Tens of millions of people across the United States use cannabis regularly. That number continues to grow as additional states relax laws around the drug and as the federal government mulls over ending marijuana stigma at the national level.
With the rapid growth of marijuana’s popularity, starting a marijuana business has been a topic that has crossed several entrepreneurs’ minds. Since you’re reading this post, we’re guessing it’s something you’ve mulled over as well.
Yes, there is ample opportunity to make money selling marijuana and related products. But not everyone that jumps into the market does so successfully. So then, what separates the people that do well from those that struggle to make ends meet?
Below, we break down common tips bandied about by successful marijuana entrepreneurs.
1. Understand the Complicated Marijuana Legal Puzzle
Marijuana is a tricky business in that it is federally illegal to sell recreationally. Despite that, several states allow for the sale of marijuana in defiance of federal law.
What does that mean for you?
If you’re in a state that allows marijuana sales, you can open your business after crossing whatever red tape the state has set up and can start making money. If at any point, however, federal agents were to come by, they could raid your business and charge you with federal drug crimes.
Seeing as how the federal government’s power supersedes the states’, claiming you were allowed to open by local government would do little to help your case.
The best way to understand legal risks when working with marijuana is to talk to a lawyer that specializes in the space. By working with them, you can put together a plan of action that’ll prepare you for all possibilities.
2. Get Trained in Your Product
The best salespeople know everything there is to know about their product. That’s why one of the top tips we’ve gotten when asking pros how to start a marijuana business successfully has been to know everything there is to know about cannabis.
Do you know what makes marijuana more medicinal versus capable of giving you a high? Are you aware of the basics that go into growing marijuana?
While you don’t have to be a scientist or an expert in the plant to run a successful business, having surface knowledge of everything that goes into producing and selling your product will go a long way.
3. Find Funding Avenues
One of the primary reasons why businesses close unexpectedly is because they run out of money. If you don’t want to let a slow month derail everything you’ve worked for, know where you can pull money from if things get tight.
Some businesses in the cannabis space lean on banks they have great relationships with, although, some big-brand banks may have issues lending against federally illegal businesses. Typically, smaller community banks may be more open to those sorts of arrangements.
Other businesses will have a group of investors made up of family and friends they can look to when they get into financial trouble.
Whatever your funding avenues are, have them defined and keep those relationships intact, as you never know when you’ll need to make a withdrawal.
4. Pick a Great Location
Location picking can be hard to come by when you’re starting a marijuana business because not every commercial space will allow for a federally illegal business to run out of the property.
This is why a lot of dispensaries end up being relegated to inconvenient or crime-prone areas that have landlords who are more desperate to rent their real estate.
Just because it’s hard to secure the perfect location doesn’t mean you should settle. After all, convenience drives an immense amount of purchase behavior, so you’ll want to be as close to your customers as possible.
If you find you’re getting a lot of push-back from commercial spaces you’re engaging with, ask to meet with the group that’s leasing so you can educate them on any questions they may have regarding the legality of marijuana businesses. That way, they can see that you’re serious and well put together.
5. Learn How to Market
You could be turning out the best marijuana products on earth and not make a single sale in your business if nobody knows about you. Therein lies the value of marketing.
Whether you become a guru at Google ads to attract new customers or work with a team of cannabis recruiters to help market your open jobs, make sure you know how to let the world know that your business is a great place to shop and work.
Marketing is always the hardest when your company is starting out. But believe us when we say that as you start to build momentum, people will start to pay attention almost automatically.
Starting a Marijuana Business Is Within Your Reach
So long as the legal piece checks out for the area you want to start your cannabis business in, your goals are achievable. All you have to do is get organized, stay inspired, and of course, surround yourself with great people.
With proper help in your corner and desire, we’re confident you’ll find the same success thousands of others have found growing, marketing, and selling cannabis.
Starting a marijuana business takes more guidance than a single blog post can provide. So, if you’re still scratching your head when it comes to certain aspects of your launch, we welcome you to explore additional content on our blog.