Author: Stone Everett
So you’ve decided to start a marijuana business? Well the road ahead can be very lucrative for you but just how smooth it will be will obviously depend on your business strategy and how well you execute. Naturally, starting any business can be complicated, especially one in an industry with as much scrutiny as the legal cannabis market. With so many white, gray and black legal areas to be mindful of, setting up the right team will also be crucial to your success. But who exactly do you need? And more importantly who can you trust?
First off, understand that statistically, any business starting off in any industry has a 96% chance of failing. That’s just the way business goes historically. If this alone doesn’t highlight the importance of having the right strategy and team then also consider this. Cannabis is still federally illegal. Even CBD, which has strong support from the medical community and zero psychoactive properties, has been classified as a schedule 1 controlled substance by the DEA which adds to the complexities of your business space minefield. And a final detail to consider is that marijuana tax laws are completely different from typical consumer tax laws.
So now that we’ve identified the gaping vulnerabilities of most cannabusinesses, let’s also go over the options that you have for protection against them.
Who to Consult With and When?
Consultants can be your best friends. They can sometimes be a little pricey and restrictive but a good team of experts is always worth it no matter the burden because the savings they help you realize typically outweigh their costs. With cannabis you have all kinds of consultants; legal, logistic, financial, security, medical, horticultural. The list goes on but you also have to understand the relationship that each has with the other. A good team can make or even save you millions more than you would have on your own or vice versa if your team isn’t exactly on top of it.
You’ll want to involve your consultants from the very beginning. It’s a lot easier to build your business in a strategic way with the help of an expert versus doing it by yourself, messing up and then having to go and correct it. This is of course assuming that your mistake isn’t too costly to come back from. Remember, the way you structure your business in the beginning could impact how, where and when you’re allowed to operate. This includes whether you’re able to get a license or not, the people you can hire, the taxes you pay and more.
A best practice to follow with your consultants is to always tell them everything. This is counterintuitive for some business owners as most like to operate with little secrets here and there. Nothing wrong with harmless secrets in business but withholding information from your experts is never recommended. Remember, everything that you do and want to do with your business is their business. This is for your benefit and protection because if they’re making decisions without having all of the pertinent information it could prevent them from giving you the best advice.
Lastly, something to consider could even be a second team of consultants who you know are on the ground in the space you want to get licensed. It’s not uncommon for people to seek information from more than one source but a local source is best. They know the permitting and licensing process and who to talk to in the town. As your business grows, they will be with you from the beginning.
Bottom line is, doing business with cannabis is possible and having the right team around you always increases your chances of success. Will hiring just anybody guarantee you the results you want? No, but doing your homework and finding the right people to help you develop your cannabis brand will prove crucial to the success of your business and how much friction you encounter along the way.