Entering the cannabis market? Here’s how to be the best and most successful entrepreneur in the competitive market.
Becoming an entrepreneur requires a certain type of person. The drive, passion, motivation, and continued persistence in the chance to succeed makeup only a few of the characteristics we see in successful entrepreneurs. Adding to the difficulty of entering into an emerging market with increasingly high barriers of entry and moving legal hurdles, mean that entrepreneurs in the cannabis industry are a rare breed. What started as an underground black-market commodity has skyrocketed into a consumer-facing market at an unprecedented rate.
However, this insane race to the white market has led many to enter with the same lack of regulation and get rich quick mindset. Leaving veterans of the industry with a sour taste in their mouths. Entrepreneurs in any sense have a wild west mentality of sacrificing anything to succeed. However, following the proper protocol set forth by other industries, such as food and beverage, can ensure the success and elimination of the stigma tied to the cannabis industry. In the following post, we aim to provide you with some of the best advice on how to become a successful cannabis entrepreneur.
First Things First
As always successful businesses begin with a solid foundation. First of all, it is imperative to decide where you want to be in the cannabis industry. Do you want to work with hemp or marijuana? Do you want to sell a consumer-facing product or ancillary? How does your business add value to the market? How exactly do you plan to do that? It’s important to decide where you are and what kind of business you are creating. Not only for basic needs such as licensing but for supply chain and marketing purposes. You most likely already have something in mind with a product or service you are passionate about.
Therefore, always make sure to clarify and be specific about that in your business plan. Picking something you are passionate about ensures the long-term success of the business. Meaning if you are in the industry for a get-rich-quick scheme by cutting corners and not following the proper regulatory protocols you don’t ensure long-term success. Which leads to a continuing bad reputation for the industry. Not having a dedication to your business means the continued persistence of advocating for your business will fade. Especially through the mishaps and mistakes that always occur on the way to long-term success. Knowing exactly where you are in the industry and how you plan to succeed along with the industry as a whole is an excellent way to determine the future and long-term success of your business.
Licensing and Certifications
When you decide what type of business you are establishing you then need to take the proper steps. We always recommend contacting a consultant, such as Allay Consulting, to help you set up your business and apply for the proper licenser for your business. For example, licensing for a hemp or CBD business is entirely different from a THC/marijuana business. This is especially true depending on the state you are in. Still, it is good practice to always get the basic licenses and your cGMP certifications. Start by getting your business license which you file with the Secretary of State to get your tax license. Along with your Federal Employer Identification Number. These two very important first steps will help you get started. There is always a plethora of information on the world wide web as well.
Remember that any business in this industry is scrutinized closely. And is overseen by more regulatory bodies than you could ever wish for. Checking in with a consultant will safeguard that you are meeting the mark on everything each regulatory body is looking for. However, be wary of those giving advice and how to do it best, always consult an expert. It might be costly in the beginning but will save you millions in the long run. Beginning with the proper licenses and setup can give you peace of mind that you have an established business as an entrepreneur.
Know Your Supply Chain
One of the best ways to establish a successful business; especially in times like these, is having multiple vendors for your raw materials, packaging, and labeling. With continuing, supply chain issues and an ever-worrisome pandemic going on this can ensure that you’re never stuck not being able to supply your customers with your product. Knowing every in and out of your supply chain with multiple trusted vendors is one of the most powerful weapons in an entrepreneur’s arsenal. Not to mention being able to evolve and adapt to the current trends means having a business ready for anything. Get creative and figure out ways to continually improve your product while being present in your customer’s mind. Being able to pivot to a different vendor and supplier can lead you above your competitors when global issues beyond your control occur.
Branding and Marketing
Entrepreneurs are a business’s greatest cheerleaders. They know how to be effective and impactful in the operations and marketing of the business. Which can be tedious but if done right, rewarding. Creating your brand is one of the best ways to have your business be recognizable at a glance. A well-known brand and successful marketing is one of the best ways to continue to establish your business. Ask yourself, how do you want your business to appear to the public? What do you want to be known for? Are you a wellness brand? Personal brand? Service Brand? Luxury Brand? This will determine how you present your product from now on. It’s how you stand out from your competitors and while it might be just enough to have an amazing high-quality product; you still have to get in front of people to have them know how good your product is.
From packaging to website development to social media presence. It is important to have consistency for your customer’s sake in always knowing what they are receiving and what to expect when buying your product. Cultivate your whole brand around your entire business operation. From your raw materials to your surrounding community, you want those morals, values, and emotions to be connected positively to your product through your employees and expanding out into community outreach.
Claims Made on Your Product
Lastly, it is important to know what you can say and how you say it regarding marketing. Especially with white labeling, it is important to not make claims and descriptions of your product that you cannot follow through on. The FDA and FTC are constantly scrutinizing the advertising of CBD and THC products. Simply because of the difference in regulation per state. As well as the general lack of knowledge on exactly how to present these products to the general public. Please know you cannot make medical claims about your product unless they are backed up with solid research. You cannot connect yourself to any claims or reviews made by your customers. Unless you can back up the statements with legitimate research.
This is especially important to be aware of in your website and social media marketing. Liking a post or presenting a review on your website stating a medical or extravagant claim is seen as your business supporting that claim and you can be hit with an FTC fine or worse. Creating a brand and marketing your business correctly is one of the key aspects of cannabis business entrepreneurship success.
Exciting Emerging Markets
While we are mainly talking about the cannabis industry it’s important to be aware of adjacent emerging markets that might be helpful to keep an eye on. As we are continuing to make headway as an industry that illustrates certain plants have medicinal properties that can be incredibly beneficial to many. Most of the public still has written off many of these substances as illicit drugs long ago. Nevertheless, we are seeing a blossoming new industry in the psilocybin niche. Psilocybin has recently been decriminalized in a fair number of states and cities. Illustrating to us in the cannabis industry that the public may be ready for this plant to hit the market.
A word of caution! Psilocybin is entering the research and therapeutic arena, but it is still very much not present to the public market. You can’t go to the nearest dispensary and purchase psilocybin with the same ease of cannabis products. We just want to put this on your radar! Psilocybin is entering the area of research into PTSD, OCD, depression, and severe anxiety treatment. Being aware of new and emerging markets contiguous to cannabis is a great way to be aware of how you can pivot and evolve your business with the latest trends.
Your Tribe is Your Vibe
Lastly, keep a community that you trust and wants you to succeed. Having a network of experts who have been through the entrepreneurial process and succeeded, will not only want to see you succeed in the industry. But will keep others entering the industry in check to uphold the highest level of quality of products and services. While spreading the knowledge they have acquired over the years. No one hates talking about their achievements. So always have a mentor or someone trusted you can talk to about the ups and downs of being an entrepreneur. Having that community and support system is one of the best ways to increase the success of your business. Attend network events, watch the experts speak, many are working hard in all aspects of this industry to see it succeed.
Being an entrepreneur in this industry is tough and can be incredibly difficult to navigate. We hope this post has helped in illustrating the best moves to ensure the lasting success of your business. Deciding what kind of business you are going to create, obtaining the proper licensure, and constructing a facility with all the right certifications are some of the best ways to create a business of high quality and trusted brand. Maintaining a solid supply chain and marketing your brand in the most accurate and best way you can while being aware of alternative markets can also create longevity in your business.
Teagan is the Marketing & Communications 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 @thecannaconsortium2.0 for all industry updates and news.