Starting an Cannabis Ancillary Business
People often ask me what it’s like working in a leadership position in the cannabis industry, one of the fastest growing industries in America.
Well, it’s a Gold Rush, or a Green Rush, and everyone is trying to make the most of it in the fastest way they can. One of the first things you learn in this type of business is that time feels compressed. In fact I would estimate that six months in the “real world” feels more like six weeks in the cannabis industry. The time between incubation and fruition of ideas is hyper compressed. As a leader I can make a decision in the morning that could lead to thousands more High There! users worldwide by the end of the day. So even in the ancillary marijuana businesses, leaders must assess situations at an accelerated rate and make decisions rapidly – changing direction as things fluctuate – taking care to do so quickly and avoid losing opportunity, market share, etc. There is a lot of swiftly calculated risk taking involved.
Another consideration a leader must have in this industry is the media. They are all around us. I have talked with PR leaders in non-cannabis companies who are shocked at how fast we get media attention in this space. But it’s a double edged sword. Every cannabis company in Denver (or anywhere in the US) is one news story from national and global recognition or widespread disapproval. When each and every business decision you make can make the news you must make sure that the uncertainties you take on are smart because the stakes are so high.
Take a few minutes and review my four point strategy for taking risk under pressure.
1. Set your goal – If you want to get to California from Colorado you aren’t going to get there by driving towards New York. Before I make any decision in business I always want to know what I’m playing for – what’s possible – where I want to go. That is my goal. All this means to me is knowing what direction I am heading. Too often companies take off on a journey or take a risk not knowing where they want to land. The result is an opportunity that can go up in smoke.
2. Create a roadmap – One of the most critical phases of High There! was when we designed the road map for our success. When would each build of our app be implemented? What was the timing of every media story and why? There is an illusion that successful businesses simply wing it and hope for the best. At High There! we do everything with what I call “Extreme Intention”. In other words, we make sure every post, email, tech build, improvement, hire, and meeting is implemented with intention. Your road map should include steps to success – and make sure you understand the “why” behind each step. You don’t want to randomly put forward an action without the thought needed to properly integrate it into the plan.
3. Know the obstacles – You will encounter potential disruptors which can be avoided if you know what to look for. But if you are running too fast without even a basic understanding of what hazards possibly await, when you inevitably meet an obstacle you could crush your momentum. So the question is how do I identify the critical obstacles that could wreck my entire decision? It only takes a few moments. Elevate your vantage point and take a look at your entire roadmap – then visualize the potential obstacles on that timeline. Spend time considering how you handle those obstacles should they arise and then systematically remove them in from your roadmap. Seeing the potential for obstacles and removing them BEFORE you begin. That way you can still move very fast and handle any unplanned scenarios with a bit more confidence and without losing any speed.
4. Execute – At some point you’ve just got to execute. One difference between our start up High There! and the countless others who never made it is that we really went for it. The last time I checked, no one gets out of this life alive so we might as well take chances. You have your goal, you’ve planned your roadmap and removed or are aware of the obstacles ahead and now you just need to get going. In launching High There! we could have spent another few months shining up the details and tinkering until we couldn’t anymore. Instead we made a decision that the app was really good and that we needed to share it now. We had a roadmap, we knew there were risks. We could see the obstacles and I felt we were all clear about the objectives. So we launched, breaking the story with just a few strategically chosen media outlets. The result was High There! has grown exponentially, with over 80,000 total downloads in just a few months. And we are just getting started.
Ancillary Cannabis Companies
Ancillary companies also produce big profits in the Marijuana Industry. With 40% of companies that provide service to Marijuana customer have said to have reported high profitability. These companies usually sell,
- Accessories & marijuana paraphernalia
- Growth products
- Vaporizers and bongs
Although a lot of ancillary companies have been successful in their Cannabis business venture, it is reported that 26 percent of these companies are losing some or a lot of money.
Those companies that are struggling are usually startup companies that have not gained their footing yet. Companies that have already stamped their name in the Cannabiz industry are doing pretty well and is estimated to do much more in the future.
Companies that have been with the industry for a few years now and have already penetrated the market will most likely succeed and yield the most profits in 2016.