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November 11, 2021

What are the keys to success for cannabis business entrepreneurs?

Entrepreneurship is difficult for any sector of business but especially with cannabis. The ever-changing rules and regulations make it next-level difficult. To establish a successful business make sure to create a solid foundation from your distributors to your white labeling. A solid supply chain creates success for any cannabis business entrepreneur. 

Navigating the opportunities the cannabis industry offers is a massive challenge for entrepreneurs.  On top of the typical obstacles, such as supply chain shortages, staffing, and overhead. Cannabis businesses face a unique set of challenges.

I’ve had the pleasure of working in the cannabis industry for 5 years.  In that time, I’ve seen firsthand the obstacles that cannabis entrepreneurs overcome. There are a handful of ways to be successful in this industry, but there are three that seem to be repeated in each success story.  

Know Your Opportunities

The first key to success is knowing what the available opportunities in cannabis are.  Here is a good place to start, ask yourself if you want to work in Hemp (CBD) or Marijuana (THC).  There are advantages to both, and understanding those differences will help you pick the best forward path for you. 

Once you’ve decided on Hemp or Marijuana, you’ll need to decide if you want a business that is “plant-touching” or ancillary.  Plant touching is any license that is involved with cannabis production. While an ancillary is the businesses providing to companies that are plant-touching.  

There are cultivation licenses to grow the plant, MIP (marijuana-infused product) licenses for making edibles and concentrates, and a dispensary license for selling the end product.  Thankfully, most states do not require vertical integration, so you can choose one license and focus all your energy on one area, not three.

There are no licenses for ancillary companies.  These businesses are in industries that already exist, such as banking, packaging, equipment manufacturing, security, lighting / HVAC, etc… 

Set Yourself Up For Success, No Matter What

The second key for successful cannabis entrepreneurs is making sure your business can pivot.  If you choose to go into the highly regulated cannabis industry, it’s worth remembering that the laws that you abide by today can change tomorrow.  It’s important to have strategic partnerships and to be commutative with cannabis regulators.  Cannabis is new for every state, so working together will help your business be ahead of the curb.  

After 2020, we are also reminded of how important it is to keep a range of vendors for your supply chain needs.  Your cannabis business will always need to work on reducing overhead, and being creative enough to pivot when the business landscape changes. 

Be Excited About What You Do

The third and final key to a successful cannabis entrepreneur is to have a passion for the plant.  If you work in hemp or ancillary services, it’s important to spend time being hands-on with a marijuana plant.  Learn the challenges these businesses face daily, learn about the compliance laws, and be a part of the community.