The cannabis industry currently is very much like the birth of the dot-coms. Everybody is trying to figure out how to get a part of the Great Cannabis Opportunity because, if you get the right part, you can actually become very wealthy. However, as any successful business owner will tell you, a business is only as good as the experts that you hire to help you build the business.
People trying to figure out how to get into the cannabis business seem to come in four groups:
- The Dispensary of Your Dreams. A cannabis dispensary does seem like a pleasant side of the business at first look. Retailing a broad group of products that people actually want is an obvious attraction. What could go wrong in cannabis? Well, aside from the fact that any kind of retail is usually a low-margin, highly competitive business requiring upfront costs to maintain inventory, you do meet a lot of nice people. Or you get robbed in daylight or broken into at night, mugged in the parking lot, and all your cash receipts of the day stolen.
- Miracle CBD Oil Business. Every little bottle of CBD oil claims artisanal roots under the loving care some photogenic person. While I am sure there are true CBD oil artisans out there, most bottles you see come from one of a handful of white label manufacturers. The term “white label” refers to products produced in containers, such as cute little oil bottles, to be custom labeled for whatever brand buying that oil for resale. This commoditizes the CBD oil part of the business and when that happens prices go way down and competition cannibalizes a huge portion of the businesses that is struggling to survive.
- Grower of Great Cannabis Greenbacks. Pot growers tend to come in two types the passionate farmer and the gentleman farmer. Cannabis growing is a hard dirty often boring 24-hour trudge from seed to sale. Just like with any farmer, your crop might fail, you might get ripped off, or the price of your crop might drop so low as to make it almost worthless to grow. Cannabis cultivation is not an easy route to money even if your plan is to simply rent out space in your licensed growing facility.
- Magic Brownies and Doctored Pepper.
I like to look at the cute little cookies and candies and fruit bars and other yummies every time I pass the display case at my local dispensary. Those little goodies all look so sweet and innocent in spite of having made it through almost overwhelming food safety and zoning regulations. I marvel at how they can come up with daily nutritional values for marijuana brownies. Onerous legal burden is one of the reasons why so many of these companies flower and quickly die. Or perhaps it has something to do with the constant challenge of competition. In other words, if you have access to a commercial kitchen why not make some brownies and sell them?
These are the most popular cannabis business models. They attract more more applications and more fees and certifications and whatnots from the governments — Local, State, and National. The cannabis business requires that you pay close attention to new and changing laws and legal attitudes toward the cannabis industry. All this compliance with the next governmental edict is expensive, and it is always more expensive if you try to do it yourself.
You can still take part in the growth of this new industry without fighting the crowd in the most popular sectors of the industry. Providers of professional services such as lawyers and CPAs, do very well if they can boast a specialty in cannabis. marketing should be a growing business as competition in the industry increases. there are a million ways to take advantage of the economic propulsion found in the early days of a new industry. Your chances of becoming a multi-billion moonshot of a company are perhaps not high if you are simply providing professional services. However, your chances of total crash and burn are also not as great as being a fighting small fish in water crowded with barracudas.
Learn as much as you can about the industry and keep watching for a product or service that cannabis businesses and their customers need. A well-chosen niche has a better chance of providing its founders with exotic beach vacations and sound sleep than if they had pursued the high competition main-stream of the industry.
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