Getting Ready to Get Ready: Becoming a Cannabis Operator
Becoming a cannabis operator is no easy feat, and it’s an up and down journey to get there. When starting out for the first time, it’s important to understand what you’re stepping into and to map out the vision, the business plan, concepts, the team, the goals, the ideas and get everything on paper and see the big picture. Will it change? Yes, more than once but it is good to start somewhere and begin to build the knowledge in order to navigate what is ahead.
Here are some vital areas to consider when taking some of the first steps to learn more about all the different avenues to operate in a regulated market. This is just the getting ready to get ready work, and is the precursor to building the roadmap.
Research: The First Crucial Step
Launching a cannabis business requires diligent research. Whether it's deciding which state to launch in, determining the type of business to open, or understanding which cannabis operation license to pursue, research is indispensable. Consider visiting some regulated businesses or dispensaries in neighboring states, to understand different setups. With varying licenses and regulations across states, familiarity with these distinctions is critical for future operators.
Understanding Market Types
It’s essential to distinguish between existing mature markets such as Colorado or Michigan and new emerging markets like Alabama or New Jersey. Each market type presents unique opportunities and challenges. Mature markets might be saturated, but they offer existing infrastructure, while emerging markets provide fresh opportunities with more room for innovation.
Legal and Regulatory Framework
Navigating the legal landscape is paramount. Engage with cannabis-specialized attorneys who understand licensing and regulatory requirements. Early involvement with local and state authorities can help secure favorable outcomes regarding zoning and ordinances. Check state websites for critical information and make use of fact sheets and FAQs to build a comprehensive understanding of what's required.
Access to Funding and Capital Planning
A robust funding strategy is essential. Understand the costs involved at different phases, from application to operational readiness. If investors are part of your plan, transparency in financial planning is vital. Plan for contingencies and stress-test your funding strategy against common challenges like project delays and increased build-out costs.
Avoiding Common Pitfalls
Plan for challenges such as inventory shortages in new markets, licensing delays, and unexpected lawsuits that can stall operations. Be prepared for delays by building realistic timelines and having a financial buffer to accommodate changes. Thoroughly vet consultants, contractors, and software systems to ensure quality and reliability.
Exploring Licensing Options
Understanding the different licensing types—from merit-based to lottery systems and micro licenses—is crucial. Decide what fits your business plan best, whether it's a small boutique operation or a larger-scale venture. Each license type has distinct benefits and limitations, which you must weigh according to your business model and goals.
Seizing Opportunities in Mature Markets
Despite saturation, mature markets still hold potential, especially in areas that are opening up and accepting new cannabis businesses. Discerning investors might find value in distressed assets or towns newly receptive to cannabis operations. Fresh ideas and novel business strategies can indeed thrive in these environments.
The journey to becoming a cannabis operator is fraught with challenges, but with careful planning and informed strategies, it is also filled with opportunity. Whether you're considering entering a mature market or taking on the challenges of a new frontier, thorough preparation is your best ally. I encourage you to approach this venture with diligence and enthusiasm, as the cannabis industry continues to be a dynamic field offering significant possibilities for those ready to take the plunge.
ICS Consulting specializes in Compliance based services, such as Third-Party State Regulatory Audits, State and Local License Application Support, Technical Writing, Standard Operating Procedures Development, Worker Safety, QMS, OSHA Compliance, Metrc Seed-to-Sale Support, Compliance Operations Training, Employee Retention Solutions, and Employee Onboarding. For more information on how ICS Consulting Service can help your Cannabis Business, book a 30-minute discovery call and we'll help you map out your next steps to be successful in the Regulated Cannabis Industry.
