The Green Rush is definitely on in the US of A. Everyone sees it and is vying for their piece of the pie. Multitudes of people are moving across borders in order to get a foothold in the rapidly developing marijuana industry; people from all walks of life, with varied backgrounds and levels of business savvy. After attending the Cannabis Conference this November in Las Vegas, I felt like I had a glimpse of what it must have been like back in the gold rush of the previous century. There is a general feeling of urgency to get on board before the ship sails. Just as the gold rush brought out prospectors, who are in essence the equivalent of today’s growers and dispensaries, it also brought out a diverse mix of seemingly unconnected professionals such as lawyers, vendors, real estate specialists, consultants, and even a lone dry-goods manufacturer who made durable work attire – who subsequently built an empire called Levi Strauss & Co.!
The cannabis industry is no different, and just like at the outset of the California gold rush, it’s those who sell the picks and axes who make the money. So what are the ‘picks and axes’ of the cannabis industry? Vapes, extractors, container and packaging companies, lighting solutions, grow solutions and nutrient companies are exploding onto the scene at lightning speed, all scrambling to be big stakeholders in this Green Rush. There will be giants emerging with big claims in the industry, but the harsh reality is that many of these companies will not survive beyond the next few years.
Which brings me to the central point of this post – The public has heard of the amazing opportunities in cannabis and they want in… and they want in now. They understand that a limited investment of anywhere from 50-100K enables them to set up a lucrative dispensary or grow operation. It’s well known that dispensary owners in Oregon and Colorado can surpass the $1 million mark in monthly sales. With profit margins like those, it’s no wonder grow houses and dispensaries are sprouting like weeds (yes, pun intended).
I, however, have a few simple questions for these new, Green-Rushing businesses: Do you grow lettuce? Cherry tomatoes? Do you want to own a pharmacy? Or a liquor store? What do you know about growing a stable, high yield plant? Or about chemical extraction processes? How about selling consumer goods? What’s your background in retail?
What the Green Rushers need to understand is that this is a highly regulated market, with tough competition, and extremely complex state and federal legislation issues. Simply put, it takes a phenomenal amount of skill and experience to handle all of the hurdles that lay between a great opportunity and long term success. Drive is not an equal substitute for an under-educated and under-developed basic business sense. Don’t get me wrong, my intention is not to discourage budding entrepreneurs from rushing into the industry, the idea is to rush smart. If you answered “no” to any of the above questions, then ask yourself this next series of questions:
- What do I currently do?
- How can I apply what I currently do to this emerging market?
- What am I passionate about?
- Where can I make a difference?
Answer these questions honestly and you will be on your way to smarter business practices that will have a positive impact in the cannabis industry.