How To Succeed With A Cannabis Startup

how to succeed with cannabis startup business

The global cannabis industry is currently worth over $22 billion, and that number is all but certain to increase over the coming decade as more states and countries update their cannabis regulations and permit recreational use. The time is ripe for cannabis startups — but a cannabis business isn’t exactly like any other venture in other industries. The high levels of regulation, the extremely steep competition, the age of the industry and more must be accounted for in canna-business plans if an entrepreneur has any hope for long-term success. 

To that end, here are a few tips for navigating the nascent cannabis industry and creating a canna-startup that can compete: 

Unique Selling Proposition 

The cannabis industry is relatively new, but it is already incredibly crowded. There are hundreds of growers peddling well-known and well-loved strains like OG Kush and Sour Diesel, and there are thousands of dispensaries selling those California weed strains to cannabis consumers. A new canna-business needs to be able to offer something that consumers haven’t seen before if it has any hope of pulling consumers away from the businesses they are familiar with. 

A unique selling proposition (USP) is what differentiates a business from its competition. Sometimes, a USP is merely remarkable branding; other times, it is a new product or service that other businesses don’t yet offer. To succeed with a cannabis startup in the 2020s and beyond, canna-preneurs need to think critically about what type of business they want to launch and how they can deliver something interesting and special to consumers. 

Regional Laws And Regulations 

More than half of Americans believe that cannabis should be legal for medical and recreational use, and the populations of other countries generally seem to agree. Still, the stigma attached to cannabis hasn’t fully disappeared. Though the drug is dramatically safer than once widely thought, governments still closely regulate cannabis cultivation, transportation, sale and use. To avoid serious fines and perhaps criminal prosecution, canna-preneurs need to understand the laws and rules affecting cannabis in the region where they hope to operate and any other regions they might target with growth. 

Most states require certain types of canna-businesses to obtain licenses from special cannabis regulation boards. Businesses also usually need to be compliant with myriad rules of operation to maintain their licenses, and plenty of these rules are impossible to follow without researching and remembering the law. For example, in Nevada, dispensaries need to use a system to track cannabis plants from seed to sale; in Missouri, businesses need to open within a tight timeframe after gaining licensing; and in California, businesses must adhere to strict zoning requirements. Likely, these inane regulations won’t disappear until the cannabis industry has matured, so canna-preneurs hoping to take advantage of the current growth potential need to function as experts in cannabis law. 

Modern Marketing Strategy 

Marketing strategy can make or break any business. For any startup to succeed, it needs to consider how it will reach its target consumers and convince them to spend their hard-earned dollars on this product or service over another. Unfortunately, for canna-businesses, marketing methods can be strictly regulated by state law, meaning canna-preneurs have only a few options for reaching their target consumers and making an impact. 

Perhaps the best marketing strategy for cannabis businesses opening right now is leveraging the power of influencers. Influencers are powerful social media users who have amassed a strong following thanks to their reputation or expertise. Most influencers happily produce sponsored content for brands they believe in, as long as those brands are appropriate for their own professional style. Canna-businesses might turn to younger influencers on platforms like TikTok to find the ideal audience for cannabis consumption. 

Connection To Community And Culture 

The cannabis industry might be young, but the cannabis community is veritably ancient. Though most cannabis-related startups are trying to do something interesting and new, it is imperative that canna- preneurs engage with the community and culture of cannabis in the past and present. Neglecting to understand cannabis users at their core prevents an entrepreneur from developing products and services that stoners need, want and will pay for. Being a member of the cannabis community and continuing to participate in cultural activities will keep business leaders informed and invested. 

Cannabis Company Conclusion

In some ways, launching a canna-business is identical to creating any other startup — every business needs a USP and effective marketing strategy. On the other hand, cannabis is unlike almost every other product, and the more passionately canna-preneurs feel about cannabis, the more likely they are to succeed in 2022.

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