It’s an exciting time to be in the business of cannabis. Entrepreneurs at all levels are finding success in this burgeoning industry.
One thing is for certain though – applying for a cannabis license is way more difficult that any of them ever imagined. Even the most seasoned entrepreneurs.
It’s a complex and expensive process that, once rolling, can move at break-neck speed. And you’ve got be completely focused, totally prepared, and willing to overcome many obstacles.
Are you still up for the challenge? If so, be sure you can answer the following questions before you even set pen to the license application.
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Which License Should You Pursue?
It’s not enough to say, “Hey, ya know what would be a hoot? Getting myself a cannabis business.”
Okay. We know that the VAST majority of folks are not so nonchalant. And having passion for business is great. But you really need a deeper understanding of your specific strengths if you want to succeed in getting a cannabis license.
For example, if you’re thinking about opening a dispensary, then you better be on top of your game when it comes to staffing, cannabis marketing, and inventory management. Or perhaps you’d rather cultivate. How much do you know about commercial horticulture and plant science? The answer should be, “a whole lot.”
So to determine which license is right for you, consider where the best opportunities lie for your particular skillset and knowledge.
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How Will You Raise Capital?
Once upon a time, in the not-too-distant past, there was a deluge of dumb money flowing into the cannabis industry. It was essentially millions of dollars poured into companies run by starry-eyed optimists with great vision, but horrible business planning. You can guess how all of that turned out.
As such, that money has dried up.
So if you were banking on that to cover the insane start-up costs involved with a cannabis business, you’ll need to reconsider. You can still find “smart money” though.
Intelligent investors see this downturn as an opportunity to invest in good companies without having to pay as much. So if you can prove to them how insanely ready you are, they may just sign up – though at a lower valuation. So be prepared for that.
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Who Is on Your Team?
The license application evaluation includes a look at the experience and knowledge of your team. This doesn’t mean you have to have your team completely in place when you apply. But you sure better be thinking about it.
If you’re already noticing a gap in your expertise, think about bringing on a consultant who can help you prepare your business operations.
In addition, how will your team be shaped by your state’s social equity licensing provisions? Many states are incentivizing teams that include applicants from communities most negatively impacted by the war on drugs. If you don’t currently qualify for those incentives, broadening your team could help. Plus, you’ll be bringing in more diverse viewpoints and experiences that will only strengthen your team’s performance.
Speaking of which…
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How Will You Give Back?
The cannabis industry is unique in that it’s built on a foundation of social activism. Yes, there’s money to be made. But long before there was a focus on that, advocates of legalization were seeking a chance to expand freedoms, provide beneficial and life-saving products to people, and reform a long-running and predominantly one-sided drug war.
The industry can only continue to grow through its support of social progress. So as a cannabis business owner, you have a responsibility to take care of not just your patients and customers, but your employees and the broader community of which you’re a part.
Your license application should reflect the ways in which you plan to be a part of something bigger than yourself and how you intend to give back.
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How Long Can You Operate Without a Profit?
That’s the reality, folks.
Even once you’ve got it all going on to submit your application, you need to understand that there will likely be some lag time between putting out your shingle and generating substantial revenue. It takes time to build a client base.
Meanwhile, you’ll still have to pay for employees, consultant fees, legal fees, and your mortgage or lease payments. So how long, realistically, can you swing this?
Run the numbers and plan for worst-case contingencies. Otherwise, you could come crashing down before you even have a single client or patient.
Applying for a Cannabis License Is No Joke
Some might even argue that applying for a cannabis license is harder than running the actual business. But going into it with solid ideas, the right team, and well thought out answers to the above questions, you’re much more likely to reap the rewards.
And there are many.
If you’re preparing to open a cannabis business, you will need the help of experts in cannabis marketing and public relations. We’re here to help. So contact us today. We’re as passionate about this business as you are.