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Learn How To Fund Your Business In The Cannabis Economy!
April 16, 2021 4 min read
The opinions expressed by the entrepreneur’s contributors are their own.
All the indications are that 2021 will be the year you place your bets on cannabis. With the recent legalization efforts in several US states and the reclassification of cannabis by the United Nations, the stigma in the industry is decreasing. This has encouraged lawmakers to speed up its legalization at the state level (where this is not yet fully legal) and especially at the federal level, where there appears to be a change of heart about cannabis after the new government came to power. As we move forward at an amazing rate, both newcomers and industry veterans need to focus on longevity and a healthy growth plan to be successful.
As we head into one of the most exciting years in our industry, here are our top tips for success:
Refine your knowledge
Cannabis is popping up everywhere – and it’s available in almost anything you can eat, drink, wear, or in your body, and it’s becoming the hottest commodity of our generation. This means that professionals from numerous non-cannabis industries show interest, often with the assumption that their experience will lead to a successful brand. But there are nuances in the cannabis industry that often bother even the most seasoned executives in the industry.
It is important that you do your homework and understand all aspects of this highly interconnected industry, from the plant itself to the cultivation, to the manufacturers and ultimately the consumers. The power of knowledge remains essential to the inner workings of cannabis companies that achieve long life.
Diversify your team’s skills
Successful cannabis companies have diversified their leadership teams with experts from various fields such as science, medicine, and food – not just cannabis. These brands have strategic strength and persistence.
Branching out and searching for these specialties can have a profound impact on gaining a broader perspective on your brand’s potential and, ultimately, your market share. By ensuring a variety of skills on your team, you will increase the longevity of your brand as the industry landscape evolves.
Strive for multi-vertical integration
When I first moved into the cannabis room, I was against vertical integration for several reasons: Owning a grow infrastructure was daunting, capital intensive, and inefficient. However, I have realized that it is valuable to own and control multiple elements of the supply chain. I have realized that achieving multi-vertical integration (post-cultivation) is an alternative and achievable goal and removes one brand’s trust in the success of a third party.
In an emerging industry like cannabis, companies that incorporate multiple aspects of the supply chain into their business models are more likely to succeed than those that don’t. Owning multiple industries such as manufacturing, distribution, and retail infrastructure under one roof creates self-sufficiency and greater control over a brand’s fate.
Achieve a mixed corporate culture
We are now facing a new age of cannabis where the support of an established CPG (Consumer Packaged Goods) provider can be the deciding factor in developing a cannabis brand. However, CPG parties are notoriously unaware of the pros and cons of cannabis values, so they often result in little (to no) appreciation for the spirit of the plant and ultimately fail to understand what seasoned cannabis parties have to offer. The challenge, however, is to combine a more disciplined approach to CPG with the ritualized legacy of cannabis culture.
In order for a modern cannabis company to ensure longevity and growth, it must face this tension and commit to finding the balance between these otherwise dichotomous approaches. By creating synergies between the cannabis pros and the CPG players, your cannabis brand will ensure a mixed culture and ultimately a healthy growth plan.
By implementing these four steps, your business will have a greater chance of overcoming the many challenges that well-intentioned cannabis companies are defeating today.