Find the Right Balance…
Heather Manus, RN
Medical director, Sacred Garden of Santa Fe; president, Genesis International Cannabis Solutions
When transitioning from a traditional career into the cannabis industry, it’s important to understand that you must cover your back at every turn. Remember that safety nets do not yet exist in this industry. As a Registered Nurse, my instinct to care for others before myself was a flaw in my business plan when it came to financial issues.
Kindness and compassion will always be character strengths, but must be balanced with a sensible business plan, financial structure and contracts.
A healthy balance of passion, curiosity, and business sense is vital for success in this emerging and rapidly growing industry. Recognize when you are providing more than you are receiving and evaluate your reasoning.
Be extremely careful about the people you choose to partner with; it could mean the difference between getting your big break, and breaking you in a big way.
Hire for Cultural Fit…
Derek A. Peterson
CEO/President, Terra Tech
Entrepreneurs in the cannabis industry face unique hurdles from other businesses. We must navigate political issues, weigh the risks of federal legality, and manage complex taxation, to name a few. In order to thrive, a cannabis business requires a team of specialists to operate it smoothly and ensure its continued growth.
Early on in my career in this industry, I thought a sound plan was to identify the top people in each respective field and amalgamate that group in order to achieve our goals. What sounded good in theory, failed in application.
Through experience I have found it is far more important to hire a team that integrates well. A single weak link can cause the entire system to collapse. Today when we add someone to the team, we first make certain that they function well within our culture and consider secondarily how their resume stacks up.
Take Active Role in Legalization…
R. Michael Smullen
Executive chairman and co-founder, AltMed
The failure of Amendment 2 in Florida (which would have legalized medical marijuana) forced the executive team at AltMed to step back and re-evaluate our business plan.
We knew that before we could determine our next steps, it was critical to evaluate our efforts to date and determine, what, if anything, we might have done differently.
The biggest lesson learned for AltMed is that we should have been more aggressive in helping to shape the narrative for the Vote Yes campaign.
One of the major reasons for the Amendment 2 shortfall was that the other side ran a strong campaign with a barrage of TV ads that were highly deceptive and filled with fear mongering. Very little was done in the last few weeks to counter those claims.
With our deep experience in healthcare sales and marketing, we could have taken a stronger position with United for Care in helping to shape the campaign, more than just making a financial contribution.
AltMed did participate in several debates, talks and interviews with several local TV news stations and newspapers, but these did not have the reach necessary to impact the other areas of the state.
Don’t Underestimate Your Financial Needs…
Owner, Pure Green
Make certain that you request and secure enough money from your investors to execute your business plan. This may seem obvious, but it can be tricky.
We initially asked our investor for about $100,000 less than we ultimately needed. We had a business plan, but after we got the initial yes, we revisited the numbers and realized we were at least $50,000 short.
We had to go back and essentially re-pitch the investor. After we got rolling, we realized we needed an additional $50,000. We were able to return to the well once more, but not everyone will have that option. To avoid the same mistake:
- Make sure you have a business plan with projected expenditures for getting started, as well for monthly operating costs.
- Include a sum for unanticipated contingencies in your plan. I recommend taking your total start-up budget and adding an additional 30%.
- Make sure you have a plan to cover your operating expenses for a sufficient interval going forward. Start with at least six months operating expenses in the bank.
Funding a new business can be complicated, but with enough foresight and planning you can assure that you are financially prepared for whatever challenges arise.
Brace for Unique Challenges…
CEO and co-founder, Cannabase
If you’re exploring starting a cannabis business, remember that every opportunity comes with a price tag, and the cost of cannabis is steep (and not just for recreational users!).
If you choose to take the plunge, be prepared to have both your problems and opportunities limited by cannabis’ federally illegal status. Access to banking, restrictions on out-of-state investments, and the lingering social taboos will play a large role in shaping your decisions throughout your company’s growth.
Today, marijuana is still a small town where powerful partnerships are being formed and businesses are popping up in untapped spaces. If I had to do it all over again, I would give up the sleep, freedom, and sanity to build Cannabase all over again … but I would appreciate my final days with a bank account a little bit more.