The cannabis industry is a hotbed of entrepreneurial activity as new markets open and established ones evolve. Cannabis represents a wealth of opportunities for those who are willing to take risks and innovate, from manufacturers who develop new product types to ancillary services that provide a particular expertise to support flourishing cannabusinesses.
However, like any industry, there are many pitfalls that entrepreneurs may succumb to, and there are particular challenges in the cannabis industry to be aware of. Much can be learned from other business owners who have experience which could help new cannabis entrepreneurs succeed.
1. Do your research
As a cannabis entrepreneur, doing your homework is one of the most important steps to take. With the industry still evolving and rapidly changing, it’s critical to stay up-to-date on the latest laws, regulations, and industry trends. Doing your research will not only help you to make informed decisions and avoid costly mistakes but can also give you a competitive edge by helping you identify opportunities in the market. For example, state laws change constantly, and knowing their evolution can help you make savvy, informed decisions about your business.
Resources like the Cannabis World Congress & Business Exposition (CWCBExpo) monthly newsletter, for example, is a great way to stay up-to-date on the latest trends and developments in the industry and connect with other professionals. Other publications, such as Marijuana Moment and Cannabis Business Times, offer valuable insight and information to help you stay informed as well.
“Find out what has worked and what has not worked and, most importantly, find out what the actual rules are in the state that you wish to operate in because they vary from state to state,” says Calvin Frye, owner of genetics company Cloneville and member of Cannabis World Congress & Business Expo’s advisory board.
2. Develop a solid business plan
A roadmap is a must for any entrepreneur in any market, and cannabis is no exception. A business plan serves as your guide forward and is a must for defining your goals, identifying your target market, and developing strategies for financing and growth. The critical elements of a business plan typically include determining your mission statement, conducting market research, developing a marketing strategy, setting goals, and creating financial projections.
Suppose that you are a cannabis cultivator looking to expand your business. A well-crafted business plan would involve determining your target market and your company’s purpose, values, and finances to ensure that expansion is feasible and sustainable in the long term. It can also serve as an important document to present to potential investors to help you raise the capital you need to launch your business.
3. Network early and often
It’s often said that “it’s not what you know, but who you know” that matters in the business world. Building relationships early and often can help you better understand the industry and gain new insights, especially in rapidly-evolving spaces like cannabis. Attending industry events like CWCBExpo, for example, can be a great way to meet other industry professionals and learn from their knowledge and experience.
When networking, remember to be authentic, genuine, and respectful. Focus less on what you can get out of the relationship and instead look for ways you can add value and help others. And don’t forget to bring your business cards or create a digital card!
Other tips for networking success include asking questions and following up with the people you meet. It never hurts to send a quick email or LinkedIn message after the show to stay in touch and continue building your network.
4. Build a strong team
Bringing quality talent into your business early is critical for success. With so much competition and so many regulatory hurdles to navigate, you’ll need a team that can help you execute your vision and stay ahead of the curve. When building a team, look for people who not only share your values but bring unique skills and perspectives to the table. For example, if you’re a cannabis retailer, you may want to seek out team members with experience in customer service or marketing.
Look for people who are passionate about the cannabis industry and be sure to prioritize a positive and inclusive environment. Investing in training and development can also help your team develop and grow and build a culture of continuous learning and improvement. Also consider hiring professional services to support your company. Legal counsel is an absolute must, but financial, marketing, and HR professionals can also augment your team.
5. Embrace innovation
The cannabis industry is constantly evolving, with new products, technologies, and regulatory changes shaping the landscape daily. As an entrepreneur in this space, finding strategies to stay ahead of the curve is essential. Embracing innovation can help you to differentiate your business from the competition, create new revenue streams, and better serve your customers.
Think about virtual reality as an example. A cannabis retailer may explore the use of VR to create immersive in-store experiences and better showcase their product offering to customers. Manufacturers may work to refine consumer favorites or develop totally new types of cannabis products. Whether you’re a cultivator, retailer, or anything in between, staying open to new ideas and being willing to take risks will help position your business for long-term success.
Challenges and opportunities in the cannabis industry
Cannabis entrepreneurs face a unique set of challenges that can make it complicated to operate in this space. So as you begin your cannabis industry journey, be aware of the following:
- Legal and regulatory challenges: Cannabis entrepreneurs face a complex and constantly evolving legal landscape, with different laws and regulations governing the plant at federal, state, and local levels. Navigating these challenges is one of the most important priorities for a cannabis entrepreneur.
- Advertising and marketing restrictions: Cannabis businesses are often subject to strict advertising and marketing regulations, which can limit their ability to reach their target audience and build awareness. These restrictions include traditional and digital advertising limitations, from billboards to social media promotion.
- Stigma and social acceptance: Despite growing acceptance and legalization of cannabis, there is still a significant amount of stigma associated with the industry. These barriers can limit public support for cannabis businesses and restrict access to certain services.
- Limited access to traditional business resources: Due to the unique challenges faced by cannabis businesses, entrepreneurs may have limited access to conventional business resources such as banking, loans, networking opportunities, and mentorship programs.
With great challenges, however, come great opportunities for growth and positive social change. Whether it’s through supporting medical research or advocating for legalization, entrepreneurs navigating the complex landscape of cannabis have the chance to make a difference in the lives of others. So while the challenges are significant, the potential rewards are even greater.
“It’s never been a more interesting or exciting time for the cannabis industry in the Northeast,” said Kelley Crosson, owner and president of KC Inc. “There is space for everyone in this ever-changing market. ‘Find your focus’ is probably the best advice I can give at the moment.”
Taking the right steps
Being a successful cannabis entrepreneur requires passion and determination. Luckily, resources like CWCBExpo provide an opportunity to connect with other entrepreneurs, learn about new technologies and products, and stay in the loop on the latest industry trends. Attending our in-person expo and reading our blog can help you to build relationships and stay ahead of the curve in this exciting industry.