Cannabis in Europe is currently wildly inconsistent when it comes to legislation, requirements, and even the product itself. However, several EU member countries are opening their minds to the benefits of both medical and recreational cannabis. These potential markets present huge opportunities for cannabis operators to break into Europe. Here’s what we know about the current state of cannabis in Europe and where it might be headed.Continue reading
Since Colorado first opened its doors to recreational cannabis in 2013, there’s been a seismic shift in public policy that’s now beginning to reverberate around the world. Nearly 60 years ago, the United States essentially forced cannabis prohibition worldwide through international drug treaties. Today, legalization throughout the U.S. will likely create a domino effect. Cannabis consulting will soon be needed on an entirely new — international — level. Here’s what you need to know to get ready for a global market and how HYC can help.Continue reading
Over the last several months, Illinois seemed as though it were becoming a paragon of cannabis legalization and social equity within the industry. Unfortunately, a complete lack of transparency and communication has left many cannabusiness owners down and out.
Although this situation will inevitably turn into a lengthy legal battle, it isn’t all bad. The mistakes made in Illinois expose where social equity programs fall short. As a result, other states can learn from these mistakes and implement more successful programs in the future.
Here’s everything you need to know about the straight-up blunder that’s happened in Illinois and how you can recover if you’ve been affected.
Social Equity Programs Looked Bright in Illinois
Ideally, we wouldn’t have to discuss this issue — better yet, we’d be talking about how successful Illinois’ program was. Instead, we’re forced to focus on where it all went wrong. But if you’re still curious to know what a best-case scenario would’ve looked like, we’ve got you covered.
In a perfect world, all applicants would have submitted their applications to be independently scored by a private entity — in this case, KPMG International. KPMG would have blindly reviewed all submissions and sent “Notices of Deficiency” informing applicants of any operational changes they needed to make in order to be approved.
By showing social equity candidates exactly what to fix, this process would have leveled the playing field for them. In fact, one-fifth of the application consisted of questions designed to determine social equity status and give an inherent boost to such applicants.
Once the approval process had been completed, all successful applicants would have been entered into a random lottery. Subsequently, 75 dispensary licenses would have been promptly awarded.
Unfortunately, we don’t live in a perfect world, and that’s not at all what really happened in Illinois.
Applicants Pay the Price for a Grossly Mishandled Process
Illinois’ social equity program should have been transparent and successful. Rather, the entire process has turned into an opaque, suspicious fiasco for which applicants have paid the price.
KPMG was awarded a $4.2 million no-bid contract by Illinois to score social equity applications. In another exclusive deal, KPMG was awarded $2.5 million to score an additional 80 agricultural applications. The contract required applications to be scored anonymously as well as Notices of Deficiency to be sent to all unapproved applicants.
However, the majority of unapproved applicants didn’t receive their Notice of Deficiency. Moreover, the ones who did receive a notice received it directly from KPMG. This means that KPMG had access to the identities of all applicants and that the process couldn’t possibly have been carried out blindly.
In the end, only 21 out of more than 900 applicants were entered into this 75-license lottery. Many of these 21 applicants represent large, multi-state operations rather than social equity candidates for whom this process was intended.
To make matters worse, one of the 21 approved applicants is an employee of KPMG.
We may not yet understand how this fits into the whole narrative, but we do know that it’s a blatant conflict of interest. Furthermore, the lack of anonymity in the scoring process raises some serious questions about how this applicant was approved when hundreds of others were not.
All Is Not Lost for Social Equity in Cannabis Legalization
In the face of this debacle, all is not lost. Luckily, there’s still hope for social equity candidates both in Illinois and around the country. Politicians, local governments, and affected applicants all have the power to improve their own situations as well as those of their communities.
What Political Candidates Can Do
For political candidates running on the platform of legalizing cannabis, it’s crucial to know what you’re getting into. The legal cannabis industry isn’t as easy as it looks. Doing it right is incredibly difficult, but that’s how it must be done. If you’re running on this platform, look for experienced consultants to help you do so.
What Local Governments Can Do
Local governments can make or break cannabis programs. In order to ensure the success of legalization and social equity efforts, governments should work with organizations that are involved and experienced in the cannabis industry.
For instance, here at Higher Yields Cannabis Consulting, we’ve built an elite team of experienced cannabis professionals. Just take a look at Erik Range, our DEI Engineer and Minority Cannabis Consultant!
What Affected Cannabusinesses Can Do
For anyone affected by the social equity program in Illinois, we understand that this is a stressful time for you and your colleagues. We’re here to help. At Higher Yields Cannabis Consulting, we have a team of experts who will help your cannabusiness get back on its feet. Ask us about our Pivot Program designed specifically for cannabis businesses who have been affected by lost license applications and changing policies.
Contact us today to schedule a consultation today and learn more about how we can help.
5 Tips For Finding Cannabis Real Estate
You’ve decided to open a cannabis business, but first thing is first. You need a piece of real estate to operate on.
Finding the perfect piece of real estate is usually the first step in applying for a cannabis business license, whether it is for a dispensary, a cultivation operation, an extraction lab, a consumption lounge or a distribution headquarters. No matter what aspect of the cannabis space you hope to work in, your property choices will be a huge factor in the success of your application – and your eventual business. Planning ahead to make the right choices on property can be the difference between colossal failure and a thriving business.
Commercial Cannabis Real Estate Properties – Where to Start?Not sure where to start? You aren’t the only one. But don’t worry. John Valdez, Higher Yield Consulting’s top real estate broker and VP, is here to help with our best tips for finding the right cannabis real estate for you. Read on to learn how to find your ideal property and set your cannabis business up for success:
1. Location, Location, Location is Paramount When It Comes To Commercial Marijuana Real Estate
The old saying about what’s most important in real estate “location, location, location” applies to cannabis as much as anything else. When you are choosing where to operate your business “the main thing is your location” explains Valdez.
Still, the considerations about location might differ depending on your business type. So think about what your business will need to thrive. For example, Valdez suggests that “if you are doing a cultivation facility, you want to build that close to transportation, where you can get your product out the door soon as you can.” On the other hand, Valdez says that “if you’re doing a dispensary, you want to make sure that you have good foot traffic, because you want a location where you’re clients are able to get to you easily.”
Your location will have a big impact on what you can really do with your business so make sure you find the right place to launch – with everything your business needs to succeed.
2. Learn the Local Cannabis Business and Real Estate Regulations
As you consider location, you should also learn about the local regulations for cannabis businesses in that area. It’s no good finding your perfect piece of real estate only to realize that it doesn’t have the right zoning for your business type. And these local regulations can be much more complicated than just zoning.
“Zoning is a key thing,” explains Valdez “but you want to make sure that the municipality is allowing that type of use.” There are so many aspects to these regulations, it can be easy to overlook something. “I’ve been working with consumption clubs lately” Valdez offers as an example, “and in Colorado setbacks are different for consumption clubs than they are for a dispensary.” Tiny errors on calculations for things like setbacks can be the difference between buying a usable or unusable property. So make sure you have experts on your team who can delve into the local laws and understand what you need.
3. Find a Broker and Cannabis Real Estate Team You Can Rely On
When it comes to your real estate broker, make sure you find someone who you can trust to navigate the complicated task of finding your property. “A broker that’s in the cannabis industry is crucial to having a successful closing and start up to your company” explains Valdez. “If you have somebody that doesn’t know what they’re doing, you can tie your project up for a long time before you even start that application.”
For this reason, Valdez says “one of the biggest things that I would recommend to you when you’re looking at real estate for cannabis is hiring a professional, not only a professional broker but hiring a professional team.”
Cannabis specific real estate brokers understand the rules and regulations involved in using a property for cannabis and they already have contacts in the space. This is needed for finding the right property. Still this knowledge could be strengthened with the help of a good consultant. “Brokers should have a general idea of what the local restrictions are going to be, but having a consultant to verify it is also going to be key” says Valdez.
In addition to your broker and consultant, a good design expert is also a crucial member of the team. They can help assess what improvements might be needed to make a property functional, so you can make an informed purchase.
4. Pay Attention to Available Services
When considering a property, you should also look at the services available. Depending on your business, you may need particular services like access to enough electricity to power an indoor grow, or good internet access for a business headquarters. Whatever your service needs, you may want to find a property that already meets them. “What kind of service is on the property?” asks Valdez “Because your electrical service, your heating, your air conditioning service, those are things that you want to take a look at because those are high dollar items.”
You might plan to just upgrade your services when you move in, but in some areas upgrades aren’t possible or are extremely expensive. It’s best to plan and budget all of this before you make the final purchase. The last thing you want is to buy a property that you can’t make work.
5. Consider Retrofitting a Potential Cannabis Property Carefully
This brings us to the last tip – consider retrofitting carefully. When you are deciding whether to build a new building, retrofit an old one, or just find a property that already has what you need, it might seem like retrofitting is the cost saving option. But that’s not always the case – so a cost/benefit analysis is key for this decision. “For retro-fitting you want to make sure to see what you’re going to be able to salvage and what the build is going to be on it” explains Valdez.
To figure this out you need to know how much are you going to have to spend on the build out for a retrofit or renovation on the property. “Sometimes you can look at it and say, ‘hey, it’s going to cost us an extra $800,000 to build this out.’ Let’s take a look at building a facility from dirt.”
Before buying your property, think carefully about what kind of site improvements will be required. When these improvements are ignored, something as simple as a sprinkler system could add hundreds of thousands of dollars to your costs.
The Importance Of Commercial Cannabis Real Estate
Those are our best tips for finding your perfect property, but they just brush the surface of this complicated process. If you are still feeling confused on how to proceed, Higher Yields Cannabis Consulting can help. Our knowledgeable consultants have helped cannabis businesses in over 30 states to find the right property and successfully launch. We can help your business navigate the process as well.
Share this Article
The Latest from our cannabis consulting blog
How to Build a Strong Cannabis Dispensary Team
Building Your Cannabis Business Executive Team
Opening a dispensary can be a big project, with a lot of steps along the way. But one of the first and most crucial steps in putting together a successful dispensary plan is building a strong executive team. These foundational decisions about who will join your team can affect every other aspect of your business, from applying for a license, to day-to-day transactions with customers. Making sure you have a strong, cohesive team of experts will set you up for success and ensure that your dispensary gets off on the right foot.
Not sure where to get started? Here are our top tips for building your executive team:
Cover Needed Team Roles
While building your team, it’s important to start by considering the important roles that need to be filled to create a successful dispensary.
Your executive team should include a CEO or someone who is heading up the vision of the project, as well as a strong financial partner who has the funds to make your business dreams a reality. You will also need someone with the experience and skills to keep the books, and make sure your financial plans for the future stay on track.
Having a director of retail operations is also must for any dispensary. This person will run the sales side of things, which is key for the dispensary model.
Another important role is the compliance officer. There is a lot of red tape, and tricky regulations to navigate when opening a dispensary. Having someone focused entirely on keeping your dispensary compliant will help avoid a lot of risks and headaches for your business.
Because dispensaries tend to employ a lot of staff, having an HR director can also help. You will need to stay compliant with employment law, and manage things like health insurance and employee complaints. An HR director can focus entirely on these tasks.
Another important role is the Director of Security. This person will create a security plan for your dispensary, and ensure the safety of your staff, customers and product.
Finally, some states actually require a doctor or pharmacist be on the team. This isn’t always the case, but even when it isn’t – this expertise can be a big help on any team.
Filling all these roles is important, but this can be done in so many ways. Sometimes one person takes on a multiple roles, or some roles might be filled by consultants or temporary hires. What’s key is that someone is responsible for each of these areas. So start a list of the roles you need filled and look for the best people to fill them.
Fill Your Team with Experts
As you begin to find candidates for your team, consider their level of expertise. To set yourself up for success, look for experts in whatever role you are filling. Sometimes these experts come from the cannabis space, and have a lot of direct experience working with this plant and industry. In other cases, your experts might come from other fields but have expertise in a particular role (such as sales, HR, real estate, or book-keeping). What’s important is that they have a strong skill set for the kind of work they will be doing in your company.
Check Track Records
It’s also a good idea to check a candidate’s track records. Have they had a lot of success doing the kind of work they will be doing for you? In many states, applications are judged based on merit. This means they are more likely to give out licenses to those with a strong proven track record for success in cannabis, making money and paying the bills on time. If you put together a strong team with members who have a history of success in the type of work your company will be engaged in, you may have a better chance at having your dispensary license application approved – and you’ll also be set up for a successful business.
On the other side of things, you might want to do some background checks on the people you’ll be teaming up with. Criminal records never look great on a license application.
Include Locals in Your Cannabis Dispensary
While expertise is key, location can make a big difference as well. If you are opening a dispensary in an area that you don’t live, teaming up with some locals is a great idea. Most local governments aren’t friendly to the idea of people coming in from outside to create cannabis businesses, and make money off their citizens without creating any jobs. If you’re team is coming in to a new location, having some locals on the executive team can help to build a local presence and show regulators that you are interested in bringing jobs to the local community.
Consider Culture Fit
It’s also incredibly important to consider the culture fit between members of your team. Even if you put together a team full of brilliant experts – if they can’t get along, your business may be doomed to fail. Many businesses fall apart because of conflict on the executive team. So make sure that your team makes sense as a cohesive unit before you launch into a business together.
Use Cannabis Consultants to Fill in Gaps
While an ideal dispensary plan might include all the roles listed above, it’s not always possible or necessary to have each of these roles filled by a full-time employee. A more pared down executive team can sometimes make more sense, as it can be more affordable and agile. The smaller your operation, the more likely it is that a smaller executive team makes sense for you.
If you find that you can’t fill all the roles listed with a full time staff – don’t worry. There are so many options for services and consultants who can fill in the gaps. From HR services, to lawyers, to CPA’s, there are a lot of experts who can be hired to do specific work so your staff doesn’t have to. If cannabis specific expertise is what you need, you can also find cannabis specific consultants who can guide you through the complicated details of this highly regulated, high-reward industry.
At Higher Yield Cannabis Consulting, we’ve helped many executive teams fill in the gaps in their cannabis expertise, and successfully launch into the cannabis space. We’d be happy to help fill the gaps in your team as well – or help you find team members that are a perfect fit.
Share this Article
The Latest from our cannabis consulting blog
5 Tips for a Successful Cannabis Dispensary License Application
Getting started on your cannabis dispensary license application? It can be a complicated process! Just ask Higher Yields’ application writers and consultants. We’ve been awarded licenses in over 13 states, in both the adult use and medical markets, and it hasn’t always been an easy road. But with the right approach, getting approval is within reach.
Here are our top 5 tips for a submitting a successful cannabis license application:
1. Don’t procrastinate! Plan ahead to finish your application on time.
This tip might seem obvious, but many applicants put off working on their application until the time is almost up. The last thing you want is to end up in the 11th hour throwing things together without much intention.
Each application has a big list of requirements, and it’s important to make sure each section is strong and complete. Plan ahead and delegate sections so you can make sure you have time to finish with a competitive application.
2. Put together a strong team with a good business history.
In many states, applications are judged based on merit. This means they are more likely to give out licenses to those with a strong proven track record for success in cannabis, making money and paying the bills on time. Put together a strong team with members who have a history of success in the type of work your company will be engaged in. You should have some experts in your field, a strong financial partner, and consultants with the experience to fill in any gaps. Some states even require a doctor or pharmacist be on the team.
Your application should be built around the strengths of your team, so make sure it is a team worth highlighting.
3. Create detailed operations plans.
It’s important to create detailed operations plans for your application. This is one of the harder parts to put together, because it requires someone experienced in the industry who can really understand the day to day operations of your business. This can be a challenge because many business owners don’t know the details of day-to-day operations that haven’t started yet. These plans need to cover everything involved in your business including things like compliance, community engagement, record keeping, audits, security and more.
This is once place where consultants can be extremely helpful. We have thousands of pages of operating plans already created, which can be cut down and customized to your business.
4. Find the right real estate – but buy on a contingency.
Another crucial aspect of your application is the real estate. You need to find just the right property to house a cannabis business. This property should meet all the zoning requirements of your state, and local jurisdiction, and be suitable for the day-to-day needs of your business. But once you find that property, you also have to convince the owner to let you purchase or rent on a contingency. This is easier said than done, since many owners don’t want to wait around for months to see if your approved, but it is important. That last thing you want is to end up with a unusable property, if your cannabis license application is denied.
Finding the real estate on contingency is one half of the battle, but then you will also need to get the local government to approve. Some jurisdictions have officials that just want to help applicants get going and start bringing in some tax revenue, but others are trying to slow things down and make things difficult. Finding real estate in an area that’s more friendly to cannabis business can make a big difference.
5. Build a local presence.
Wherever you decide to start your business, it’s important to build a local presence. Most states and localities aren’t crazy about people coming in from outside to create cannabis businesses, and making money off their citizens without creating any jobs. So, it’s important to have a local team, or at least have members of your team that are local.
Moving to the area for even a few months before you submit your application can also make a difference. Get involved in the local cannabis community, go to the local political meetings and town hall meetings about cannabis, meet the decision makers and show your investment in the community. Establishing strong relationships with regulators can help later when they are grading applications. Plus, attending these meetings gives you a front row seat to new developments, so you won’t get caught off guard to any changes in the local cannabis policies.
Need some help with your application? Higher Yields Cannabis Consulting can help. Our knowledgeable consultants and application writers have helped cannabis businesses achieve licensing success in over 13 states. We can help your business navigate the process as well. Contact us to get started creating a cannabis license application that stands out from the crowd.
Share this Article
The Latest from our cannabis consulting blog
3 Big Mistakes to Avoid on your Cannabis License Applications
The Complex Cannabis License Application Process
Writing a cannabis business license application isn’t always a walk in the park. It’s an extensive project that requires expertise, planning, and a lot of hard work. So there are few things more frustrating than attempting to go through this long process only to have your application denied.
Unfortunately this is often the situation for cannabis entrepreneurs who are looking to build a new business but unaware of the common pitfalls and problems that might arise while applying.
At Higher Yields Consulting we’ve helped applicants in 13 different states achieve licensing success, so we know just how tricky it can be. To help you out, we’ve created a list of the 3 biggest mistakes you can make while applying for your cannabis license application.
1. Underestimating the Cannabis License Process and Procrastinating
Perhaps the biggest mistake that applicants make when applying for a cannabis business license is to underestimate the work and time it will take to finish. Procrastination is tempting, especially when you may be delayed on finishing certain sections while you work out the details. But this procrastination can be the kiss of death, leaving applicants bumping up against their deadlines without time to actually complete the hefty application.
Instead of procrastination, make sure to plan out every aspect of your application. It may seem like one big project that you can knock out when the time is right, but it’s actually a lot of smaller projects, like building a team, creating the operational plans, meeting regulations, recruiting, real estate, development, and financials. Each one of these is their own project and needs to be taken seriously and meticulously planned out in advance. Finish your application early and make sure to have the most detail oriented person on your team look it over. Make sure every section is complete and properly filled out, so you don’t get rejected over a technicality.
2. Doing Your Cannabis License Application on Your Own
As we mentioned above, completing your application is a huge endeavor, so don’t try to do it all by yourself. This is a common mistake that usually ends poorly. The most successful applications are usually put together by a team of cannabis professionals working together, not a single individual.
Plan out with your team who will complete each section, so you can all start working, filling out your individual pieces in tandem. For each section of the application, make sure that the person writing it has the expertise and experience to do a great job. This means you should either have that expertise already present on your team, or find consultants who have the knowledge to help you fill in the blanks. You will need a lot of different people and you need everybody to be moving forward together at the same time. Make sure roles and responsibilities, as well as internal deadlines are clear for everyone involved, so that you can stay up to date with your external deadlines, and never miss the deadline for turning your application in.
3. Saying Too Much on Your Cannabis License Application
One other common mistake that people make on their application is saying too much about their future plans. Maybe you are applying for a cultivation license but you’d also like your business to do work with extraction. Some applicants might think it makes sense to share their future extraction plans while describing their cultivation plan. But these details aren’t relevant to those who are deciding about your cultivation license and could actually cause confusion or problems.
For example, regulators might think that you are planning to do extraction based on only the cultivation license and get confused. Or maybe your local regulators aren’t as friendly to extraction as they are to cultivation, and would see your cultivation plan less favorably knowing your other plans for the future. Either way, sharing too many details can get in the way and cause big problems.
Instead, stay focused on a clear, simple and consistent plan, one that is relevant to the the license type you are applying for. You can always do planning in the background to prepare for the future. Just don’t add it into your current application.
Looking for help with your application? Our knowledgeable consultants and application writers have helped cannabis businesses achieve licensing success in over 13 states. We can help your business navigate the process as well.
Share this Article
The Latest from our cannabis consulting blog
Creating a Cannabis Business Plan
Cannabis Business Plan – Where to Start
Trying to start your cannabis business plan? It’s one of the most important documents you’ll create when it comes to the success of your business, so it’s worth putting in some time to get it right. Not only should this lay out all the details of how you’ll pull off your big cannabis business idea, but it is also the document that investors will look at to decide whether your business is worth taking a risk on.
At Higher Yields Consulting, we’ve helped many entrepreneurs to craft successful business plans that entice investors and set up a business for success. So, we thought we’d share some tips on how to create a business plan that makes investors take notice.
Gather All The Pieces for s Successful Cannabis Business Plan
Once you have a strong idea for your cannabis business, you’ll want to spend some time figuring out what you need to make it happen. You may already have some pieces of the picture in place, so start with what you have and then figure out what else you will need. Perhaps you already have a strong team, but need to find a piece of real estate to operate from. Maybe you already have a piece of land, but you need a financial partner to fund development of the property.
Get together the details of everything you need to make this cannabis businessplan to work, such as real estate, a strong team, a business strategy, and well developed financials. If you find something is missing, research and then describe what it will take to obtain it. This could mean spelling out the cost of the real estate you’d like to purchase, or the cost of recruiting that expert you need on the team. Whatever it is, if it is required to make your business function, it should be included in one way or another in the business plan.
Create a Strong Strategy with Cannabusiness Financial Plans
Creating a strong strategy with realistic financials is also a huge part of the battle when it comes to making a successful business plan. Your investors want to know that you have a strategy for how to create and sustain this business in its current market. Consider how your business will stand out from the crowd? Do you have any competitive advantages when compared to the competition? How will you grow your brand and market share over time? Developing this part of the plan can take a lot of creativity and business experience. But, it is also the part of your plan that lays out how you will move forward. If it isn’t well developed – you probably aren’t ready to start a business. If you aren’t confident in what you have, find help from consultants or other experts in the field to develop something great.
Include an Exit Plan
One of the most important parts of a business plan, from an investor’s point of view, is the exit plan. You might think it’s bad form to talk about what might go wrong in your business, while trying to convince an investor to fund your project. But actually, this is one of the key aspects of the plan that investors look for. While your investor might believe in the business and its potential for success, they also know that 90% of startups fail, and this one might too. So investors want to know that there is an exit strategy for how to recoup costs if things don’t go to plan. This might be as simple as reselling or leasing the property that was being used, or even selling off your cannabis license to a bigger player in space. So look over the assets you have or want to acquire. What could you do to recoup funds if things go south and you need to shut down?
Get Help Filling in the Gaps
It’s not at all unusual for an entrepreneur to feel overwhelmed by the task of creating a business plan. It’s a big task with a lot of complex pieces, and it requires expertise in a lot of different areas. If you are doing it by yourself, you’ll likely find there are gaps in your knowledge where experts might be able to offer assistance. There is no shame in asking for help. This business plan will set up your entire operation for success or failure so find help from consultants or other experts to fill in the gaps.
When we work with clients at Higher Yields Consulting, we utilize our experience to help steer them in the right direction. We’ve been through business plan creation so many times, and can help clients develop a strong strategy, build solid financials and avoid common pitfalls in the planning process. We can even help navigate tricky questions like how much equity to preserve while still making an enticing offer to investors.
If you need help crafting your business plan, contact us to see how our team of consultants can help you create a plan that will stand out from the crowd and make investors want to sign on the dotted line.
Share this Article
The Latest from our cannabis consulting blog
Cannabis Business Planning 101: Finding Your Big Idea
Planning For Your Big Cannabis Business Idea
The green rush is here. With more and more areas in the US and abroad shifting their policies to allow for legal cannabis, the marijuana industry has become the fastest growing industry in the world. Still, while many want to get involved with the space and cash in on the rapidly expanding market, not everyone has found a big cannabis business idea that can can stand out against the competition. Let our consultants help you understand proper cannabis business planning from the ground up.
At Higher Yields Consulting, part of our work is to help cannabis entrepreneurs brainstorm big ideas that can bring even bigger returns. So we thought we’d share some of the basic steps you can use when brainstorming your own big idea.
Assess Your Expertise – Do You Need a Cannabis Business Consultant?
When we work with clients on brainstorming business ideas, we usually start by assessing their team and the expertise they bring to the table. So to get started with your own brainstorming session, consider the backgrounds of the people on your team. What skills do they have which might transfer to the cannabis industry? If someone comes from real estate, this could be helpful for more real estate driven business models. Does your team have a background in sales? Perhaps distribution is a good fit. Come from a manufacturing background? You might do well with extraction or product manufacturing. Got a talented chef in the mix? Try doing something with edibles. Will you need to bring in cannabis business consultants to help you accomplish your goals?
Whatever skill sets are present on your team should be the starting point for your brainstorming process. There is no point moving forward on a brilliant business idea, if your team won’t be able to actually pull it off. So make sure you design a plan that speaks to your expertise and feels like something you can make happen.
Cannabis Business Planning – Understand Your Market
While it’s key to start with your own teams expertise, you also have to find an idea that fits into the market you are working in. Even if you craft the perfect plan for your team, if it doesn’t work well in your particular area, it’s just not the right idea. So you will also have to look at where you are at, and how to modify your plans so that they make sense in that context.
Part of this stage is looking at the cannabis services already available in your market. You want to notice if there are gaps (areas where a service or product is needed) or areas of over saturation.
For example, in Colorado there is an over saturation of cannabis cultivators, but much fewer cannabis dispensaries. In this market you can make a lot more money opening up a cannabis shop than you could trying to compete as a cultivator with a stand-alone grow facility. So if cultivation is your team’s skill set, but your in Colorado, a market that is over saturated with cultivators, you’ll need a good plan. You might consider a plan that includes vertical integration so you can cash in on your growing skills by selling your cannabis through your own storefront. These market factors can be the difference between success and failure, so you should always take them into account when you are brainstorming your big idea.
Calibrate Your Financials
Finally, it’s important that your idea has the financials to support it. It’s great to dream big, but you need to have a realistic plan for reaching those big goals. If you know you have a certain budget, make sure that your plans are achievable within that budget. If you are courting investors as part of the process, you’ll need to have a strong business plan with a financial strategy that shows you understand what it will take to make your idea happen, and how much return your investors can expect to get back. Your numbers need to make sense with your plan and show that the business can be profitable. This will not only put investors at ease and increase the likelihood that they will want to invest, it will also ensure that your plan has it’s best chance at success. All in all, it will save you a world of heartache and stress later down the line.
If all this sounds like a big project, it certainly can be. Planning a successful new business isn’t a simple task. After all, 90% of new startups fail. That’s why getting advice and insight from expert consultants can be a big help. From brainstorming, to sharing insider knowledge about the different cannabis markets, to assisting with the complicated financial planning, our consultants have a lot of experience with this part of the process. Feel free to contact us for help or advice on finding your big idea.
Share this Article
The Latest from our cannabis consulting blog
Medical or Recreational Cannabis Licensing: What Type Should You Choose?
Medical vs. Recreational Cannabis Licensing
The cannabis industry is in a serious boom time. As state after state continues to open up regulated cannabis markets, the opportunity for new businesses to enter the cannabis space is huge – and only growing. Still for many just starting the process of applying for cannabis licensing, there is one big question to consider: should you be applying for a medical or a recreational cannabis license?
While many states make this choice easy, by allowing for only medical cannabis, states with recreational cannabis often offer both options. This gives applicants an important choice between becoming a medical or recreational cannabis business. Whether you are building a dispensary, a grow facility, an extraction lab, or an edible brand, your status as a medical or recreational cannabis business can affect your success in the long term. So it’s important to consider the options carefully and make sure that you are making the best decision for your brand.
Trying to decide for yourself? To help with your decision, we’ve outlined some of the main factors that smart cannabis businesses use when determining which license type to go for. Read on to see what considerations might apply to your cannabis business.
Reasons to Apply for a Recreational Cannabis License
Thinking about applying for a recreational cannabis license? You aren’t the only one. In states where there is an option, most businesses go with the recreational license. In fact, it is such a big trend that in states with recreational licenses, medical cannabis businesses seem to be dying out almost entirely. Why? Well there are a few reasons that businesses overwhelmingly choose recreational:
1. Recreational cannabis has a broader audience.
One of the main reasons that businesses prefer to apply for recreational licenses, is the broader audience that recreational cannabis can bring. While medical cannabis can only be purchased by someone who has had it recommended by a doctor, recreational cannabis can be purchased by anyone of age. This expands the potential reach of your brand considerably, and removes an obstacle your customers would have to navigate in order to purchase from you. As a cannabis business plan, it just makes sense.
2. Recreational businesses don’t have to deal with medical regulations.
Similarly, recreational businesses also don’t have to deal with the paperwork and business processes associated with medical cannabis. With medical cannabis businesses, all clients have to have up-to-date doctor’s recommendations for medical marijuana. Making sure each customer has their paperwork in order can be a big logistical headache. Recreational makes things simpler by eliminating these requirements.
3. Recreational has more income potential.
Ultimately though, the real reason that businesses choose recreational is simple – recreational cannabis businesses have more income potential. With a much broader audience, that can include recreational and medical cannabis users, the recreational space offers more potential for growth and success.
If you can apply for recreational cannabis – you probably should. From a financial standpoint, recreational cannabis is the almost always the best choice.
Reasons to Apply for a Medical Cannabis License
While a recreational cannabis license is an obvious first choice for those who have the option, there are also sometimes good reasons why people choose to apply for a medical cannabis licenses. Even in states with both, in some cases, medical could be the right option for the particular business applying. Here are some of the main factors that lead people to choose medical:
1. There are no recreational licenses (yet).
Likely the biggest reason to apply for a medical license is simply lack of options. In states or towns with only medical licenses available, businesses will have to apply for medical in order to become licensed at all.
Still, even if your eventual goal is to become a recreational cannabis business, applying for a medical license can be a crucial step in the right direction. “Generally you want to get the first medical license because the people who get the medical licenses will have the first chance to convert into recreational states,” explains Cory Waggoner, Founder and CEO of Higher Yields Cannabis Consulting. In competitive states, such as on the east coast where there’s only 5-10 licenses they are handing out, getting one of those first medical licenses can put you in the best position to go recreational when it eventually opens up in your state. As a cannabis businesses that’s already functioning and operating, and has been through the cannabis permitting and licensing process, you will be in a great position to apply for a recreational license.
2. You are targeting the medical market.
Another reason to go medical is because you are targeting a specific demographic that is more likely to choose a medical brand. There are still a lot of people who want medical cannabis, specifically. If you are target marketing medical patients, it may make sense to go with a medical license. Take California, for example, where cannabis is taxed at a higher rate for recreational users than it is for medical patients. In states with this kind of tax difference, many patients don’t want to pay the extra taxes, and so may be more loyal to medical businesses. As more and more businesses target the recreational sector of cannabis, smart entrepreneurs may be able to make a strong niche for themselves outside of the adult-use market.
3. The medical regulations may work better for your brand.
A final consideration that might push some businesses towards medical is the differing regulations for medical and recreational products. While you might think that cannabis compliance would be stricter for medical, in some cases it is just the opposite. For example, in Colorado, you didn’t even have to test medical marijuana until a recent change in the regulations. While recreational cannabis had to be tested for contaminants like mold and pesticides, medical was allowed to go to market untested. These more relaxed regulations may have worked better for some brands. Medical markets also sometimes allow for edibles to be sold with higher dosing. In California, for example, edible dosing for recreational cannabis products are capped at 100mg per package. However medical cannabis businesses can offer products with dosing as high 2,000mg per package. If you are a brand who focuses on high potency edibles, a medical license may work better for your product line.
The Best of Both Worlds: Applying for Both Medical and Recreational
Of course another option is to simply apply for both medical and recreational licenses. This move may be your best option, if you can afford it. For one thing, it lets you serve everyone – which increases your income potential considerably. On the down-side you will have to pay fees for each individual license, and may need separate locations and cannabis tracking systems for each side of your business. Still, this option hedges your bets in a big way, especially if your local government seems likely to waver on recreational cannabis. “If they have a moratorium for a few years and then they decide they don’t want cannabis anymore, they’re probably going to start with recreational” explains Waggoner. Having both medical and recreational could help your business survive even if recreational cannabis businesses are shut down.
Do You Need Help Deciding Which Cannabis License Type Is Right For You?
So which option should you go with – a medical or recreational cannabis license?
“I think it really just comes down to opportunity,” says Waggoner. “Where’s the opportunity to make money?” The answer really depends on your particular cannabis business plan, and the regulatory landscape in your state and city. The opportunities available to you makes all the difference in answering this question.
Need some help deciding? At Higher Yields Consulting, our knowledgeable staff has helped over a 100 cannabis businesses through the process of cannabis permitting, licensing, and achieving full cannabis compliance. Our clients have achieved licensing success in more than 13 merit-based states and 7 countries, and we are happy to assist your business navigate the complexities of cannabis licensing.