Investing in your Medical Cannabis brand
Let’s get one thing straight, off the bat: Legalized Marijuana is here to stay. If it’s not in your state now, you’re in the minority. There’s too much money and too much opportunity, and those not taking advantage of it now will be too late. With money and opportunity comes competition. In the legal weed market, competition is fierce.
Just ask one of the some 1,900 applications who were denied medical marijuana business licenses in the State of Missouri. Or perhaps one of the 800 who are appealing their loss, after already losing tens of thousands of dollars in application fees and in many cases, outside consultancy fees as well. It’s hard out here for the budding weed entrepreneur. Pun intended.
An interesting note, and one I’ve found most people outside of the industry aren’t aware of, is that all of the marijuana bought and sold by these businesses in your individual states must be sourced in your state. Due to marijuana still being ruled as a Schedule 1 drug by Uncle Sam means if you transport marijauna across state lines, it's a federal crime.
So for the time being, mid-level brands have been able to be built somewhat in silos. California brands largely remain California brands, Colorado brands are Colorado brands. Some very large and early adopters use new manufacturing partnerships to branch out and expand their product lines into new states, but generally at great cost and a lack of executional and quality control that one might have from a central manufacturing facility and consistent supply chain. Well known dispensary brands cross into new states, taking advantage early of the laws and regulations, but still have to jump through many, many hoops and at great investment.
Where does this leave the emergent weed entrepreneur? One would think with endless possibility. And this is perhaps the case. However, I would pose this question: What happens when marijuana becomes federally legal and brands are able to enter new markets with vastly slimmed down regulation. My call: the little guys are gonna get smoked. A tale of business as old as time.
When the walls come down, and the playing fields are leveled - and they will be soon enough - large, heavily funded and in some cases near decade old cannabis companies will come into your state. They will have seemingly unending reserves of marketing dollars. They will have brand awareness. They will have fantastic product, beautiful packaging, and have a story to tell with it.
They will know their target market. They will have previously defined who they are, and how they are going to speak to their consumers. They will have e-commerce platforms developed, customized to harness customer data and perform suggested selling.
They will have supply chain synergies. They will have sales teams. They will have retail and online promotions. They’ll send you an email for your birthday and offer 10% off your favorite edibles.
They will have a plan. Then they will execute it.
If new marjuana entrepreneurs want to compete in the long term, they must invest in their brands early and often. New weed businesses have the great blessing of being able to build brands with a narrowed state-wide focus and must take advantage of being able to build customer loyalty, with focused marketing dollars, and competition that more or less starts on even ground and at the same state-wide starting line. What a rare opportunity.
I urge you, new weed startup, to define your target market. Define your voice. Define how you’re going to speak to your customers - and more importantly - how you aren’t. Invest in your graphics packages, in your merchandising, in your building and in your packaging. Invest in your sales processes. Invest in your outbound marketing and customer retention programs.
Invest in communication with your consumers at such a high level that when the big boys are finally allowed to come into your state and play, you’ve already built your loyal following, and you can play the game with them.
Invest in making a plan for your brand. Then execute it.
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