Is it time for some “growing up” in the cannabis industry?

We in the cannabis industry have slowly realized that we need to mature. Gone are the days when reckless judgments and rules were made whenever it suited us. It is now up to us, as owners and shareholders of the company, to increase our level of professionalism in order to prepare for what lies ahead.

If we don’t, as CEOs of a vertically integrated cannabis company, we’ll come back to this coming-of-age theme many times over the years. This post provides in-depth information from reputable cannabis stakeholders in the US cannabis market on their views on navigating the cannabis market.

finance and banking

According to Sanat Patel, chief lending officer for AVANA Companies, a financial services firm focused on the cannabis industry, one of the most critical questions cannabis company executives constantly ask is: What makes your merchandise different from another company’s merchandise? ? Any commodity industry must accept the inevitable shrinking of margins as a necessary part of doing business.

Patel emphasized that one of the biggest barriers for cannabis business owners is access to financing. In order to weather financial setbacks and market volatility, it is imperative to raise more money than you think you need.

He advised business owners to ensure their business has access to enough financing to see it through the start-up phase, taking into account contingencies and additional cash flow support until they can raise more cash.

Other advice he gave was:

• Have a basic understanding of the customers you are trying to attract and be able to communicate with people about them

• Involve at least one member of your team with highly qualified finance professionals including accounting, cash flow modeling and communication with financial institutions.

• Create worst-case scenario plans for your business during both the startup and development phases, taking into account potential financial shocks and other issues your business might encounter.

Law of Cannabis Finance

Sundie Seefried, CEO of Safe Harbor Financial, has been providing financial services to cannabis companies since 2015. Seefried cautions that cannabis business owners need to understand the Cole Memo, because despite your belief that everything you do is legal, any suggestion of illegality will keep tabs on your finances and trigger audits.

The Cole memo addresses eight issues: preventing underage access to cannabis, illegal cultivation, criminal activity and money management. For example, one of the bullet points lists “preventing proceeds from the sale of marijuana from going to criminal businesses, gangs and cartels” as one of the Justice Department’s goals. This seems like an easy task. But how well do you know the counterparties to your transaction? Although they might have a license, it claims that if they are involved in backdoor activities and are discovered, the company’s records will list your company. At least you will be questioned. In the worst case, you have to hire lawyers to help you file a claim.

Public relations in the cannabis sector

Unlike the initial efforts of many young businesses, effective PR requires a broad and deep effort that is equal parts proactive and reactive. According to Josh Weiss, President and CEO of Scottsdale-based 10 to 1 Public Relations, mature organizations are aware of this. They focus on “building a strong and enduring reputation that inspires enthusiasm and inspires trust, but also weathers the storm.” These PR principles apply to all industries, and the cannabis sector is no exception. You want to control more than just the distribution of your items; that goes far beyond Marcom.

Even well-established, stable companies with well-known product lines still experience little stigma in terms of consumer acceptance. And while marijuana can add a little more complexity to PR best practices, the principles are still the same. Weiss advises companies to remember the basics. This includes sharing short, uplifting stories [such as case studies of community involvement in your area]fixed updates [such as new products or hiring], participation in community programs and chambers of commerce, etc. These core principles will gradually increase your confidence among reporters and viewers. Buyers (whether B2B or B2C) want products and services with a solid reputation for quality, cost-effectiveness, and an increasing commitment to triple-bottom-line goals.

According to Weiss, “Mature PR is aware and ready to help you respond to crises (ie, take ownership and focus on what you’re doing right) and proactively prepare for crises they’re not just yours Were interested but build equity early before you need it and creating a contingency plan is vital.

Marketing and brand communication

On the surface, it might seem easy to come up with marketing communications that relate to your target audience – well-targeted messaging, hot sales pitches, appealing imagery, appropriate packaging, etc. However, (even a good) appearance can be misleading, as any professional in the field would testify. Young companies often wave their marketing initiatives and focus on these common articulations while ignoring what should be the fundamental element – ​​the brand, especially in new and emerging sectors.

Thomas Blanck, owner of TMB Partners, a strategic marketing firm with offices in Michigan and Arizona, says, “These tenants can only come through planning and strategizing.” She said they shouldn’t be based on guesswork, instinct, or individual aesthetic preferences.

A brand should be designed with a strategic position (see your mission/vision) and a knowledge of your journey and where you want to be one, five or even ten years later. The brand serves as the center from which marketing activities are to emerge.

Blanck firmly believes there is a huge and unexplored market for older consumers on the B2C side of the cannabis industry. He notes that while more established companies are beginning to understand this, some younger ones are just focusing on looking “young and trendy”. Blanck believes these attributes, along with creating a brand that can speak to the full spectrum of your target market, are sometimes underestimated. There are many people in this game who are in their 60s, he warns. Sophisticated brands and their marketers will target this market. The simple will not even notice.

There you have it!

Advice for adults to help you navigate the murky waters currently in the cannabis industry.

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