In 2020, the global cannabis market doubled to $20.47 billion, having experienced a growth of 50.92%. The growth expectations through to 2028 period are also high and projected to move from $28.266 billion to $197.74 billion at a 32.04% CAGR.
Let’s just say opportunity is still knocking to start a cannabis business. All the possibilities mean that would-be entrepreneurs like you who understand cannabis industry trends, engage in customer relationship-building, and prepare for continued legalization across the U.S. can break into the market and grow their cannabis product lines.
Determine where your cannabis business will participate
From organic cannabis growth to strategic acquisition and/or partnerships, the cannabis market is filled with many avenues where you can participate. Begin preparation for this market by carefully considering where your cannabis business fits in.
Select an area where you will thrive amidst global competition, but be sure you can aggressively execute the demands of your chosen category to get an edge in the competitive cannabis market.
Some of the few niches to consider include:
- Cannabis cultivation – this area is highly regulated, and it requires a significant investment in knowledge, equipment, and financial support.
- Retailing cannabis products through dispensaries – the most significant challenge here is regulating direct advertisement for your products. This means you need partnerships to promote your cannabis business.
- Cannabis innovation – recreational cannabis legalization has paved the way for manufacturing cannabis edibles, oils, and topical products.
- Ancillary business options include becoming cannabis security, a cannabis accountant, or even a cannabis attorney.
Keep in mind, as the cannabis market grows, so too do the complexities of consumer demand. Diversify your products to meet the consumer’s needs by providing various product options.
For example, there is a continued demand for inhaled THC due to its quick onset. But a retailer might offer other innovative cannabis products that are absorbed through the skin or under the tongue. You can take it a step further to provide beverages, candies, and edible chocolate options.
But don’t just create different products. With the cannabis retailer example, shops can further enhance their reach by providing cannabis products with different concentrations, some of which could be infused with topicals or other additives.
Create a cannabis business plan
A business plan is essential for many reasons, especially if you hope to get funding from investors. Business plans are crucial for attracting investors to determine if your business is worth investing in and should include the essentials:
- Executive Summary
- Management team
- Product or Service
- Business Model
- Sales and Marketing
- Operating Plan
- Regulatory Consideration
- Exit Strategy
Whether you’re seeking financing or not, a cannabis business plan serves as a roadmap to your operation. Instead of risking wrong turns, you’re able to see the bigger picture, create a strategy, and make better decisions.
A business plan also helps ensure you don’t end up with shelves of unused cannabis merchandise or pounds of unsold product. Don’t forget that your business plan is a living document that you should revisit and revise often as your cannabis company grows.
Prepare your strategy and execution
Start your strategy execution immediately as you wait for legalization mandates in your area, state, or country to get ahead of the curve. Start by defining and building your business infrastructure, then determine the best approach for your business processes.
For example, if you choose to retail cannabis products, start to look into the regulations for exporting or importing cannabis globally. What permits should you get? Do you have a reliable logistics system to ship your goods to and from locations? Do you need alternative funding options for your new business venture?
Also, find a regulatory agency to work with, or a compliance officer, to ensure your process execution stays in compliance with the local and state permits. Additionally, consider going into business partnerships with leading players in the market.
A good example is Tilary Inc., a company that has become a global pioneer in researching, producing, and distributing recreational cannabis products in THC and CBD. Such a retail partnership, for instance, would expand your product portfolio and, in turn, your overall customer base.
As such, this strategic move increases your opportunities for a massive ROI, and it solidifies your cannabis business as a competitive entity in the cannabis market.
Lean on cannabis technology
Every cannabis operator needs the right tools and resources to navigate a complex industry that rapidly evolves to keep pace with growing customer demands, expanding regulations, and the ongoing effects of the pandemic.
The solution is modern cannabis technology, specifically Cannabis Enterprise Resource Planning (ERP) which provides the business management resources critical to maintaining successful operations and achieving growth. But not all cannabis ERP solutions are created equal – cannabis entrepreneurs need to think strategically and research ERP solutions suited for their needs and support growth.
Here are five things you should look for when committing to a cannabis ERP software solution:
- Phased Onboarding
- Cannabis Compliance
- Source-to-Pay Analytics
- Multilingual Access
- Specialized Expertise
Do your research, take time to talk with product experts, watch demos, and consult industry specialists before committing to any cannabis technology
Start your cannabis business now
Cannabis rules and regulations change several times each year. Nonetheless, an ongoing “green rush” is causing an economic upswing in the global cannabis market. And because more states and countries are legalizing the growth, production, sales, and distribution of cannabis and cannabis products, preparing your business now will position your business for this growing opportunity.
Plan for the risks and the rewards, consider the details when choosing where you want to participate, create a solid strategy and execution process for your business, research possible partnerships, and stick to the regulations and compliance requirements.
But above all, understand the technology that prepares you for quick execution. Speak to one of our cannabis business startup experts today.