Since its legalization, the cannabis industry has been growing and evolving rapidly. This, coupled with its age and regulatory environment, makes the cannabis industry unlike any other. Staying current on the newest and most relevant information allows marijuana business owners, entrepreneurs and investors to succeed.
As of January 2020, there were about 243,700 full-time jobs in the legal cannabis industry. That’s a 15% year-over-year increase making marijuana the fastest-growing industry in America.
Even as the coronavirus, known as COVID-19, continues to spark global concern, government officials are regarding cannabis as an essential business and the industry is continuing to prove that it could be recession-proof.
Here are some helpful industry tips to know before starting a marijuana business and some steps to take if you decide to enter the cannabis industry.
The cannabis industry is dynamic and growing quickly. Things are bound to change as the industry evolves and you need to make sure you are evolving with it. One change in regulations, a new market popping up or new trends in newly legalized states could make or break your business, so be on top of it and prepare accordingly.
For example, despite Washington’s status as a legalization pioneer, the state’s industry has long been behind when it comes to diversity. When Washington first passed a bill to legalize recreational marijuana in 2012, social equity programs were not a trend.
However, as the industry has sought to rectify the disproportionate harm in communities of color that was a result of cannabis prohibition, social equity programs have become more popular in state legalization bills. So, in Washington, lawmakers decided to address social equity issues that were not addressed by the initiative passed by voters eight years ago. To read more about Washington’s new social equity program, read our blog.
Build authentic relationships with your local cannabis community — success in the cannabis industry is often uniquely tied to the connections leadership has made. Reach out to industry leaders, especially those in your area, to see if they are open to talking with you about your idea and plan of action. The best way to get the lay of the land in the cannabis industry is by talking to people who presently inhabit it and more often than not, they will be open to speaking with you about their experiences.
It is also imperative to establish relationships with local and state officials. You can achieve this by attending meetings on both the state and local level. In these meetings, you will hear exactly what the state is looking for in applicants. If you do not attend these meetings, you will not be able to tailor your application to align with that states are most concerned about.
It would also prove beneficial to develop a Community Benefits Plan, which is a supplementary business plan that some state cannabis license applications are beginning to require or include as an ancillary section to help set your application apart. Our template can help you begin drafting your plan.
In many states, local municipalities are able to implement additional rules regarding if and what types of marijuana are legal in their jurisdiction. If you’re interested in opening a marijuana business, it’s imperative to research local law in conjunction with state regulations. Local approval is always required for final state approval to operate. Check out our blog for more details on how municipalities are able to call the shots in some states here.
Oftentimes, the state’s regulatory department will only keep applications open for a 30 to 60 day window, leaving you with a limited time allotment to write and complete a very detailed application. Anyone considering applying for a marijuana business license should be prepared to provide descriptive detail with the appropriate documentation for completing an application, even months ahead of when applications will become available. Need help preparing your application or completing a particular section? Download our template solutions.
No investor wants a lukewarm investment and the cannabis industry is no exception. When raising capital, pour all your energy into it and close it out as fast as you can so you can get back to why you began this venture to begin with, which is to run the company. Make a concerted effort to seek out diverse investors and make room for them on the advisory board. It is important to make sure the people guiding you on the business will offer a wide range of viewpoints on race, gender and sexual orientation. *link to Item 9 investing?
When starting a cannabis business, it's crucial to understand your customer base and the unmet need you are filling for them. Brick-and-mortar dispensaries have evolved considerably since the early days of Dutch coffeeshops and private patient collectives in California. Now, when you first step through the door of a dispensary, you generally have a good idea of what type of experience you are about to have. Between atmosphere, staff and menu selection, cannabis retailers can stand out from the competition in many different ways.