Just behind Netflix and McDonald’s sales growth, the legal cannabis industry is quickly becoming one of the largest markets — not just in California, but across the entire country. Cannabis company sales for legal recreational and medical use generated $6.6 billion in 2017 — sales for 2018 are projected to reach $10 billion by the end of 2018, and $22 billion by the year 2022.
Any other market simply can’t demonstrate such astounding growth. Funds are coming in, investors are perking up, and professional guidance for cannabis companies is growing. For many with an entrepreneurial spirit, it’s just a matter of putting all the pieces together to make sure the business plan is viable in the short run and sustainable for the long haul. So what’s holding you back from launching your own cannabis company and contributing to this growing economy? Now is better than ever to launch new cannabis companies to help fill the growing demand.
Here are 3 easy tips to help you tie all the loose ends together:
1. Build In Profitability from the Start
Maximizing growth from the get-go is essential; Depending on your business model and goals, there are several steps you can take:
- Automate: Use automation to cut down on labor costs
- Optimize: Optimize shelf and floor space
- Maximize: Maximize employee workflow efficiency
- Focus: Focus on digital channels rather than print
- Reduce: Reduce costs of energy, water, and utilities (some states, like California, have peak energy consumption hours – use these to your advantage)
When thinking about profitable, successful cannabis companies, most people point to large dispensaries. However, this type of business model carries its own risk, specifically around the areas of on-site security and cybersecurity. Large dispensaries are also subject to heavy regulation, so compliance should be a cost to consider. In comparison, a rapidly growing corner of the cannabis industry such as concentrates might be a better approach. Most people are aware of how much these products have taken off — but do you know which forms of concentrates sell more than others? For instance, wax vs. rosins vs. shatter? Knowing these types of micro-trends in the industry can put you ahead of the competition and can help you carve out your own space in the market.
2. Generate Buzz Around Your Cannabis Company — Well Ahead of Actual Launch
Generating a strong buzz through promotional efforts is important when creating a cannabis company’s launch strategy — it needs to include a dynamic range of channels to create a strong following for the company. Stir up some electric promotions well ahead of the targeted launch date. Cannabis marketing and brand recognition efforts should start early and continue in the months and weeks leading up to the launch. There are several ways you can stir some hype and create a devoted following long before your cannabis company goes live. For instance, you can:
- Social Media: Saturate social media outlets with announcements, sweepstakes, and special deals
- Press Releases: Create and distribute several press releases introducing the company and announcing its launch schedule
- Website: Update your website to reflect upcoming events and releases
- Events: Hold events such as workshops or community teach-ins to connect with local businesses and consumers
- Videos: Post videos that introduce your company and its products and services (this works really well for companies that are creating ground-breaking, never-before seen products that need tutorials)
It’s also wise to begin collecting testimonials and positive reviews, as these can provide meaningful, emotional input for your brand in ways that are unique and personal. Remember that testimonials can also include statements or video clips from cannabis business owners and entities that you might be collaborating with. Lastly, know your audience, as well as your competition. Creating detailed buyer personas can help you save resources by targeting only your key demographic.
Haven’t started promoting yet? Don’t Fall Behind!
3. Plan for the Long Run – Compliance is Key
Longevity depends not only on profit margins, but on your compliance with cannabis licensing laws. In the cannabis industry, staying compliant is a powerful and coveted business asset — customers and partners will remain more loyal knowing that your cannabis company operations are bulletproof. While each county and city has different cannabis laws, future operators generally need to complete a number of steps involving registration, taxation, and more:
- Choose Entity Name: Choose the entity’s name and formation type
- Register: Register with the Secretary of State
- Obtain Proof: Obtain proof of permission to operate locally (this will vary by city)
- Obtain Permits: Obtaining seller’s permits, cannabis tax permits, and other permits
- Document: Document cannabis insurance and banking activity
- Brand: Registering trademarks, cannabis logos and other smart branding components
Cannabis laws can change dramatically over time, so it’s important to respond accordingly if new requirements are needed. Likewise, if you have a mind for vertical integration, that is, incorporating more of the supply chain into the business operations, then you should understand the different items needed to complete those expansions.
Now is the Time to Fulfill Your Dreams
Owning a cannabis company needs passion. If you love what you’re doing and pursue your best visions, you’ll fit right into one of the nations most exciting, burgeoning industries. The potential is unlimited. Support for cannabusinesses is growing; and networks like 4Blooms’ Cannabusiness-in-a-Box are helping new companies lift off and take flight. Interested in your own personalized package of services? Let’s get in touch today and discuss the campaigns and options that will help you launch your new cannabis company.