Ahhh…the glamour, intrigue & fascination of being in the Cannabis Business! But rest assured, it is NOT for the feint of heart or the ill-prepared. And most assuredly not for the under-capitalized. And just when you think you might have it figured out, you will need to consider many options that will tug and push you in different directions. After completing its first year, HighBridge reflects on and shares with others looking to take the plunge, the options, pitfalls, challenges and rewards of entering the Cannabis arena. Certainly not all inclusive, but this list touches on preparation, capitalization, structure, networking & execution. Without any of these, your dream business could rapidly turn into a nightmare.
- Preparation. The Founder of HighBridge spent more than 2 years researching the industry. This extensive preparation helped define where HighBridge wanted to be, and what it would take to be successful. Medical marijuana, CBD, THC, Hemp. That decision is just the beginning! Then, within whichever sector you choose, growing, production, development, retail, etc. are daunting decisions, each with its own set of pros & cons, and risks & rewards. Know what you are getting into!
- Capitalization. Your venture will cost you more than you think and take you longer than expected! Without adequate capitalization you will not survive. And, by the way, if you are in the recreational cannabis sector, do not rely on conventional banking to help. This is much more difficult than you can imagine, with only a handful of banks in a few states “onboarding” a limited number of cannabis clients.
- Structure. Know what is required of your business. Sounds simple enough, but this will vary from state to state, each with esoteric licensing requirements, fees, compliance issues, etc. Try to predict your aspirations. If you are looking to run a local retail dispensary, your structural requirements will be vastly different than if you choose to pursue a vertically integrated company, or a Multi-State Organization. Lawyers and Accountants that specialize in dealing with cannabis companies area a MUST!
- Networking. Probably the most helpful tool in your arsenal. But it does not come easy. Most prominent, well established companies are skeptical of the “new guys” or God Forbid, “carpetbaggers”! Gain trust by showing your preparation and “staying power”. And always be respectful of those that have carved the path and made the early sacrifices that give us this opportunity.
- Execution. Planning and personnel are critical. Know where you are going, and have the people to help execute your business plan and model.