Running any business can be quite demanding, but running a cannabis business presents its own set of challenges. Until federal legalization comes into play, company owners are stuck adhering to different state guidelines, zoning restrictions, and shipping difficulties, just to name a few — which can make it extremely difficult to thrive in the industry.
Leaf Retailer spoke with a variety of different cannabis professionals about their success so that you can achieve the same accomplishments with your business. Here are their secrets for success:
- Know the Market
- Marketing Tips
- What to Do When Opening a Cannabis Dispensary
- Be Competitive
- Utilize The Most Popular Social Media Platform
Before Getting Started: Know the Market
Logan Goolsby has 13 years of professional experience in the cannabis industry and is currently an adjunct professor at the Community College of Denver. He teaches a special Cannabis Program at the college for entrepreneurs looking to get started in the industry, and the tip he always shares with students is that you should not only be disciplined and learn about the history and supply chain of cannabis, but you also need to read and learn compliance laws, as well as understand math and science to be able to measure terpenes and understand the testing results.
“The biggest secret of the cannabis industry is to learn more than just cannabis to really bring everything together. We study supply chains, growth cycles, transportation, different seeds and cell programs, and then we also study manufacturing, as well as the retail sales portion,” Goolsby said.
Goolsby’s Secret for Success:
“The first thing you need to focus on is the market demand. Most states publish research and an average market rate or market value, and those documents are available publicly — they tend to be the numbers that taxes are based off of. The second thing is to keep aware of the changing regulations.”
Social Media Marketing Tips
Eric Meth is the Chief Revenue Officer at Surfside, and he has extensive experience in personalized marketing for the cannabis industry. He suggests that all cannabis brands have some type of social media presence, and to focus on content and education rather than promoting your products.
“The general rule of thumb is that you can get booted off just as quickly as you enter those channels, which is true, but I have heard some very bad marketing strategies from cannabis brands,” Meth said. “They set up 12 accounts because 10 will probably get banned, but then you lose all of the followers across the 10 accounts that get clipped. Just be genuine, and present your content as education. There are brands aligning themselves with influencers who present more education rather than advertising.”
Meth’s Secret for Success:
“Understand that you need to portion some of your budget for marketing. There is a general notion that because it is cannabis, you do not need to market it since it is so popular, but the reality is this is such a crowded market and consumers are presented with thousands of different options. Consumers have a choice, and the brands that are successful do a really good job in creating that identity and connection with the shopper.”
What to Do When Opening a Cannabis Dispensary
Neha Chavan is the CEO and Founder at Oneness Technologies, an up-and-coming biopharmaceutical company offering cutting-edge medicine delivery systems to the consumer cannabis industry. Chavan has years of experience in the consumer cannabis industry prior to starting her company, and offers many different secrets for success for entrepreneurs looking to open their own dispensary:
1. Find a Target Audience
You need to be your own consumer. Immerse yourself into the world of the cannabis consumer, find their pain points, what they care about, and craft a brand that responds to their needs. There is incredible unmet demand in the space because many brands and large companies are not taking the time to know their audience.
2. Getting Started
It is all about crafting a great product. Investing in the right science and technology is what creates meaningful differentiation and what provides a compelling experience to consumers.
Dispensary education is key. Ensure the budtenders are well educated on your product so they can make informed recommendations to consumers.
4. Making Personal Connections
Encourage consumers to share their stories with you on social media on how they are using your product. Take that feedback and build marketing campaigns around those use cases because there are likely many others who would use the product in a similar way.
5. Increasing Store and Website Traffic
Tell a compelling and unique story and connect with journalists, even local journalists, who will tell that story to your target audience.
6. Start Out Strong to Remain Profitable
Whatever you do, it needs to be sustainable and profitable from the beginning. Entrepreneurs often rush to scale, raising a lot of money at the beginning, but they never figure out profitability and it inevitably comes back to bite them later. Focus on doing things well and driving sales early on.
Bharat Ayyar is the Marketing Director at Sunsoil, which sells CBD products. He helped come up with an integrated and aggressive marketing approach for the brand in which new Sunsoil customers are offered up to $200 to switch their subscriptions from other competing CBD brands. When thinking about what other companies do in order to get consumers to switch to their brand, Ayyar noticed that they give out all sorts of crazy incentives, and he wanted to do something similar.
Once shoppers sign up using this link, they will get an initial $50 credit, which they can use for a purchase, with no proof required of purchasing another brand. In order to get the remaining $150 credit, customers have to submit some proof of purchase from another brand such as a receipt, a photo of the product, or an email confirmation.
Ayyar’s Secret for Success:
“We are super careful about what we choose to spend our money on. We do not spend a lot on brand initiatives and we do not have a celebrity spokesperson. We think really hard about those things because the costs essentially get passed down to the consumer, so despite the pandemic and downturn in the industry and economy as a whole, we have kept our costs down and still played a profitable and sustainable economy.”
Attain Financial Support & Guidance
Erick Dickens is the CEO and Co-Founder of Kadenwood Inc., a CBD products brand. Before the company was founded, Dickens noticed an immense lack of professionalism in the marketplace, and so he made sure to bring expertise to his brand, which allowed them to stand out from the competition and be the first of their kind.
Dickens wants entrepreneurs to know that they do not have to do everything alone. There is so much support that can be found through investors, business advisors, lawyers, and more to help ensure things run smoothly and effectively.
“We have been fortunate to recruit very capable people that we have actually worked with for a decade or more, as well as having incredible support from our investors — both financial support and guidance and networking support — to help us overcome challenges not only the industry has faced, but also challenges that everyone in business has faced over the years with COVID, lockdowns, and supply chain issues. We have very supportive investors,” Dickens said.
Dickens’ Secret for Success:
“Do not underestimate the level of funding you will need to succeed, and especially now as the category is starting to stabilize, creating a point of difference is even more challenging. The real success is making sure whatever proposition you have is appealing to consumers so that you can differentiate yourself.”
Utilize The Most Popular Social Media Platform
Kyle Dulay is the Co-Founder of Collabstr, a marketing platform that connects influencers and brands so they can work together. He has seen the marketing power that TikTok brings to the table, and how it can be one of the most effective ways to build brand awareness and bring your products to life. With more than 689 million monthly active users, there is still an evergreen opportunity for cannabis brands to make their products viral and interact with consumers more closely.
“TikTok just presents a huge opportunity right now,” Dulay said. “The platform is super young, the amount of organic exposure on there is unmatched, and more mature platforms such as Facebook or Instagram do not offer the same type of exposure as TikTok. With other platforms, in order to get higher impressions, you have to pay a premium to run ads, but on TikTok, you are rewarded for just creating high quality content. It is a huge opportunity that I do not see a lot of brands using.”
Dulay’s Secret for Success:
“Once you have your own TikTok page, start posting content yourself because it is good to have a presence so this way once you start using influencers, they can link back to your page, which will include your website and a small bio about your company. Next, you need to figure out the niche market you plan on targeting. While staying away from cannabis, go to the search bar and type in whatever ailments your products can help alleviate, such as insomnia or pain relief, and see who else has posted content about those topics. Reach out to them, describe your product, and soon you can have 20,000 followers.”