The cannabis market is very lucrative. The cannabidiol market, which is just a fraction of the entire market, is expected to grow at an annual rate of 22.2%. While starting a cannabis business in 2021 is a good idea, many people find themselves lost in the abundance of guides and information available online. To help you launch your cannabis startup, we’ve put together a list of five things you need to know before starting your business.
There are Plenty of Cannabis Business Ideas
When starting a business, you should have an idea of your business model. It’s essential to choose one business idea because it provides you with a frame of reference. It will narrow down your research regarding legislation, target market, best practices, and the most optimal business model.
We have some good news for you. The cannabis market is very diverse. Whether you want to focus on budget buds or premium CBD oils, there’s a market for you. The market is so diverse at this point that every cannabis business idea is viable. For instance, you can enter numerous affiliate programs, run a CBD podcast and blog, and profit from selling products via affiliate links.
The bottom line is—explore various business ideas, research the ones that you find personally engaging, and, finally, choose one.
Legal Side of Starting and Running a Cannabis Business
The only downside of starting and running a cannabis business is the legal framework. Why? The answer to these two questions: “Is it legal to sell cannabis and related products?” and “Is it legal to ship CBD products to customers in a specific area?” is the same—it depends on the location.
The legislation landscape is still changing. To be on the safer side, gather as much information as you can. For instance, in the US, some states still prohibit the consumption and sale of CBD, let alone cannabis.
If you decide to run an online store, it’s imperative to comply with each state’s and country’s laws (when shipping internationally). Otherwise, you risk paying penalties that might force you to close your business.
Not All Suppliers Are the Same
Unless you plan to grow your hemp or marijuana, you will have to source products you want to sell through your cannabis business. You need to know that not all suppliers are the same.
They can be divided into particular groups based on testing and agricultural practices—organic vs. non-organic farms and businesses with in-house testing labs vs. companies that use independent third-party labs.
Why is this important? To succeed in the cannabis market, you will have to target one niche. Sourcing suppliers with your target customers’ needs in mind will help you stand out from the crowd, attract more customers, and increase your revenue.
Online vs. Brick and Mortar Shop
The world is under the digitization process, which has engulfed businesses as well. Both online shops and brick and mortar shop-based businesses are viable options. However, you should explore the pros and cons of shop models. One may be more suitable for your business model and target customers than the other.
In any case, even if you choose to run a physical shop exclusively, you should consider getting the business website up. The majority of the businesses in this niche opt for online shops for apparent benefits. You’ll be able to save extra for not having to pay for rent. Online shopping is far more convenient for modern consumers than its traditional counterpart.
Additionally, if you opt to run an online shop, you will develop a comprehensive marketing strategy, improve your website traffic, and generate more sales. How do you make the right decision? Consider what your competition is doing. Identify the main competitors in your target market and determine whether they sell products via an online store, physical store, or both.
Marketing Can Make or Break Your Business
Marketing is one of those must-do things in the business world. Why? Because everyone else is doing it. Without it, you won’t be able to cut through the noise, extend your reach, influence customers, and capture sales. After all, 59% of the global population is active online, making online marketing even more important.
You’ll need to assess your business goals, target market carefully, and research competition to identify the appropriate online marketing methods. Some strategies deliver results faster than others. For instance, SEO and content marketing are long term efforts, while paid search engine and social media ads provide instant results.
Hopefully, the tips mentioned above will help you make the right decisions and start a cannabis business in 2021 successfully.
Have any more tips for launching a launching a cannabis startup? Let us know down in the comments.
This article originally published on GREY Journal.