Unlocking Cannabis Potential: Discovering Growth Opportunities

There are many ways to grow in the cannabis industry. Growth can mean different things to different people, depending on your job and skillsets. A general manager may see growth in individual employees while a CFO is focused on the bottom line. Growth in marketing is not measured in the same way as growth in sales.

First, identify the areas where you would most like to see your business grow. Define what successful growth looks like to you.

Not sure where to start? Try these ideas:

• Product Innovation. Developing new product lines or new products within existing product lines is a time-honored way for a consumer-facing brand to grow. Existing products can be improved with new features or benefits that better fit customer wants. Not sure what your customers want? It never hurts to ask them.
• Market Expansion. Over half of Americans live where cannabis is legal. Market expansion may mean entering new states with existing products, or it can mean targeting new customer segments. Canna-curious consumers are an area of massive growth for cannabis sales, but the trick is getting them to come back and ask for your product by name.
• Vertical Integration. If you want to scale quickly, partnering with other businesses or acquiring them can help you do so without building a new business from the ground up.
• Technology Advancements. Growth can also look like savings — saving time, saving labor, or saving money by leveraging new technologies to improve efficiencies in your business.

In the cannabis industry, growth must be measured in more than profit and market share. The legality of cannabis was hard fought and won, and businesses in this space today have a responsibility to identify and act on growth opportunities that benefit the community and the industry as a whole.

Community Engagement and Social Impact

The effects of the War on Drugs are far-reaching but unevenly spread. Cannabis was demonized and used to target Black and Latino communities, where the economic impact is still felt. Now that cannabis is legal, it is vital that businesses get involved in your local community, to help shift public perception and spread the positive impact of legalization.

Growing your business can also mean growing your community impact – perhaps you’re able to scale your sponsorship of a fundraiser for a local non-profit, increase donations to mutual aid, or give all of your employees a raise.

Ayr Wellness, a multi-state cannabis company, has a unique approach to community engagement. In each community the company is in, they create hyperlocal partnerships with organizations like food banks to give back to the community. They also host expungement clinics, national days of giving, and provide professional development for cannabis entrepreneurs from minority communities.

Advocacy and Policy Change

Cannabis regulations are subject to change at the local, state, and federal levels, sometimes for the better, sometimes not. As a business owner in this industry, you have the power to advocate for change.

The lasting stigma of cannabis is such that many politicians don’t fully understand the cannabis plant or its benefits, and may be making decisions from a place of misunderstanding. Cannabis business owners have both economic impact information and a better understanding of the plant to help policy makers create regulations that are in the best interest of consumer safety and market growth.

Brand Reputation

Your reputation is valuable in a way money can’t buy. In this fledgling industry, trust is a vital currency for continuing to grow the cannabis industry. Concerns about consumption abound, both with cannabis critics who don’t want the plant in their neighborhood, and regular consumers who have valid concerns about lab testing results.

There is no shortcut to a good reputation: you earn it by telling your customers (and your employees and your stakeholders) what you’re going to do, and then doing it well — again and again and again. A reputation for never taking shortcuts, prioritizing consumer safety and creating good products is a solid foundation for any business to build off of.

Employee Satisfaction

As mentioned above, customer satisfaction is not the only measure of success or area for growth — employee satisfaction is important to a long-lasting business as well. The most profitable businesses have happy employees who feel valued and supported. The right team of people can have a powerful impact together, but only when they work well together as a team.

One of the most important areas for growth for cannabis leaders to focus on is their employees. Is there internal mobility for your team? Do employees feel they can bring ideas and concerns to leadership? Are you recognizing your team as individuals and not just employees? It is far more cost-effective for a business to retain top talent than it is to replace it.

A rising tide lifts all boats — and this is as true in the cannabis industry as it is anywhere else.

Entering into strategic partnerships with mutually beneficial outcomes can strengthen your business by helping go farther, faster than you would have alone.

Collaborating in the cannabis industry is not a new idea, but it is one that requires forethought, communication, and trust. These partnerships should have clear, mutually beneficial goals that help you and the other business, or businesses, grow faster together.

The more you grow your business, the more risk you have to manage. This is the other side of success: growth brings with it increased exposures. But this is no cause to shy away from success. With proper planning, regular business audits, and comprehensive insurance coverage, your risk is managable.

Risk Assessment

Every business needs a risk management plan. This living document identifies, analyses, and hold a plan for every exposure facing your business. It may sound overwhelming to create, but we’ve put together a simple 5-step plan to help you create a comprehensive risk management plan. This document should be reviewed regularly (bi-annually or annually) to enure that as your business grows, so too do your risk management strategies.

Regulatory Compliance

The regulations that govern the cannabis industry are complex and subject to change. Managing your risk means ensuring your business is in compliance with these complex rules and prioritizing ongoing compliance. A regular review of your state’s regulations can be beneficial to understanding any changes coming down the line. If compliance isn’t your strong suit, this is a great place to collaborate with an expert or another business that specializes in compliance.

Financial Management

Consistent profitability is a tricky business in the cannabis industry. Businesses building for longevity need to plan for ebbs and flows in income, and develop strong financial planning nad budgeting strategies to help get through any droughts. Managing your cash flow well is key for profitability in an industry that fluctuates like cannabis does.

Operational Efficiency

Growth can also mean finding areas to save. Conducting regular business audits can help you identify areas of operational inefficiency where you can systemize to save time, money, and energy. This can look like reducing redundancies or implementing new technologies.

Identifying cannabis growth opportunities is an important piece of building a business with long-term success. Every company must evolve with the demands of its audience, but in cannabis, companies are at the forefront of this growth, educating consumers and influencing policy change. As your cannabis company grows, so too must the protection of your investment and bottom line.

Protecting your cannabis company can seem confusing; however, we’re a full-service insurance brokerage working with carriers worldwide to offer you the best coverage possible. We’re here to help! Please reach out to us today by email [email protected] or calling 646-854-1093 for a customized letter or learning more about your cannabis insurance options.