Your business plan in the cannabis industry
With the cannabis industry speeding up the end of 2018 what does 2019 bring for entrepreneurs and business owners alike in a growing consumer driven market that is cut throat and establishing itself into $20 billion industry in 2020 and beyond? Our team at B3ta.net has put together a short post on our opinion and checklists when putting together your business plan for newcomers.
Canada turned the tables upside down and fully legalized cannabis in all its provinces just before the end of 2018. This had been coming for some time and Prime Minister Trudeau had earmarked cannabis legalization as his administration’s priority for that year. In America, they passed the Farm Bill agreement essentially legalizing hemp production in all 50 states, including CBD production and other cannabinoids. States have to submit frameworks for their own legal cannabis market and associated outcomes such as low-interest loans for new farmers, crop insurance and federal water access. America and Canada are both rapidly changing federal laws for the coming next big industry, and that is cannabiz!
Thousands of people have risked everything and either launched a startup or an affiliated service to the cannabis industry such as packaging and tourism. Regardless of your current business career, cannabis is worth looking at as an industry due to its potential growth in the next few years. The United States alone is set it grow the industry by 250000 jobs by 2020.
As a cannabis business, it is going to be hard to differentiate yourself in a fast-paced industry. Branding, marketing and promotion are your friends in this arena and you will need a large and ever evolving plan to keep your presentation for customers slick and current. This is part of your business plan that will manage and monitor your administration, financial and marketing goals of your journey.
Cannabis industry players are seen as the old cowboys of the wild west as they test the frontiers of products and services in the cannabis spotlight. But big business is buying up the landscape as it develops as can be seen by the many mergers and acquisitions during 2018.
“Altria Group, one of the largest tobacco companies in North America, has agreed to invest 2.4 billion Canadian dollars ($1.8 billion) in Ontario-based cannabis producer Cronos Group – the most significant foray by Big Tobacco into the rapidly growing cannabis industry to date.” MJBizDaily
The 2018 Farm Bill still needs to be approved by the house by essentially has opened the way for the hemp industry in a big way. It has ploughed open fields for farmers to new opportunities for a sustainable crop that is financially viable. Final approval of this landmark legislation would open up many more limitations set on the cannabis industry and lift restrictions placed on banking, advertising, marketing and financial services.
“ For marijuana dispensaries that have been shunned by the traditional banking system, blockchain provides an alternative to doing business only in cash.”Moneywise
Coming up with an idea
Finding a niche in the market is every entrepreneur’s goal and the cannabis industry has opened up a whole bunch of complementary industries. Common small businesses in the cannabis industry including but not limited to:
Cannabis producers: the farmers and growers that cultivate cannabis for the market
Cannabis processors: the middlemen that process the products and package them for the cannabis consumer market.
Cannabis Retailers: Outlets that directly sell to the cannabis consumer market. Medical dispensaries are a good example of this.
Don’t forget all the other industry jobs like delivery services, pot tenders, marijuana trimmers and even cash-in-transit security guards. There is something for everyone in the cannabis trade and you will just need to have a clever idea, roll it out and reap the rewards!
In this forever changing landscape it is best to hire professional legal services to keep you ahead of the current cannabis laws and what is being proposed for future regulations on a state or federal level. Below we will discuss the importance of a comprehensive business plan to sustain yourself in the cannabis industry for 2019.
Business Plan
Whether you are a farmer looking at introducing hemp as a new cash crop or a dispensary that delivers cannabis statewide a business plan is a pillar of any successful legal cannabis startup. A detailed business plan should include the following key points:
Executive Summary – 2 pages of who we are, what we do and how we going to do it.
Business Description – Your business background, mission statement, brief history, business location, legal structure, and intellectual property rights.
Market Analysis – Activities that affect your marketplace.
Organization Management – Management team and qualifications. Human resources and hiring plans.
Sales Strategies – Marketing and promotions whether online, print or networking.
Funding Requirements – use of funds and Return On Investment.
Financial Plans – profit and loss statement, cash flow statement, balance sheet, sales forecasting, exit strategy.
Above are the key points you need to research and write about in your business plan. One of the hardest parts of any business plan, especially in the changing cannabis market is how does one advertise and get your brand name out there to the customers.
Marketing Services
Marketing and branding services are difficult when you don’t have the skills or know-how. Just like in any trade it might be worthwhile hiring the services of a professional consultancy or freelancer to get this very important job done.
Despite legalization taking hold in most of North America, companies are still battling to find ways to advertise their services on the big social media channels such as Twitter, Instagram, Facebook and LinkedIn. With strict federal laws restricting and banning the promotion of cannabis on their pages you will be 1 in a million that have tried and had their pages or profiles removed.
Not all is lost, to reach and engage your audiences on these social media sites you need to do it the hard way. This is achieved through kick-ass organic well-written content that organically engages your target market through them sharing your newsworthy stories via their social pages. This can be done by hiring content curators who paint a pretty story behind your brand. Partnering with industry influences can be a very effective way to direct this human traffic to your website or social pages.
Social media advertising is off-limits to cannabis companies but a little bit of creativity can go along way, and cannabis entrepreneurs don’t lack creativity! A cannabis digital marketing agency could be your best bet when looking at advertising on the restrictive social world we live in. By formulating a marketing plan and strategy with a marketing agency you will have a better chance of successfully reaching and influencing your target audience. They have industry insights and modern ways to harness the power of social media and website technology to drive traffic to your website that will essentially turn to sales.
2018 saw Facebook managing over 2 billion active profiles and this proves social media is not a tool to be overlooked. Viral and sticky content can make or break brands online and in this world. One has many sales channels that you can establish influence over whether it will be selling through.
A video is one of the users most engaging type of content and most social media algorithms grant more reach to videos with more user engagement. Hiring a photographer or a videographer ensures your final video edit has more chance of success and vitality. Getting them to set up a small professional studio for closeup shots or capture amazing outdoor drone footage of your hemp fields could be the could be the key.
Digital media services can cost-effectively get your brand awareness out into the marketplace, exactly where you need clients. Geo-targeting services can with precision advertise your brand to your exact client base, whether you decide to target countries, states, counties, language or even age. A good digital media company will get your online marketing and cannabis promotion into the right channels with popular original content that engages your users and entices them to purchase your needed product or service.
Entrepreneurship is the key ingredient for the cannabis industry but there are many other lucrative avenues to choose than being directly involved. Cannabis companies are no longer an underground network but are listed on major stock exchanges so investing in big companies such as Canopy Growth Corp and Aurora Cannabis are investment opportunities waiting for you.
Conclusion
Whether you choose to venture into investment or start your own medical marijuana dispensary having a business plan and marketing strategy is an important start. The changing legislation looks like its all set in favor of more relaxed restrictions and laws during the course of the next year. Keeping your finger on legal changes and adapting your brand through these chopping seas would be clever captains way forward.
References:
MJBIZDAILY: https://mjbizdaily.com/altria-cronos-exclusive-partnership/
Moneywise: https://moneywise.com/a/ways-to-make-money-off-legal-marijuana
Advertising: https://www.greenentrepreneur.com/article/320031
Marketing: https://www.b3ta.net