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The Challenges of Growing a Cannabis Business

Starting a cannabis business is a worthwhile and rewarding project for any entrepreneur. After all, the industry is growing rapidly with reports estimating the legal marijuana market will be worth $66.3 Billion within the next five years. However, while it can be greatly profitable, there are also various challenges of growing a cannabis business you’ll […]

The Challenges of Growing a Cannabis Business

Starting a cannabis business is a worthwhile and rewarding project for any entrepreneur. After all, the industry is growing rapidly with reports estimating the legal marijuana market will be worth $66.3 Billion within the next five years. However, while it can be greatly profitable, there are also various challenges of growing a cannabis business you’ll need to face.

When you run a cannabis business, you’ll face all of the usual obstacles and difficulties that regular business owners face. However, on top of that, the legal cannabis industry also comes with some unique challenges, especially as it’s a relatively new industry with many laws and regulations and a constantly changing landscape. Here are some of the common challenges of growing a cannabis business and how you can overcome them.

Dealing With Cannabis Laws

One of the most obvious and prominent challenges of growing a cannabis business is the legal aspects that come with it. Every upcoming business has to deal with a range of business laws, but running a business in the cannabis industry can be even more complex, especially with regulations and laws being different from place to place.

Marijuana is still federally illegal in the United States, although many states have now legalized marijuana either for medical or personal use. As such, choosing the right location for your business can help prevent a lot of legal hassles. Even in states where marijuana is legal, you’ll still have to deal with licensing processes that are often long and complex.

Starting a cannabis business can be particularly difficult due to the legal hurdles that come with it. For example, you won’t be able to get a regular business loan from a bank for a marijuana business due to the conflicting cannabis laws in the United States. Advertising can also be tricky with various restrictions on what you can and can’t do.

As with any business, it’s crucial to get a lawyer that understands the unique legal challenges of your business. They’ll help you operate smoothly so you don’t lose your funds to legal problems.

Dealing With Cannabis Laws

Getting Funding For Your Cannabis Business

Another one of the challenges of growing a cannabis business is getting funding. Since cannabis is still illegal in many parts of the United States, most banks won’t give you a business loan for a cannabis business. Getting funding in traditional ways can be difficult, but you still have various options.

Although you won’t get funding from a bank, you can seek individual investors for your cannabis business. Since it’s such a rapidly-growing industry, there are now tons of interested investors looking for an opportunity to invest. Going to cannabis-based networking events or joining networking groups can help.

You could also look for cannabis business incubators. These are organizations that invest in businesses and give them the resources needed to grow. However, you’ll likely have to hand over a large chunk of your business in return. 

Crowdfunding is becoming another popular option. You can keep control of your business and gain obligation-free investments from interested consumers. You can even use cannabis-based crowdfunding platforms like CannaFundr and Fundanna.

Standing Out Ahead Of Your Competitors

With such a fast-growing industry, one of the main challenges you’ll have to face is standing out ahead of your competitors. Although legal cannabis is still a relatively new industry, there are already many cannabis companies currently catering to consumers that you’ll have to strive to compete with.

It’s important to offer something unique to your competitors. If you’re running a cannabis store but offer nothing that sets you apart from your competitors, then customers are likely to go elsewhere. You might want to offer cheaper prices, unique products or something that makes your customer experience more desirable.

You should also work on building a strong brand identity as soon as you start operating. This involves many things such as establishing a reputation as a top cannabis brand to offering custom-branded products to improve brand recognition. The more you promote your brand and become known to potential consumers, the more success you’ll have.

Giving Consumers What They Want

Giving Consumers What They Want

When cannabis was hard to get your hands on, buyers would settle for pretty much everything. However, there’s now a booming legal cannabis industry that offers all kinds of new options to consumers. It’s important to learn exactly what consumers want and how to give it to them.

Offering a wide range of products is a good place to start. Offering plenty of strains of weed is a must, but many customers now look for alternative options such as Cannabis Oils, Concentrates, and Topicals. You should also offer CBD products as these have become a popular alternative for users who don’t want to get high.

Impressing customers also goes beyond the products you offer. You should provide the best experience possible for customers however you can. For example, some dispensaries now offer delivery or online orders to make things even more convenient for customers. The best approach is to collect feedback from customers and find out exactly what they want.

Marketing Your Cannabis Business

Marketing your cannabis business can also be tricky. Much like getting funding, there are unique boundaries that come with marketing a cannabis business. Depending on where you’re operating, you may be restricted from using certain forms of advertising and promotion. However, that doesn’t mean you can’t market your business successfully.

Cannabis businesses often rely on digital marketing methods to make their brand known. Utilizing social media helps you connect with current customers and reach out to new ones. Building a solid business website and using SEO to get hits can also have a significant impact on your success.

While you won’t be able to take out billboards or television ads, you can still make your brand known to your target market. Try using cannabis-based networking websites, attending cannabis events, and even using promotional products to build your brand name and recognition.

Conclusion

Growing a successful cannabis business comes with some unique challenges, but that doesn’t mean you should avoid it. There are many ways to overcome these boundaries and, with the cannabis industry set to grow massively over the next few years, it’s worth taking on the challenge.