Marijuana Business Magazine

114 • Marijuana Business Magazine • November / December 2017 T housands of longtime medical marijuana business owners in California are about to undergo a major jolt as the state moves from a largely unregulated market to one governed by a new comprehensive regulatory framework. These businesses have operated for years in an unofficial gray market in which regulatory standards were lax or nonexistent in places such as Los Ange- les. Regulators were few and far between. And many MMJ company owners did not pay taxes or keep meticulous records of their business dealings. That’s set to change – and many busi- nesses are unlikely to survive the transition unless they take all the steps necessary to comply with the new regulatory regimen. “The attrition rate will be higher in California than in most states - you’ll get 70%-80% attrition,” said Avis Bulbulyan, CEO of Siva Enterprises, an L.A.- based marijuana consultancy. “Many of the operators have been operating with MMJ businesses hoping to survive the transition to a regulated market will need to focus on compliance and prepare to spend big bucks blinders on for the last decade and not really understanding what the rest of the country is going through.” The changes will affect growers, infused product makers and retailers differently. Below are tips and advice for how existing MMJ business owners can tackle the transition. TIPS FOR GROWERS Record-keeping will be indispen- sable in a regulated market. The war on drugs left its mark on California growers, who remain wary of federal crackdowns and for whom trans- parency represents risk, not compliance. But cultivators who want to survive will have to adapt to the new market reality. For growers, this means tracking and recording how many plants they are cultivating and the stage they’re in – seedling, vegetative or flowering. Growers also will have to keep tabs on how much they harvest and sell – and at what price. Cultivators also will have to record how they dispose of waste plant material. “This shift in culture is one of the most challenging and most important ones as well,” said Hezekiah Allen, executive director of the California Growers Association. Marketing will be important to build a brand. Because growers previously were underground, they couldn’t build brands, which help bring value to a company, Allen said. “Adding value is key to survival,” he added. “So the ability to build brands, that’s one of the real opportu- nities this transparency is bringing to the marketplace.” To build a brand, Allen advised, grow- ers can hire a brand consultant or attend workshops sponsored by industry organi- zations across the state, including his. C alifornia D reamin' by Omar Sacirbey to the JOLT SYSTEM