Are you interested in starting a business in the Marijuana industry? The cannabidiol market has the potential to make you profits as it continues to grow. Despite a few hurdles, such as the assortment of laws and the pandemic gripping the industry, the market has generally seen growth.
Statistics project the industry to grow at an annual rate of 22.2%. In spite of the fast growth, it is not always a smooth sail for first-time investors. To help you launch a marijuana startup company, here are a few helpful tips:
1. Study Your Market:
Like all businesses, success in the CBD industry will depend on your market research. As an entrepreneur, find the problems, the gaps and try to resolve and fill them. The reason for this is to find your niche because not all businesses need to be product-oriented.
For example, some businesses have entered the CBD industry by developing better packaging or machinery. Others have created software that enables cannabis businesses to track seed-to-sale easily.
2. Understand the Laws and Regulations:
For many years marijuana has been illegal in the US and several other countries. That’s because of its mind-altering effect when used for recreational purposes. However, with the introduction of the Farm Bill of 2018, CBD products have since gained ground here in the US.
The products have also gained popularity dues to their said qualities, such as the alleviation of depression and anxiety. Also, some states still deem it illegal to consume or sell CBD, let alone marijuana. Some prohibit the shipping of cannabis and related products to customers in certain areas. Some of the states that have legalized marijuana include:
That said, if you are looking to start a business, keep in mind that more than 0.3% of THC in CBD products is not permitted. Furthermore, platforms such as Facebook, Instagram, and YouTube prohibit the promotion of marijuana products. So when starting a business, it’s imperative that you comply with each state’s laws and do not make unfounded assumptions.
3. Understand That Not All Suppliers Are the Same:
To start your own cannabis business, you first have to know where you will source the products you want to sell. Remember, not all cannabis suppliers are the same, and the product may vary. Unless you plan on home-growing your own marijuana, you will have to choose a supplier that delivers according to your customer’s needs.
Suppliers can deliver different products based on agriculture practices – non-organic or organic farming. For your startup to succeed in the cannabis industry, you will have to major in one niche. Sourcing or growing products with customer’s preferences in mind will help your business stand out, increase revenue and attract more customers.
4. Understand the Difference Between Brick and Mortar Shop VS. Online Stores:
In this digital era, digitization is quickly taking over most areas of life, including business. As a startup, both brick-and-mortar shops and online shops can be viable options. However, before you invest your money, explore the pros and cons of both business models. Depending on variables, such as location and target customers, one of the models can be more suitable for your business.
Furthermore, even if you choose to have a physical shop, you will still need a business website. If you opt to run an online shop, you will save on rent. Keep in mind the modern consumer has more preference for online shopping than traditional shops.
5. Promote Your Business:
In the world of business, marketing tops the list of must-do things. Not because everyone does it, but because it’s the only way you will succeed. Promoting your business is the only way to influence customers to extend your reach, cut through the noise, and make sales.
First, you’ll have to carefully assess your target market, your goals and do some research on completion. That way, you can then identify the appropriate marketing methods. There are many marketing strategies that you can implement to boost your business, like paid influencers, festivals, and SEO.
Some marketing avenues deliver results faster than others. For example, online content marketing can give you a long-term boost, while local ads will offer instant results.
Despite the difficulties facing the industry, the future outlook for the CBD market does not look bleak. Only entrepreneurs with in-depth industry knowledge and versatility will succeed as the market grows. Also, ensure that you do the right thing to avoid embroidering your business in FDA warnings and lawsuits.