To become a successful cannabis business, you will need to hire a team of experts. These experts will provide you with the key ancillary services to help ensure you are prepared and on track for success. It will cost you tens of thousands of dollars, perhaps over $100K, to hire the ancillary experts you will need just to get started.
The cannabis industry is experiencing exponential growth and you’re considering opening up a cannabis dispensary. Before you do anything else, we strongly encourage you to start writing a cannabis dispensary business plan. Having a well written business plan is an essential component for state licensing. It can also help you attract investors and other key members of your management team. Statistics show that entrepreneurs in other industries who have written a business plan are twice as likely to grow their business and secure funding as those with no business plan. Being meticulous about every detail in your business plan will maximize your chances of getting approved for a cannabis business license. You might consider hiring an experienced cannabis consultant to ensure that your business plan is as detailed, concise and well organized as possible. Skipping any steps or presenting potential investors with the first draft of your business plan could potentially be detrimental to the success of your cannabis business.
One of the most important elements to consider in cannabis cultivation is water efficiency. With droughts ravaging California and a host of bureaucratic regulations in just about every state that has legalized marijuana (including California), it is important for cultivators to be well informed on water issues. This includes information about water quality, the quantity being used as well as the source of your water supply.
So you’re considering getting into the cannabis business. To help you with your initial research, we compiled sales data and trends from states reporting the highest recreational cannabis sales in 2017. Note: We included California, as recreational cannabis is now legal (for adult use only) as of January 1, 2018. It’s highly likely that California will become the largest recreational cannabis market in the world in 2018.
Canada began their cannabis legalization journey over 16 years ago when the first medical marijuana laws were passed. Recreational cannabis legalization has been a priority since Prime Minister Justin Trudeau took office in 2015. Canadian lawmakers are optimistic that 2018 will mark the beginning of legal recreational cannabis sales in their country. Observing our neighbor to the north as they take this step may influence U.S. lawmakers and citizens to change their perspective on cannabis as well. Recently, a Gallup poll found 64 percent of Americans support legalizing cannabis for medical and recreational use, an increase over just one year ago, when Pew Research found 57 percent of Americans support marijuana legalization. U.S. support of nationwide legalization will continue to grow as it has ever since Colorado became the first state to legalize recreational cannabis. As Canada takes the lead in national legalization U.S. lawmakers, business owners, investors and medical doctors have much to learn from their successes and failures in the years to come.
Advertising cannabis, like advertising other regulated products such as alcohol, comes with its own caveats and rules. As states legalize medical and recreational cannabis, government officials must decide what constitutes safe and accurate advertising. At the top of the list is who cannabis advertising should be marketed to (adults over the age of 21) — and who it shouldn’t be marketed to (children and teens).
The California state legislature accepted the voter initiative Proposition 64 in November of 2016. This initiative, also known as the Control, Regulate, and Tax Adult Use of Marijuana Act, legalized recreational cannabis use for Californians over the age of 21. It also implemented regulations and standards for the state’s commercial cannabis market, and introduced new guidelines for cannabis advertising. Business owners in California must comply with standards set forth by the proposition when advertising and marketing their cannabis business.
Have you ever walked into a dispensary, medical or recreational, only to find that the budtenders are less than educated on their products? Worse, have you ever hired a budtender and found out they were going against company policy or state law in your dispensary? Informed and ethical budtenders are the key to professionalism, repeat customers, and the safety of your cannabis business. Do your best to ensure that your budtenders are doing their jobs and helping to educate your customers on the potential benefits of your cannabis products and the differences between various strains and product types. While you might think that sales and marketing are the keys to running a successful dispensary, your customers will come back time and time again if they feel valued and that your business knowledge is top tier.
Updated April 25, 2018
Cannabis laws in California have been growing and evolving at a rapid fire and frenzied pace. In 2017, you may have seen Cheech Marin’s public service announcement regarding the launch of Cannabizfile Online Cannabis Business Portal. Since then, it’s become the wild west throughout the state of California as cities and counties have either chosen to embrace cannabis businesses or to ban marijuana from their towns completely. Here are a few things cannabis entrepreneurs, business owners, clients, patients, and the public should know about location, construction, owner restrictions, local regulations, and security requirements for both existing and future cannabis businesses.
As more and more cannabis consumers are purchasing extracts, processors are continuously striving for better and safer extraction methods. While various extraction methods still exist, the current winner seems to be supercritical CO2 extraction for cannabis products.
Supercritical CO2 extraction involves using controlled temperature and pressure to create phase (or state of matter) changes in CO2 (carbon dioxide) for the purpose of extracting cannabis plant material while maintaining the integrity and amounts of terpenes found in the plant material. At the same time, it protects cannabinoids from decarboxylation during the extraction process. The phase changes (for example, from gas to liquid) in CO2 allow you to separate out plant material of different weights during the extraction process.
Just like any other industry as cannabis companies mature, valuable collaborations become apparent and big businesses enter the space. Mergers and acquisitions (M&A) are already happening in the cannabis industry and more cannabis business mergers and acquisitions are inevitable in the near future. Case in point, in October, 2017, Constellation Brands purchased a 10% stake in Canopy Growth Corporation for $191 million. Constellation Brands owns Corona and other beer brands. Canopy Growth Corp. sells medical marijuana in Canada and is planning to sell it for recreational use as soon as it becomes legal there in the summer of 2018. According to a recent article, “Canada’s cannabis players are looking to mergers to scale up and stave off competition.”
There is strong interest among pharma, agricultural and tobacco businesses to enter the cannabis market. In the U.S., however, federal law is currently keeping the majority of these large businesses on the sidelines. Cannabis businesses in the U.S. have a unique opportunity to prepare for potential mergers and acquisitions that will certainly get underway as soon as federal regulations allow.