Over the past decade or two, the cannabis industry has evolved from being largely unregulated to becoming much more regulated and involving many more players. Those wanting to start businesses in the cannabis industry need to be able to not only satisfy regulatory requirements but also to meet consumer needs.
Getting ready to open a cannabis business requires thorough planning with regard to the legal requirements, the products to sell and much more. Cannabis entrepreneurs face many challenges, such as access to capital, and those who are successful often have experience in the corporate world rather than the grow room.
Know the state laws and regulations
As each state has different laws and regulations and it is vital to know those of the state in which the business will be operating.
It is also necessary to find out whether the state is currently accepting applications for licenses or not. A business needs to be licensed by the state and may also need to be licensed by the city or jurisdiction in which it operates.
A potential business owner may need assistance with the application process from a team of consultants to get a good shot at winning state approval. The decision about what type of cannabis business to start and where to start it may depend on which types of licenses are available.
Cannabis regulations can be confusing even for experienced business owners and getting help from a knowledgeable attorney may be necessary. For example, some states have extensive regulations when it comes to cannabis packaging, including CBD packaging. One regulatory infraction can put a company out of business.
A cannabis business not only requires licensing but plenty of other paperwork, fees, taxes and financing. Tax laws also vary widely – dispensaries cannot deduct expenses while grow facilities can.
Know your audience and choose the right products
Knowing an audience and choosing the right products are crucial to success. As there are so many new products and the regulations governing them constantly change, cannabis packaging is one area where innovative products are in demand.
Researching, forecasting and moving on short time frames is important when bring new packaging options to market to fill a need. Smell proof bags, for example, are constantly undergoing improvements so that they not only comply with regulations but keep products fresh and appeal to consumers.
There is always room for those who want to sell unique products, such as custom herb grinders, custom weed bags or innovative cannabis stickers that help businesses develop their brand, stay compliant, and keep customers informed.
Pre rolled cones are one of the fastest-growing segments in the cannabis industry and offer another opportunity for entrepreneurs. Companies that come up with ways to make smell proof bags child-resistant are achieving success, as are those who are coming up with innovative CBD packaging and cannabis stickers.
Have a workable business plan
A business plan has to cover every aspect of running the business, including recruiting employees, marketing, sales, and safety.
It is always important to investigate the competition and see where other cannabis businesses are succeeding and where there is room for improvement. For example, those who want to go into CBD packaging, need to find out how saturated the market is and whether they will be able to carve out a niche with an innovative product. Those wanting to sell custom weed bags need to know that enough people will want to buy them.
Potential cannabis business owners will also need to ensure that they have enough working capital to see them through the period from when they open their doors to when they first start generating profit.
Find reputable growers and suppliers
Anyone who wants to sell cannabis products must work with reputable growers who abide by state laws and do not use pesticides or toxic chemicals.
If the idea is to start a dispensary, it is important to find reputable suppliers. Many suppliers are happy to show dispensary owners around their premises as they want to build long term relationships with them.
Plan how to market
The marketing of cannabis products is subject to various regulations. For example, some states that allow dispensaries to operate do not permit advertising of a business or its products. This can make marketing cannabis products more complex.
Social media marketing can be effective for cannabis businesses and it starts with providing useful information to consumers rather than direct selling. For example, a health seminar about the effects of cannabis and other creative content ideas can be effective.
Use innovative branding
Innovative branding can help to make a cannabis business stand out from the competition. Consumers interested in sustainability, for example, will appreciate knowing that cannabis is organically grown or that custom weed bags and CBD packaging made from biodegradable materials like hemp.
Companies selling custom herb grinders can focus on the originality of their products. Custom cannabis stickers can also help with branding.
The option of customization has firmly taken hold and consumers expect it today. Being a successful cannabis business means allowing customers the option of purchasing custom weed bags, custom herb grinders or custom rolling paper.
Packaging is an area ripe for customization. Custom CBD packaging allows buyers to change the shape, size, color and other design elements of containers to suit their needs.
Provide great customer service
The quality of customer service today can make the difference between a cannabis business that succeeds and one that fails. Listening to the needs of customers and getting feedback from them can help with making improvements in products like smell proof bags, cannabis stickers or CBD packaging.
A final word
Starting a business in the cannabis industry has many challenges but also presents a wealth of opportunities. Institutional investors are still wary of investing in the cannabis industry and it is not possible to apply for a loan at a traditional bank so funding can be one of the biggest challenges, especially as startups require significant funds. Entrepreneurs who manage to succeed, comply with the regulations, find adequate funding, plan and market smartly and offer excellent customer service.