The cannabis industry is constantly growing, which creates exciting opportunities for entrepreneurs seeking to enter into the space. With some form of legalization in almost all 50 States , both local and multi-state operators are manufacturing and selling a wide variety of creative cannabis-based products. Given the growing acknowledgement of the therapeutic benefits, along with the new ways cannabis is being infused into other food items, there is great capacity for cannabis business development and growth.
The process of setting up a cannabis business is daunting for emerging entrepreneurs. This is where MBA Growth Partners comes into your life. MBA Growth Partners has the experience and expertise to assist your company with its business development needs. We can educate and guide you on the industry best practices.
Here are the ways we will help:
It all starts with educating yourself about the industry and specifically your local market. If this is a new market you can leverage the experience of other states and you can consider researching agricultural, retail, and/or consumer package goods industries. Before stepping in, it is always wise to plan for contingencies. The industry and the regulatory environment is ever evolving, so it is crucial to stay informed when assessing your cannabis business development needs. While having an idea of the business setup process is vital, it is equally important to identify and manage risk.
The next step is to create a financial strategy and to be brutally practical in creating it. How are you going to hire and pay your staff? Will you pay your sales team on a commission basis? Are you considering payroll taxes? Are you accounting for inability to deduct ordinary business expense on your taxes due to section 280e of the IRS tax code? How much is the facilities, equipment, utilities, etc.? How large is the addressable market? How do you plan to market to your customers and how much will you budget? All of these considerations must be addressed in your financial modelling.
Creating a team
Another important first step that needs to be expertly executed is staff sourcing. Whether and how your vision is executed is dependent on the people you’ve entrusted to carry it out. This includes the people who you’ve partnered with to lead the company. From obtaining your cannabis license, to expanding your business, to an eventual exit, your team will be crucial to your success. Seeking professional assistance on staff sourcing can increase your chances of winning a license and, ultimately, to your long-term success.
One of the most common mistakes most businesses make is to skip the engineering and design phase and rush to a commercial builder to construct their facility. While this non-industrial approach may seem to be the quickest way to get the job done, it may cause big trouble in the future. The only way to avoid that is proper planning. It will also make your business ready for regulatory inspection and opening.
Your research, your team, facilities design, and financial modelling will be part of your comprehensive business plan. At that point it is advisable that you consider the assistance of cannabis business development consultants that have been down this path and can tell you what is around the bend.
The bottom line
A cannabis business requires a clear strategy backed by a stable financial model to grow. You should know the why for setting up this business and how you will be adding value to your customers’ lives. In addition, you should seek assistance in the set up your business.
If you’re planning to start your cannabis business, MBA Growth Partners will assist with planning, to license application, to post license operations.