When it comes to small business opportunities these days, few sentences give people the old dollar sign eyes more than “legal cannabis”.
From states like Michigan, where it’s legal for both medicinal and adult use, to places like South Carolina, where legalization has been a popular topic for ballots and voters, cannabis is slowly becoming one of America’s largest corporations.
Needless to say, Investopedia reports that (as of November 2020) over 340,000 American jobs were devoted to handling assets at various stages of the retail cycle, and the industry was valued at over $ 13 billion by 2019.
Not bad for a facility that is still technically illegal under federal law, right?
If you’ve read this far, it probably means you are hoping to be among the lucky ones who can make it rich with their own cannabis business. A noble endeavor, but are you really ready to make a name for yourself? In an area that can be as competitive – and at times complicated – as cannabis, you really need to use your best foot forward and make sure you are as well prepared as possible for the various challenges of a relatively new industry.
With that in mind, below is a list of the five things to check and make sure you actually have access to them before starting your new business.
The right shelves and equipment
You often see this with smaller companies as well as “independent producers”. A lot of people assume they can just buy some greenhouse shelves, line the walls of their store with them, and call it a day, right?
Offering rare or unique strains of cannabis is a great way to differentiate yourself
This approach often leads to problems. Even beyond the inherent concerns of helping your plants grow safely (and productively!), The type of equipment you use should reflect the type of business you intend to do. For example, a cannabis retail store will need different types of shelves and tables than a pharmacy or add-on facility because the work done is completely different.
It’s going to take a little research, but it helps that many companies these days offer shelves specifically designed for various cannabis operations. Check to see if any of the major warehouse suppliers in your area have already gotten into the cannabis game – Shelving Inc, Metro, and Rack & Shelf are some of the bigger shelves of cannabis offerings right now.
Gone are the days when all you needed to be successful with cannabis was a stall in the shady flea market, a pun name, and a large “Head Shop” sign to ditch the authorities.
Far too many cannabis companies start a business plan headfirst without thinking of a good name or just settling for the first one they think of. Given that the field of play is always crowded, it can honestly be worth paying someone to help you develop a decent logo and branding. This goes a long way in making you stand out from all others with a green font. Places on the internet like High Hopes have these services specifically for cannabis companies so you know they can find out what you’re about faster.
An understanding of your customer base
The exact type of work your cannabis business does will affect your potential customer base – and vice versa.
Brands are increasingly relying on contemporary design
At the beginning of the planning phase, make sure you figure out exactly who you are going to sell your products to as this will affect almost every other decision your company makes. Do you want to sell directly to the customer or work as a distributor for CBD / cannabis retail stores? Are you ready to manage and run your own business, or will you just rent storage space to sell your plants to other retailers? If so, do you know which companies in your area you could work with? Or do you know how many other cannabis companies could be in your desired geographic area if you wanted to step into retail? Finding an audience may be the hardest part of starting a business, but it’s an important job.
Banking that understands your industry
Perhaps the biggest downside to an industry comparatively new like cannabis is that many of the old ways of doing business are not entirely available to you. Many financial institutions of various sizes are limited in the ways they can help fund cannabis businesses. You don’t understand the regulations and needs of your industry, and you can’t help cannabis companies with banking at all.
Finding the right banking services can be a challenge
It can be beneficial to check with banks, credit unions, or finance companies in your area that specifically provide banking services (such as business accounts and the like). Some examples are Aery Group from New Mexico or Seed to Sale in Michigan. (It’s important to note that due to different government regulations, many of these companies, such as Aery Group, can only serve the state they’re located in. Check ahead of time to see if you can find a location that works for you can help! )
Knowledge of the necessary licensing and regulatory requirements
Obtaining a license to open a business is tough on a good day, but for an industry as diverse and diverse as cannabis, licensing can take a lot of homework.
Even if you’re lucky enough to open a business in a state where cannabis can be sold, the licensing process can vary greatly from state to state. In New Mexico, for example, it can take months to get a license just based on the paperwork, research, and filings required to cement your business. Before going too far down the rabbit hole to start your business, it is a good idea to take the time it takes to fully research and understand the various local and state regulations that you must comply with in order for your business to be Can start operation.
Of course, there will be many other hurdles and requirements associated with starting a business – but if you remember these five things, you will have a much better start than many others.