5 Tips for Choosing a Marijuana Business Consultant

Published November 5, 2013

Cannabis consulting has exploded in the past few years, giving entrepreneurs in need of business and operational help more options than ever.

But finding a quality consultant can be a challenge in its own right. As the marijuana industry has grown, it has attracted some under-qualified and questionable consultants eager to cash in on the green wave.

Some charge big bucks for relatively basic information, while others over-promise and under-deliver. A few are run by people who have run into legal issues or business challenges of their own in the past.

The pool of consultants is also extremely varied: It includes owners of both failed and successful marijuana businesses, professionals from other sectors that regularly do business with cannabis companies (real estate, law, horticulture) and even people who have taken week-long classes on various segments of the industry.

Many of these consultants do in fact provide valuable, reputable services. Even those that don’t have a ton of experience in cannabis can successfully apply their business knowledge to the marijuana industry.

But the spectrum of quality is wide.

“Consultants are a lot like growers – every one you meet says he’s the best in the industry,” said consultant Matt Cook, the former director of Colorado’s Department of Revenue Enforcement Group.

So how should businesses go about finding a consultant? Here are five tips:

#1. Ask to Speak with Previous Clients

Before signing a contract with a consultant, ask to see a list of previous clients and then ask about each relationship. It isn’t a bad idea to phone up a handful of clients, much like an employer checking on a potential employee’s references. This step might seem obvious, but many business owners fail to perform even the most basic due diligence, as they’re looking for someone to help as quickly as possible – or for the lowest price.

#2. Consider Niche Consultants Based on Your Specific Needs

The segmentation of the consultant business has put a premium on specific knowledge, and some of the more experienced consultants have chosen segments of the industry to target. A consultant marketing himself as a one-stop-shop for dispensary or cultivation consulting could lack important experience in more than a few areas. A legal consultant, for example, is likely a poor adviser on local marketing or cultivation techniques.

#3. Ensure You’ll Get Face Time

As new states come online with MMJ laws, consultants from existing markets look to them for new business. This is not a bad thing; consultants who have navigated laws in California and Colorado can also accomplish this elsewhere. But since the consultant/client relationship can have a tremendous impact on the overall health of business, it’s often best to side with a client who is able to meet in person.

This should not be a deal-breaker if you’re dealing with veteran consultants who are based in other states; many have opened satellite offices in states that have recently come online. But in general a consultant should be willing to invest face time with his clients.

“Do these new consultants know how to manage client relationships or embed themselves within a client’s existing team?” said Scott Hawkins of GRÜN Strategic LLC. “If they’re just dropping in, or glancing off, they’re not going to be particularly effective.”

#4. Think Twice Before Parting With Equity

A trend that is becoming more popular is for consultants to ask for partial ownership or equity in businesses they help. But be careful before signing on the dotted line with consultants asking for equity. For starters, having ownership stakes in multiple businesses within a finite market can create a conflict of interest for a consultant. Secondly, the ownership stakes could violate local laws on ownership. Finally, the traditional payment for services model keeps a consultant from tampering with areas of a business that he may not understand.

#5. Ask If They’re Doing Business With the Competition

In states that have just recently come online, often times the local government restricts the number of business licenses. In these markets, business owners should ask their consultant whether he has relationships with other licensed businesses – or with those that are seeking licenses in your city. Again, a consultant with relationships in a finite market can quickly develop conflicts of interest with these businesses. They can also spread themselves too thin.

By hooking up with a consultant that is not doing business with the competition, a business owner can prevent the unwanted distribution of proprietary information.

Image credit: Geralt via Pixabay

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43 comments on “5 Tips for Choosing a Marijuana Business Consultant”
  1. A person who actually works in MA on

    If you’re doing an article about who NOT to work with as a consultant in the MJ industry, Scott Hawkins was the perfect choice. Kudos, MMJBD.

    Reply
  2. WeedBiz on

    These are some really good points. We have potential customers call us for tips on finding a consultant and that’s not even a service we provide. Granted we know some great consultants but that’s not the point. There are a lot of people out there who really want to get in to this industry and there are a lot of well meaning people with great ideas getting taken.

    Reply
  3. Water Wellness Int. on

    I would like to get in contact with some consultants or anybody who is interested to use my product. I know it would be appreciated from grower and producer. Happy New Year and thanks.

    Reply
  4. NiMBUS Life on

    Hello; we are a company that specializes in the Cannabis Industry. This article is great. it points out key problems not just in the Cannabis Industry, but any industry in its infantile stages. If I may add; Any firm that provides consulting services should have not just a love, but a passion for the industry itself. The drive should not be profit driven alone. But a true desire to make a mark for all parties involved. The Cannabis Industry can do well for many. Business ethic should be first and foremost.

    Reply
  5. Kristin Retke on

    Experienced consultants with a background in any sort of regulation are so.e of the best options to chose for your business. They are used to dealing with many types of clients, keep a professional demeanor which in turn gets you a confidentiality agreement signed as a client would for any sort of consulting.

    Reply
  6. Phil Northcutt on

    You could always attend a conference that brings together different consultants and listen to them speak, meet with them and talk to their former clients. Former clients love to talk about their experiences. Definitely do your homework, because if you pick the wrong guy, you’re not getting any of that money back.

    Reply
  7. Frank Best on

    I have just retired from Medicine man as director or operations and would love to get back in the game. Please feel free to contact me for any way I can help.5 years xp from start up

    Reply
  10. Stephen on

    This article brought up a lot of good points, however the industry is much more involved. I have seen it all, good and bad. There’s a lot of misinformation in the industry. Most facilities and consultants rely off of feeding charts and product pushers and lack the understanding of soil health and ecology.

    I have been working professionally in the field for years. Started in California with medical grows, even opening several dispensaries. Recently I’ve been doing consulting work in the Pacific Northwest, Washington and currently in Oregon.

    I specialize in Probiotic NoTill Living-soil. My grows have always outperformed conventional cannabis in quality, potency and yields. Have farmed on every scale, from a 18 acre certified organic farm, to small medical grows. My recent clients have multi licence tier II and tier III, producers.

    Feel free to contact me with any questions or for more information.

    Reply
  12. Danny on

    Sir, as you are probably aware Oklahoma just passed the law for medical marijuana. I’m looking for advice on how to set up for 6 retail stores.

    Reply
  14. Jimmy on

    I am a brick and mortor business owner with internet marketing. Sales / service consultive communication skills come naturally. I am in the process of completing a more formal study of Cannabis/Hemp to solidify me as a viable candidate. All I can say is “Service first”

    Reply
  15. Mandy on

    We are building 10 greenhouse, each greenhouse has 25,000 SQFT. We are looking for consultants for our projects including cultivation, greenhouse building. Please contact me at 9094638778

    Reply
  18. WeedRAR on

    This is a great piece. We believe consultants can make or break a facility. Qualified experts don’t come cheap, have proven track records and set attainable goals.

    When hiring a consultant make sure you are hiring someone who specializes in what you are looking to accomplish. Many try to cover too much lacking experience or knowledge.

    In the end if the consultant performs his job and can improve a process by a few %, his fees can pay for itself many times over.

    Reply

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