You’ve heard the hype! The Canna-biz is an epic industry to excel and thrive if you are a “budding” entrepreneur. The cannabis industry isn’t as black and white with some random “grey areas” like it was back in the day. Working in cannabis has become much more complex and dynamic over the past few years and with that has become more opportunities for entrepreneurs to customize their canna-biz to their own specifications.
In this new marijuana era, growing cannabis plants isn’t the only way someone can get into the industry. In fact, some parts of the industry don’t even touch the plant at all, these cohorts are known as ancillary cannabis businesses.
In this article we will break down both cannabis business models, so the budding entrepreneur can find where their biggest “pot”-ential lies.
The Two Types of Business Models:
· Plant Touching- Cultivation, Lab- testing, manufacturing, distribution, dispensary, delivery, social consumption.
· Ancillary (non-plant touching) – Grow lights, packaging, professional services (legal, tax) technology, construction, security, marketing, accessory products.
The Plant-touching Side of the Canna-biz:
Cultivation: As the cannabis industry has come into focus there are many distinctions between the cohorts that make the product to consumer process happen. Cultivation, perhaps being the heart of the industry, encompasses the breeding, growing, and harvesting of cannabis. Once the cannabis flower process is complete and the quality is verified, the product is then sent to a processor or manufacturer for THC/CBD extraction. Depending on the cultivators’ end game they may also send their flower directly to dispensaries and get their name on the shelves.
Lab-testing: The part of the process that takes place post harvest and pre-sale, lab-testing is a method that is going nowhere in the cannabis world and by that, we mean it is here to stay. Lab testing doesn’t only provide the THC and CBD quantity levels of your cannabis, but it also gauges the quality of your cannabis. All cannabis needs to meet certain testing requirements and state standards to be sold on the market.
Testing your cannabis for mold and unwanted chemicals is a step all companies take when getting their product ready for sale. It is a crucial part of the process that sometimes sits in the shadows. Some, if not most, companies will test their product throughout the growing process to ensure its viability of sale.
Processing and Manufacturing:
There is a huge industry for this and the standards are set high. Though surprising to some the processing and manufacturing of cannabis products is delicate and scientifically backed. This can make the difference between a cannabis cup and a poor end product. The methods within this cohort can create full spectrum cartridges/vapes, tinctures, topicals, edibles or all of the above depending on their speciality. Knowing your market will help guide processors and manufacturers in the direction they need to be successful and make waves in the canna-biz.
Distribution: Distributors can also be known as the middleman in the industry. Once the plant is harvested the distributors then pick up and transport the product to testing labs, dispensaries, and/or manufacturing and processing facilities.
Dispensaries, Delivery Services and Smoke Shops:
It is no shocker here that dispensaries and weed delivery services are some entrepreneurs’ automatic go-to gold mine. Perhaps this is because many people have more knowledge in architecture, design, and social scenes than the cannabis plant itself. This part of the cannabis business leaves lots of room for creativity, profit, and marketing of an already popular product. Smoke shops can create a social atmosphere around smoking and create a space within the community that holds longevity with your consumer-base. Though, be aware of your state’s regulations because some do not provide the licensing to sell and consume cannabis publicly or on the premises.
Similar to “Uber” dispensaries and delivery services don’t just link people from “place to place” but “place to pot” and they make it easy for anyone to get into the industry assuming you have the financial backing. Don’t get carried away and not know your market. Some states hold many dispensaries, with little product to go around… As far as a delivery service or dispensaries are concerned these facilities need a business-to-customer license type. Currently some states are creating new possibilities and opportunities for delivery services within already established licensed guidelines.
The Ancillary Side of the Canna-biz:
Now, onto the non-plant touching or ancillary businesses within the cannabis industry. This breakdown of these business entities really showcase the importance of branding, marketing, and the progressive movement of marijuana.
Packaging: Where successful branding and marketing meets custom cannabis packaging designs! This is the place where companies and brands go to stay compliant, fresh and get noticed. If you are a budding entrepreneur with an eye for good cannabis marketing and graphic design, working and building your future in this field is promising. Custom packaging is not only a brilliant cannabis marketing tool, but it curates the voice brands need for a great year in a tough industry. A cannabis packaging supplier can design wholesale (compliant) packaging cannabis products and bring companies and brands to life.
Construction: An old game full of new tricks. The cannabis and farming industry has pathed a new path for construction of greenhouses, dispensaries, and growing techniques. Growing companies have to be both licensed and regulated and constructing long-lasting installations that cannabis facilities need to be energy efficient, safe, and compliant is of the utmost importance.
Technology: Different software programming such as seed-to-sale and other tracking programs help companies gather information such as in-house inventory and product location from point of harvest to point of sale. These new software programming systems have been put into place to help businesses work efficiently and compliantly with the state or county.
Accounting and Law: Thinking you can do this on your own is a mistake. Having other professionals such as lawyers, accountants, and marketing experts that understand the industry in terms of law and tax strategy are a must for success long term.
Smoking Accessories: This area of the canna-biz goes way back and just keeps on evolving… Smoking accessories from bongs, to cartridges, pipes and ashtrays just keeps getting better with age. Selling smoking accessories whether it be wholesale or custom is a dynamic and fun strategy to get in the business or simply expand a company. The bottom line is… you don’t have to have a green thumb to be a successful entrepreneur in cannabis, you simply have to find your niche and play to your specialties and strengths. Once you familiarize yourself with your state licensing policies you can use this guide to point your passion in the right direction. The industry has many layers and players, but if you’re going to set yourself up for a successful company in cannabis make sure it is doing something you love!