Are you looking to enter the rapidly expanding legal cannabis industry? There are many ways to get involved and share in the excitement: investing, employment, ancillary services, and starting your own business, to name a few.
In this column, I will focus on those interested in starting their own business. Whether you are an established industry expert with years of cultivation or manufacturing experience, or you are just entering the market, there are many things to consider as you make your dreams your reality.
It is important for everyone to realize the huge shift in the status quo as the market comes above board. Not only will consumer demands continue to vary, but governmental regulations and oversight will forever evolve and place the ongoing burden on business owners to stay up to date. Such factors introduce a number of new challenges outside of simply making a great product or service and offering it for sale.
I routinely get asked what it takes to start a business in our industry, so I will provide a high-level oversight of areas to consider. I see two major areas to evaluate when looking to become the boss, both the business side and personal side.
Major business points to consider before entering the cannabis market as a business owner include:
Business Planning: There are many online tools, both paid and free, to help you create a solid business plan. This step is important not only to help attract investors but to provide a foundation of what you want to achieve, and how you plan on achieving it.
Compliance: Our industry is now fraught with more governmental oversight than possibly any other industry in the country. Maintaining compliance with laws and regulations at all levels of government, not only now but as they evolve in the future, is crucial to success in the industry.
Financial: Do you have funding secured for your business? Have you detailed out not only required start-up capital, but an operational budget to help you survive the initial months before revenue? Having a solid financial plan is necessary for any start-up in any industry and we are no different.
Networking: Possibly the most important aspect of a successful cannabis business, after product, is networking. The task of connecting all the dots required for your business to succeed helps separate successful business owners from those that fail. Having the complete pipeline in place before you begin will not only help you succeed, but also ease stress, allowing you to focus on your operations. Look to network with those that have an eye for the future, not just the present.
Business Partners: Selecting the right business partners is such a crucial component. Communication is key in this sphere. Ensure each partner knows their respective role and what is expected of them. It is important to put your agreement in writing, making the organizational operating agreement the single most important business document for any small business.
Strategic Partnerships: Aligning with other organizations that share the same vision as your business can be the difference between make-it or break-it. Begin to think about this early and often, reaching out to those you view as industry experts, and ask about their networks and possible partnership opportunities. Where networking helps you plan, partnerships help you achieve.
Specialists: Do not make the mistake of thinking you can handle everything on your own. Identify the areas where you need the most help and seek out specialists. Attorneys, accountants, and consultants may be open to free or low-cost consultations where you can interview them and evaluate if they would be the right fit to help your company succeed. Remember, finding someone who specializes in the marijuana industry can be a huge plus, as our needs can be different than traditional organizations.
Major Personal points to consider before entering the cannabis market as a business owner
Leadership Skills: There are several different styles of good leaders. While they can differ in style, they all share a few irreplaceable skills. Identify what style of leader you are and work to be the best you can be. Embrace your natural disposition here, and choose a style that is comfortable for you, as you will feel more confident.
Confidence: At the end of the day, everyone looks to you for direction and support. You have to be confident in your decisions and direction, so much so that others feed off of it. Confidence breeds success and inspiration.
Emotion Stability: Would your friends and family make this statement about you? If not, identify and evaluate your unique situation. If you lack this trait, begin to problem solve and never be afraid to seek business consulting to assist with stability.
Vision: You, as the business owner, have the final say for both short- and long-term operations. Ensure that you, from day one, not only have internal vision but keep your mind open both to new creative ideas and statistical market trends.
Ability to Recognize Shortcomings: This is a key component to all successful leaders. Self-awareness is of utmost importance to all leading styles. If you feel you cannot do this without bias, work towards the solution you are most comfortable with. The most popular options are: hiring employees to fill in your weak areas; partnering with someone who has complementary skills; and seeking an outside consultant to help identify and solve problems with you as a team.
The list above provides a jumping-off point for planning and beginning your business. As we all see the great potential in our industry, we must lay the foundation on solid business practices as well as take a unique position of openness to pivoting with constant political, regulatory, and market changes. Unique industry planning cannot be underestimated or overlooked.