company that has been granted a cannabis business license which allows you the privilege to grow, manufacture and/or distribute cannabis products. That being said, thoroughly understanding the state and local laws which you are required to operate within is of utmost importance. You can have the best idea for a product, a qualified team, and a well written business plan but if your real estate fails to meet local regulations you’re out of business before you ever got started because you will be denied a cannabis business license. We recommend that you not only meet all state and local regulatory standards but also all federal standards (where applicable). Technically federal regulations do not yet apply to our industry but by exceeding USDA, FDA and OSHA standards from the beginning you are effectively future-proofing your company and ensuring the safety of your employees and customers.
The cannabis business application process requires thorough planning and immaculate attention to detail. Teaming up with an experienced consultant who has navigated the application process many times before is highly valuable. Cannabis business consultants can review and help you develop the foundation of your business through articulation documents, pitch decks, and financial models. Compliance-oriented consultants will ensure that your business adheres to all local and state laws and is prepared to navigate changes in legislation into the future. Structuring your business properly from the beginning will likely make the difference between having a profitable cannabis company or joining the majority of cannabis entrepreneurs who have seen their businesses fail in the space.
Once you have a thorough understanding of your business’ offerings, your team, your customers and your state and local laws you are prepared to begin the cannabis business application process. Congratulations! At this point, teaming up with an experienced cannabis industry consultant is invaluable to assess the viability of your business plan, refine your business’ structure and standard operating procedures, select compliant real estate, navigate raising capital, and complete your cannabis business application on-time. Together we can create responsible businesses that will safely serve our customers and turn a profit.
Are you planning to start a cannabis business in the near future?