Dig in now or risk being swept away by the coming corporate tsunami.
5 min read
Opinions expressed by Green Entrepreneur contributors are their own.
As cannabis businesses in California and beyond transition to the regulated market, we are seeing the canna-pocalypse of our favorite farms, products, and brands across the industry. The astronomical cost of licensing and compliance, combined with the lack of access to banking and traditional financial services afforded to other small businesses, make financing for growth one of the hardest and most limiting pieces to the puzzle. Hard-working entrepreneurs are also closing down for a multitude of other reasons, including waiting on permits and licenses to ever-changing rules and compliance, and at this stage it’s easy to run out of both time and money.
As the “OGs” know all too well, these hurdles are just too high for the many amazing jewels of craft cultivators, innovative medicinal brands, and budding entrepreneurs. Instead, the shelves are becoming awash with well-financed, in-house brands dreamt up in corporate design rooms, plainly capitalizing on the holes created by the pioneers.
Related: Pulling the Cork Out of the Processing Bottleneck Slowing the Hemp/CBD Boom
Still, I firmly believe all is not lost if those who paved the way can come together as an industry and create the platform to persevere. Cannabis culture was created to heal people, to celebrate the plant and to help our families and communities thrive. This can continue if we can coalesce around four core principles:
Collaboration, not competition, is the key to our future.
As more big companies enter the space, and more financing flows into the cannabis industry, the competition for shelf space is only going to get fiercer. It’s impossible to think that any one small business can effectively take on the entire supply chain. This is where the power of partnerships will allow healthy competition on all levels. A key piece of business advice, regardless of your industry, is to ask yourself, “Where do I need help?” and subsequently to also ask, “Where can I be of help to others?”
Collaboration can be demonstrated in a variety of ways, such as sharing information on becoming compliant, facilitating introductions to investors, or offering support in a time of crisis. It can also be done in the form of strategic partnerships such as sharing resources through independent contractor or co-employment agreements for brand ambassadors, manufacturing agreements to leverage complementary strengths, or potential cross-promotional opportunities at retailers or in media.
Collaboration is a powerful tool, which can propel us collectively through difficult times through a community of support.
Related: 5 Ways CEOs Can Empower Teams to Develop Collaborative Workplaces
Authenticity is our best asset.
For those of us who have been paving the way in legal cannabis, going back to the early medical marijuana era, the main difference we bring to the table is authenticity. We took many risks to build our businesses because of our belief in the benefits of this plant for our customers. Brand incubators cannot easily “cook-up” the authenticity that has been the core of our small business since inception. Authenticity establishes trust and connection — key components of brand loyalty that help brands build long-term relationships with customers.
We know why craftsmanship is key to a good product but as more products hit the shelves, all at different price points, consumers are likely to become more confused. They may always reach for the lowest priced option, not knowing that the higher priced items are likely more responsibly sourced, and expertly crafted by artisans with a passion and purpose beyond just making money. So state your mission up front. Be clear about your product rationale and the thought that goes into everything you do. Did you start your company based on your own experience? Share this with your customers.
Related: The World-Changing Power of Sharing Your Story
Educate the consumer on both the product, and the power of their voice.
As most in the industry are aware right now, consumer education is desperately needed. While all cannabis businesses are doing this in some capacity, those of us who have lived and breathed this industry since the beginning have a unique perspective to help consumers learn all they need to know about the plant. We can teach the importance of knowing your farmer, your source and the process by which your chosen product was made.
We in the cannabis business can help consumers understand their power to support the artisans and stories that resonate with their heart — not just their pocket book. Educate your consumers on the power of their voice.
Related: These 6 Coffee Marketing Tricks Are a Perfect Blend for Your Cannabis Brand
Diversify not just to survive but to thrive.
It’s important for our cannabis industry to resemble the communities we call home. According to the SBA, small businesses are owned by a diverse group of individuals, from immigrants to multi-generational families, men and women and eight million minorities. Consumers and businesses alike should support under-represented founders and encourage diversity across all channels that include women, LGBTQ community, veterans and people of color. It’s simple: if you’re a consumer, consider brands founded by women. If you’re a distributor, ensure you have an LGBTQ program. If you’re a dispensary, ensure you’re giving veterans affordable options.
The day of reckoning nears, but by thinking ahead and acting thoughtfully — in consideration of others as much as ourselves — we can maintain the character and compassion that makes the cannabis community special. This will also offer the green entrepreneur the courage and chance to succeed, backed by and supportive of others in the community.
The time for us to come together has never been more urgent.