Whether you are thinking about starting a cannabis business or have a successful fully operational enterprise already; creating the best possible business operations for a marijuana touching business takes time, effort and unfortunately money. However, if you create a seamless operation that is prepared for hurdles and is able to grow at a good pace. While still maintaining the same values and ethics from the beginning of your business onward will ensure the success that many business owner’s desire. The main aspect of successful cannabis business operations is creating a concrete foundation. Establishing that whoever enters, whether as an employee or a regulator, can see that you are putting in the effort to have a compliant business. Creating this foundation means having a fruitful company culture, a well-established business model and a supply chain that you know will run smoothly.
When these operations are put into motion you as a business owner know there are other important issues that will take up your time and energy. Building a foundation that assures the trustworthiness of your product and brand means that you will succeed. Having a compliant facility and being constantly up to date on the state and federal regulations means audits and relations with regulators in your state will always help in the long run.
Lay The Foundation
Given the Current State of the Cannabis Industry it’s important to understand what niche has a large amount of potential parallel to what you are passionate about. If you aren’t passionate or interested in your niche and just in it for the money, there will not likely be long-term success. Start by deciding what kind of business you want to be within the marijuana industry. What are you most passionate about? What sector of the cannabis market do you want to cater to? Whether it be creating a product such as edibles to sell to the public or testing equipment and chemicals for laboratories. Knowing where you want to be in the industry and how to excel in that sector is essential.
Also remember that cannabis business operations differ from other industry’s business operations simply due to the continual change and gray area of cannabis legality. One of the best ways to create a strong and stable business operations in this turbulent market is to understand where your passion is within the industry. Then to understand how that passion interacts with the legality of your states current market.
Create A Team of People You Trust
Having a team you can trust is part of creating your foundation. The people that make up your business are not only your brand but your peace of mind. Creating a company culture starts at the beginning and the first few employees you have. Beginning with verified experts that have knowledge in whatever sector your business is in along with a quality team that instills a brand of high excellence gives you the authority to back up product standards and claims. However, have a mix of employees you can trust and fit the culture of your company. You don’t always need/can afford the experts.
Loyalty is a strong trait to have, especially in this industry. So having employees of good character and reliability are a vital component. You can always train employees on your business daily operations but having staff that knows and understands the values of your company gives you the mental freedom to focus on the business at a higher level. Your trusted employees can smoothly run daily interactions.
Also local employees that know and understand the climate of the cannabis market in your area adds an edge to your business. If you can succeed in your local area, you will know what works and what doesn’t. Allowing you then to expand beyond the local market. Having a trustworthy brand in your local area means you can test and try out new products, branding, or marketing tactics. See what works and what doesn’t to then take to a larger scale.
Decide On A Business Model
Next is What are the keys to a successful business operations? After understanding what niche, you want your business to be a part of and a solid team standing behind you. You need to write up a business model so everyone understands the business daily operations. Not only for investors, but for yourself and employees. As you continue to market and expand your brand you need to be able to explain and advocate for your business as a whole. Decide where you fall within a plant-touching or ancillary business and write out as through business plan as you can.
For example, as a plant touching business, you are required to be licensed by your individual state. Knowing where you are along the supply chain and how you are going to excel in that sector as a business can influence how you write up your plan. Try to think through as much as you possibly can of the different aspects of operations. Knowing how your product will interact with your supply chain throughout. If you are an ancillary business, or a non-plant touching business, and provide products or services to support the industry you more than likely will need a business license to operate in good faith.
Continuing to encourage and create a trustworthy supply chain for the entire cannabis industry is paving the way for success as we move forward. Creating success not only for yourself but the industry as a whole. If unsure on how to write a business plan check out this article here for a great starting point.
Quality is an incredibly important part of cannabis business operations. Creating high standards wherever you fall on the supply chain instills a trust with customers. While taking away the stigma that is still unfortunately associated with this industry. Make sure you are compliant within whatever state and federal regulation you are in. Cannabis business operations need verified vendors that distributors can trust. Knowing every aspect of the supply chain your business touches is legit and dependable is imperative. Not utilizing verified vendors could put your business in a very dangerous place. This industry is littered with horror stories of products being sold to consumers that contained heavy metals or other unknown substances. Simply because they did not use verified vendors throughout their supply chain.
One of the main reasons for the creation of The Canna Consortium is to ensure that those continuing in the cannabis industry know the reliable and legitimate businesses to use throughout the supply chain. Having information sources such as ours provide reliable references to businesses and vendors in the industry. These companies can provide the best and highest quality outcome and products.
Trusted vendors also: “prevent the risk of a data breach caused by third-party security, ensure product consistency, allow you to scale operations effortlessly through efficient supply chain management, implement rigorous quality control with a defined standard operating procedure, resolve technical issues faster and accurately, benefit from an experienced management team capable of providing high-level strategy and maintain quality control standards and compliance with federal requirements.” Always make sure to verify your vendors to create the best and highest-achieving operations.
Implement Your Cannabis Business Operations
Now that you have everything created and set up to flow smoothly. Utilizing high quality trusted vendors, products, and a team. It’s time to start doing the dang thing. Have a soft opening of your business to try and find possible hiccups and issues before you officially go live to your target audience. However, we know that of course it won’t run smoothly, when does it ever? So, you have to always be aware and prepared for hiccups along the way. One of the best ways for understanding issues that might arise is Understanding The Cannabis Business Supply Chain. Since this industry is so new, the solidity of the supply chain is not there. Not to mention the aftershock of the pandemic that has thrown a wrench in most established supply chains.
Having multiple different vendors and knowing where your raw materials are coming from can make implementing your business easy. And works to avoid a complete halt in your business operations. Understand and know the appropriate KPI’s (Key Performance Indicators) to measure your companies’ performance. Keep in mind the size of your business. Including square footage, equipment, and number of employees for how to measure your success and percentage of growth. Depending on being an ancillary vs. retail facing business your measured growth can be impacted by time, season, and material cycles. Both on the regulatory standpoint and current trends help to foster innovation within your business operations. Which can aid you in finding efficiencies in places you wouldn’t normally see.
Perform Routine Audits to Find Pain Points
Now that you have a successful business running, there is a continually need to perform routine audits to find pain points and inefficiencies. Especially in the cannabis industry, audits and having consultants come in to do compliance checks ensures you are always staying within current state and federal regulations. Also, making sure to have federal certifications and well-written SOP’s is a good practice that helps establish your brand as a trusted source. Checking in with companies like Allay Consulting and the Cannabis Certification Council not only ensure you have the proper certification for authoritative bodies such as the FDA, FTC and OSHA. But continuing to check in is one of the best ways to present your brand and upgrade your business to the highest degree.
Also striving for utilizing sustainability practices such as getting a Green Business Certification or implementing and supporting racial equity programs in your community. The cannabis industry has had too close of a relationship with the war on drugs in the past. Which means eradicating the stigma associated with cannabis will take a village not an individual. Make sure to continually check in with what your business is representing in your community. What is helping or hurting and how you can continually grow and aid this industry. Performing audits and finding pain points not only allows for a more efficient and compliant business but also fosters modernization and innovation. Which in turn creates a more inclusive and therefore successful business.
Business operations that work and are successful let you know your business runs efficiently. Cannabis is, and will continue to be a booming industry in the next decade. Setting yourself up for success now can ensure your long-term growth and profit. While establishing yourself and business as an expert can only benefit the industry going forward. Make sure to always be aware of where you are in the supply chain. Know where your raw materials are coming from and what your product interacts with from production to end consumer.
A successful and supportive village surrounding you means the advancement and trust of not only your business but the industry. This trade’s daily business operations differ from other industries because of the needed self-regulation. With constantly moving laws and at time difficult supply chains, having the business intelligence to operate successfully and avoid legal liabilities makes the cannabis industry difficult to enter. But the pay off is high if you succeed.
Cannabis is one of the new frontiers in both the medical and recreational market. We hoped the following post helped give you some tips and tricks in how to succeed within this industry. Removing the stigma associated with this substance is one of the keys in creating a national level market. Having solid, verified business operations that encourage high quality and safety to all consumers is one of the best ways to raise the industry as a whole.
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Teagan is the Communications and Engagement Manager for 710Spirits® and Rocky Mountain Reagents. While continually learning about the cannabis industry and all the possibilities it has to offer she creates content for The Canna Consortium both for blog posts and social media. Make sure to check out @thecannaconsortium for all industry updates and news.