When first I read that BigMike Straumietis is creating The Next Marijuana Millionaire™ reality competition show to help some lucky person become the next cannabis success story, I was inspired to share what I know about starting, planning, and ultimately succeeding in the cannabiz world.
I’ve been mostly a black-market cannabis business entrepreneur, but I’ve also helped people become successful within the legalized industry. Let’s break down all the steps you’ll need to know and do to become successful at running your own marijuana business.
1.Create A Cannabis Industry Business Plan
Creating a business plan is the first step for any successful business in any industry, and that’s also true of the cannabis industry.
There are many books that have been written about creating a rock-solid business plan; there are also classes offered by institutes of learning and business consultants. I recommend you read at least three books on creating a business plan, and attend at least one seminar or college class. Reading Start Your Own Business: The Only Startup Book You’ll Ever Need is a good starting point.
When it comes to creating a business, if you don’t have a map, you’re not likely to arrive at the destination you want to get to. Devise a marijuana business plan, tweak it when necessary, and follow it to the letter!
2. Understand The Legal Issues Facing The Cannabis Industry, And Lawyer Up
If you intend to create a cannabis business in a location where state laws allow for legal marijuana businesses, you’re faced with a decidedly easier path to success than if you live in a prohibition state.
At present, the easiest states to start a cannabusiness are California, Colorado, Washington, Oregon, Nevada, Arizona and Michigan. However, you’re unlikely to be scot-free, as each of these states has its own legal, regulatory and bureaucratic complications, so you’ll need an astute cannabis attorney to explain the local laws in depth.
In legal states, you’ll have convenient access to cannabis attorneys familiar with state marijuana law, while in prohibition states, you have little if any chance of starting a legal cannabis business. Regardless, a savvy attorney can advise you of the risks of starting such an operation, as well as the likelihood and timing of when laws in your state might become more favorable to cannabis entrepreneurs.
Note that industry attorneys often host live webinars and other events so you can access their wisdom, even from afar.
In some cases, if you have a prior criminal conviction involving cannabis or other illegal substances, you won’t be able enter the legal industry. You’ll want to know as much as possible ahead of time, which is why it’s best to consult with a lawyer early on in your process.
3. Understand Cannabis Business Accounting & Banking Practices
Banks, credit unions and financial institutions are hesitant if not prohibited from providing services to cannabis businesses because the plant is still illegal at the federal level.
This legal roadblock creates huge headaches and physical safety risks. Indeed, without legal security protection and the ability for businesses within our community to store cash in a bank, there have been numerous robberies of dispensaries, growers and farms.
Running any business requires accounting knowledge, and many business owners will utilize professional accountants. This is especially useful when it comes to cannabis, as in legalized states there are often financial regulations built into the legalization statutes, and regulations that make accounting harder than it is for other types of businesses.
Fortunately, there are an increasing number of individual accountants and accounting firms specializing in the unique number-crunching challenges you’ll face as a cannabis businessperson.
4. Envisage Your Cannabis Product & Brand
Hundreds of thousands of people grow, sell, process, retail, wholesale or otherwise participate in the legal and black-market cannabis industries already, which means there’s plenty of market competition for budding entrepreneurs.
It’s essential that you visualize a cannabis product and brand that will immediately offer unique value — at least, enough to guarantee profits that’ll make your venture worth doing.
Why not make a reconnaissance mission to the most legalized cannabis states — i.e., California, Colorado, Oregon and Washington — to visit medical marijuana dispensaries, recreational marijuana outlets, grow ops, grow shops and marijuana organizations?
When you see the range of products already on offer and being marketed, you’ll be better able to create unique products and branding that find a profitable audience niche.
5. Define Your Place In The Cannabis Industry
Figure out ahead of time what kinds of cannabis-related activities will make you feel your best when you perform them as part of your new business venture.
For example, many black-market growers are introspective loners who want to work in a quiet grow op away from other people. Those personality types probably wouldn’t want to be the manager of a retail recreational outlet, where dealing with people is a daily constant. These sorts of people would be better suited to creating or expanding a grow op.
Another budding entrepreneur might have a brown thumb instead of a green one, yet very much enjoy interacting with people thanks to their sparkling, engaging, caring personality. That person wouldn’t want to be a grower, but would do well in a business that helps people understand how to beneficially consume cannabis, or as a staff manager for retail medical marijuana or recreational cannabis outlets.
I know a person who loves nothing more than cooking and baking, so the obvious career choice for them is to become a medibles and edibles maker. They did just that, making delicious and potent medical and recreational marijuana munchies, and is supremely happy in their chosen field.
It isn’t enough to create a canna business that makes you rich. You want to also create one that matches your personality, talents and disposition.
6. Understanding Money & Personnel In A Canna Business
Locking down your financing — and protecting yourself financially so that a possible business failure doesn’t render you homeless — is tantamount when you’re starting any business, but especially a business that might be legal in your state, yet remains federally illegal.
This is another reason why you’ll want to talk to a cannabis attorney and a cannabis accounting firm upfront.
Another consideration for all but the most isolated solopreneurs is who you are going to work alongside. Many business failures are due to the boss hiring the wrong people, poor business relationships with staff, or being betrayed, even ripped off due to lack of business loyalty. Indeed, many a grower has been robbed of their product by an unscrupulous trimmer crew.
The cannabis industry has an embarrassing problem in that it attracts chronic, somewhat brain-addled stoners who might not be in control of their cognitive faculties. I’ve seen plenty of grow room and cannabis business disasters that happened because somebody was too stoned to do their job properly.
The industry also attracts cannabis cowboys, outlaws, and “adventurous” people who don’t always play by the rules. They may be narcissistic and selfish, so they put their interests ahead of yours.
Better be safe than sorry. No matter how well you think you know someone, be sure to carry out a thorough background check on anyone you’re considering for any role within your organization.
The good news is there are plenty of smart, ethical, honest people in the cannabis community, and taking the leap by planning and starting your own marijuana business could ultimately be the best decision you ever made. Success, fulfillment, and an exciting career could await you in the booming bud market.