To become a successful cannabis business, you will need to hire a team of experts. These experts will provide you with vital ancillary services to help ensure you are prepared and on track for success. It will cost you tens of thousands of dollars, perhaps over $100K, to hire the ancillary experts you will need just to get started.
What is an ancillary business?
Ancillary(in cannabis business terminology) refers to any business related to the cannabis industry that does not directly "touch the plant." Some ancillary services are optional depending on the service or product provided. Still, thekey ancillary services that every successful cannabis business must have are:
Real Estate Broker
Learn how these key ancillary services from cannabis industry service providers can help accelerate your company into a successful cannabis business.
Proceed With Caution
Whenstarting a cannabis business, now is not the time to pinch pennies. It's time to find the people with the most knowledge and an excellent reputation within the cannabis industry. You could try to figure some of these out yourself, but we would not recommend doing that.
After assisting numerous cannabis industry clients throughout the U.S. and abroad to help design and build their businesses, we know firsthand the importance of having a solid team. With inexperience come mistakes. These mistakes could be very costly. If there is a miscalculation or an oversight on something critical, you might have to start over from square one. That would cost you time and money, not to mention potential revenue, pushing back your business launch date by months.
Legal Services for Cannabis Businesses
While every business needs an attorney, you may need more than one attorney to ensure your cannabis business adheres to the myriad of state and local regulations. Also, since many of these cannabis regulations are fluid, you need to have an attorney to stay on top of what the most current laws are.
Reasons legal assistance from a cannabis attorney may be helpful include:
If you have created your own strain or a product where you wish to protect your intellectual property (IP), a patent attorney can help.
You may need a trial attorney in case of a lawsuit from a customer, a competitor, or a disgruntled employee.
Pro tip: Ask all employees to sign amandatory arbitration clause in their contract before starting employment. That will save you time and money if there is an issue in the future.
According to one study,80 of the Forbes top 100 U.S. companies have used mandatory arbitration clauses since at least 2010. Hiring a legal team with extensive experience in the cannabis industry is a must.
Accounting Services for Cannabis Businesses
As you may be aware, regulatory compliance for cannabis is a critical factor in being allowed to continue operating legally in states which have legalized marijuana. Keeping accurate records of every expense and transaction is crucial in any business but even more so with a cannabis business.
Hiring a certified public accountant who has been working with cannabis industry clients for several years will help ensure that you are constantlyadhering to cannabis compliance and not overpaying your taxes.
A cannabis accountant can also do an internal audit, allowing a cannabis business owner to detect and investigate fraud, safeguard company assets, and ensure that financial reporting is timely and accurate.
Cannabis Consulting Services
There are many types of cannabis businesses, ranging from cultivation to manufacturing to dispensaries. All of these businesses can benefit from hiring a cannabis business consultant.
An experienced cannabis business consultant can help you with cannabis application consulting, assist in reviewing and refining your business plan, and even introduce you to potential strategic cannabis investment partners or other potential business partners (including other ancillary service providers). Overall, a cannabis business consultant can ensure that you are following the correct steps in the correct order tomaximize your chances for success with cannabis licensing.
Cannabis consulting firms, like 3C Consulting, can also advise you on the best ways to structure your business to maximize tax efficiency and protect your assets. Additionally, there are manytypes of cannabis consultants:
Some consultants specialize in helping growers achieve maximum yield while minimizing losses
Others specialize in extraction or manufacturing
Cannabis consultants also specialize in raising capital or launching a new product
Alternatively, some cannabis consulting companies offer an umbrella of services from seed to sale
Hiring the right cannabis consultant can increase the chances of receiving your cannabis license as they have gone through the application process many times with many clients.
It's important to vet potential consultants. Ask any cannabis consultants you consider hiring to provide references and testimonials from former and current clients. Ultimately, hiring the right cannabis consultant will save you time and money.
Cannabis Real Estate Professional
Regardless of the type of cannabis business you would like to start, real estate is necessary. You will need either an indoor or outdoor space to grow marijuana, a space if you're planning on operating an extraction lab or manufacturing facility, and you will especially need retail space to open a dispensary.
Hiring a real estate broker who has experience working with other cannabis clients can save you countless hours instead of searching for the right real estate for your particular cannabis business.
Ultimately, real estate is the foundation of any cannabis business. You can have the best product and team, abundant access to capital, revolutionary extraction processes, and a strong brand. Still, without proper cannabis real estate that is zoned and compliant with state and local laws, you have nothing.
Architects, Interior Designers, and Contractors
After securing your cannabis real estate, the next step is to hire an architect and a contractor to build a new structure or reconfigure your existing building or retail space.
Your cannabis consultant can work closely with your architect and contractor to ensure your cannabis business is built to maximize efficiency.
First and foremost, you will want to invest in a solid foundation to avoid costly remodels and potentially lose productivity. It takes money to do things the right way, but correct guidance from a consultant will help you avoid potential issues in the future.
It's more critical than you might think, as improperly designed cultivation spaces will reap havoc on your business as the environmental conditions dictate the health and quality of your plants. Suppose your operation's environment doesn't function properly. In that case, you'll either need to rebuild or be forced into using harsher treatment methods (such as pesticides and herbicides) to maintain the health of your crop.
An intelligent building design can save you money on electricity, and labor, prevent accidents, etc. If the building design is improper, it could expose your workers and customers to potentially harmful substances. Having to use harsher treatment methods could also be devastating to your brand.
You will undoubtedly want to hire an interior designer if you're operating a dispensary. Dispensary design is essential because you want your customers to have a great experience and come back again while bringing their friends. Keep in mind almost every dispensary will be carrying similar products – but there are a few differences between them that can create a unique customer experience:
The interior design and decor
How unique and comfortable it looks and feels
Trained expertise and courtesy of budtenders
Overall, hiring a great interior designer or facility architect is important for different cannabis businesses in multiple ways.
Cannabis Security Services
We're all familiar with stories (hopefully not firsthand) of dispensaries being robbed at gunpoint by criminals. It's not just cannabis dispensaries that need to have security. It's a requirement for every legal cannabis business to have video surveillance and an alarm system.
Many cannabis businesses also employ armed security guards to protect their product and their cash, which is sometimes kept on the premises due to limited banking options. In addition to video surveillance, an alarm system, and armed guards, there are additional security measures that are also essential, including safes. Your safe should be fire-resistant as well as unbreakable. Some security companies offer comprehensive solutions, including:
Cash and product tracking
Armored vehicle transport
Pro tip: Ask your insurance agent if they offer discounts for having certain types of security in place.
Cannabis Business Insurance Coverage
Another type of security is knowing that your business is covered by business insurance in the case of an unfortunate event – this could include theft, fire, an infestation of mold, fungus, pests, or whatever else might creep up to put a damper on your profitability.
Cannabis business insurance coverage is relatively new, but it's spreading almost as quickly as legalization throughout.
Prices will vary depending on the state's regulations and the type of cannabis business. According to a 2018 report in MJBizDaily, marijuana cultivator insurance policies range from $20K-30K annually in California, while dispensary insurance policies vary from $10K-$200K annually.
Spend the time to consider what you need to insure. Most cannabis businesses will need general liability insurance (to cover accidents in the workplace) and product liability insurance in case of an issue with product safety. Hopefully, your cannabis consultant will provide the proper procedures to minimize this risk. Always ask your insurance agent to explain to you what is and is not covered, and have your cannabis attorney look over your insurance policy to ensure that there are no loopholes.
Beware of unscrupulous insurance agents who offer policies with loopholes (meaning they won't pay you for your claim) that stipulate insured companies aren't covered if they're involved with an illegal activity or health hazard. In other words, that policy is essentially worthless to a cannabis business. It's a scam.
Do your cannabis due diligence, shop around, and ask for referrals from your cannabis consultant or another trusted ancillary team member. Many states require marijuana businesses to have insurance coverage. Being compliant with state regulations often includes having cannabis business insurance. Either way, you probably want your cannabis business covered by a comprehensive insurance policy, just in case. Otherwise, you could lose everything.
Standing Out From the Competition
The marijuana industry is growing rapidly. To attract and retain your share of customers (whether you are a B2B or B2C company),marketing and PR for your cannabis business are essential. Ironically, after many years of hiding in the shadows, the best way to ensure your cannabis business succeeds is to promote your company publicly.
While word-of-mouth referrals are outstanding, it may take a few years before you get enough of those referrals to generate the type of revenue you need to stay afloat. In the meantime, you may need to hire a marketing consultant and PR firm.
First, you need to understand your customer base and what they are most interested in (even beyond the obvious, cannabis flower and other products). Consider the following:
Are your customers medical marijuana patients or adults buying marijuana for recreational use?
What additional demographic information defines your clientele?
Discover who your potential customers are and where they are paying attention online (and offline).
Be creative and find unique ways and channels to promote your brand.
Building a brand guide is the next step. Hiring acannabis branding professional will help you ensure your brand stands out from your competition. Once you have chosen your fonts, colors, and logo, you will need a cannabis business website. Remember to be consistent in tone and messaging throughout your marketing materials and website.
Cannabis Media & PR Announcements
Social media is one of the best ways to communicate with your potential and existing customers. It's also a great way to listen to people's opinions about your brand and competitors online.
Launching your company (or a new product, or your company received an award) is a good time for a press release. Press releases must be written in a particular way. Hence, hiringa PR professional to write and submit them to various media outlets is best.
Lastly, blogging is a great way to keep current and potential customers informed about the industry and establish you and your company as thought leaders and industry leaders. Also, if done correctly, blogging can benefit SEO (search engine optimization).
Cannabis marketing is a long-term process that requires testing, analysis, and creativity.
Want the Best Chance for Success?
In conclusion, you will need to hire a team of experts from various ancillary services to help you launch a successful cannabis business. Regardless of which area of the marijuana industry you are drawn to –from cannabis cultivation, tocannabis extraction, to owning a dispensary, or a new cannabis ancillary product or service –you will need a team of seasoned professionals to guide you and ensure that your business has the best chance for success.
Are you considering opening a cannabis business? We would love to hear all about it.Cannabis Portugal Consulting is here to provide a tailored cannabis business solution that meets your goals. Connect with us to learn more about our cannabis business consultation services.