If you are thinking of starting a business, investing in the cannabis industry is a great idea. The cannabis legalization movement is sweeping across the globe, creating lucrative business opportunities.
Besides, there are no significant restrictions on entering the cannabis industry. You don’t need many years of experience, huge capital investment, or a college degree to start a cannabis business that could enjoy massive success. All you need is passion and a robust plan to get the business running.
As an entrepreneur, the chances are high that you have the passion, so all you need is planning on going about the new venture. Like any business, starting a successful cannabis business is no joke.
The path is filled with challenges, confusing laws and regulations, and other hurdles. Moreover, there are a lot of factors that surround the quality of cannabis products, which, in turn, tends to determine the potential outcome of your business.
If you are ready to take the plunge and start a successful cannabis business, here are some of the things you need to know.
1. Understand the Rules and Regulations
The first step you want to take on starting a cannabis business is knowing the rules. Regardless of how great your plan is, how much capital you’ve got, or how promising your consumers are, you’ll incur hefty fines or end up in jail if you don’t follow the rules.
You can avoid clashing with the authorities by understanding the cannabis business’s legal arena first. The rules that guide the cannabis sector from opening to running it are severe. The best way to go about it is by hiring an experienced cannabis lawyer.
The federal and state cannabis laws differ. Each state also has its own rules and regulations that may affect your business. However, whether you deal with medical or recreational cannabis, you need a valid license to operate.
Additionally, there are conditions that you must fulfill to get a business license. Here is a rundown on what you should do at this stage:
- Familiarize yourself with the state’s cannabis laws on use and distribution.
- Understand federal cannabis laws.
- Identify the business permits and licenses that you require.
2. Cannabis Niche Specialization
Any successful business person will tell you that picking a niche is crucial to business success. Cannabis business specialization is about narrowing down to a particular market segment. You can determine it by finding out who your target customers are.
Once you pick a niche, the next step is to determine how your business will stand out. You also want to find out the rules that govern the niche. Moreover, it is also essential to go through the online bodies through which you can promote your cannabis advertisements.
Remember, this is an essential part of picking a valuable niche while entering the cannabis industry. Fortunately, there are many cannabis niches to choose from. Here are the main categories:
i. Cannabis Cultivation
If you like farming, then cannabis cultivation may be your thing. However, this is among the highly regulated areas of the cannabis industry.
Some states may even require you to have some horticulture knowledge to get a license. Even if you meet the conditions, you still need to decide which type of farming, the strains to grow, and the medium to use.
When it comes to cannabis cultivation, High Supplies are a leader in the Cannabis industry in 2020. They are outstanding for their premium quality marijuana and cannabis seeds for improved adaptability, pests resistance, and high yields.
You may need to answer these three question if you are into cannabis cultivation:
- What consumption experience are you targeting?
- What is your growing experience?
- What is your budget?
ii. Cannabis Sales
If you want to sell cannabis, then it means you are setting up a cannabis dispensary. Here, you need to pick a suitable location and know how to run a cannabis shop. This niche is profitable; just make sure to abide by the law like selling to customers who meet the legal age.
Furthermore, keeping track of the strain’s quality is yet another factor you would not want to miss out on. The sales number depends on what you sell and how you administer it to the public.
iii. Production of Cannabis-Infused Products
Cannabis is everywhere nowadays. You can find it from foods, drinks to cosmetic products. This niche is growing fast because it solves two problems at once.
For instance, infusing it with beauty products like shampoos and lotions allows the user to improve their skin condition and fight inflammations. Generally, there’s a broad customer base in this niche.
iv. Auxiliary Businesses
If you don’t want to deal with cannabis directly, you can consider engaging in auxiliary businesses. These are businesses that other cannabis businesses need.
However, you may need to be a professional to succeed in such businesses. The good thing is that these services are highly sought after. Here are some of the services that you can offer:
- Blogging and copywriting
- App development
- Advertising and marketing
- Teaching cannabis courses
- Cannabis business consultation
3. How to Build Your Online Cannabis Store
Every cannabis business needs an online store. However, the challenge is deciding where to sell your cannabis products.
Since most top eCommerce platforms like eBay and Amazon prohibit selling cannabis, the best option is to build your website. Developing a functional site is not as easy as it sounds.
You need a good plan starting from finding the right domain name to launching and marketing the business. You can also take help from influencers where you can collaborate and market your brand. Such a process will help you in gaining significant ground in the initial days.
Here are eight critical steps to building a successful cannabis online store:
- Choose a great web developer
- Develop an effective plan on how to run the site
- Pick a suitable domain name
- Provide relevant business information
- Add your cannabis products
- Set up a payment method
- Come up with a shipping strategy
- Preview, test, and publish the online store.
4. How to Raise Enough Investment capital
Not every cannabis business venture needs you to raise capital. However, most businesses need funding. If you don’t have the required capital to launch and run the business, you have to raise more capital.
Fundraising a cannabis business is more difficult compared to other businesses. That is mainly due to the stigma associated with cannabis.
However, there are still options you can use to secure funding. Here are some of them:
- Borrow from friends or family
- Try cannabis accelerators and incubators
- Borrow business loans from banks
- Find angel investors and venture capitalists
5. How To Market Your Cannabis Business
Once you have a niche idea and how to set up your online store, the next thing is to come up with a marketing strategy. When it comes to marketing, it all depends on your marketing budget.
Despite the high demand for cannabis products, marketing cannabis is frustrating. Unlike other businesses, cannabis businesses don’t enjoy digital advertising opportunities due to strict restrictions.
However, it doesn’t mean there are no options. Here are some of the best ways to market your business:
- Use Facebook groups
- Use affiliate marketing
- Use native ad networks
- List your business on local and online cannabis directories
- Improve online visibility through search engine optimization (SEO)
Conclusion: Starting a cannabis business
Starting a cannabis business from scratch requires a lot of research and planning. This guide provides you the five crucial aspects of launching a successful business.
While there is no definite way of starting and running a successful business, these tips provide you with the basics you need to know. There are other crucial factors, such as building a great team that influences the success of your venture.
The best way to get everything right and ensure that you comply with the law is to find help from experts.
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I am Adeyemi Adetilewa, a media consultant, entrepreneur, husband, and father. Founder and Editor-In-Chief of Ideas Plus Business Magazine, online business resources for entrepreneurs. I help brands share unique and impactful stories through the use of public relations, advertising, and online marketing. My work has been featured on the Huffington Post, Thrive Global, Addicted2Success, Hackernoon, The Good Men Project, and other publications.