5 New Cannabis Markets Have Emerged: How can businesses prepare for success?
By Rob Woodbyrne
- Five new states approved cannabis initiatives; another six may legalize cannabis recreationally in 2021.
- The cannabis industry has its own unique set of challenges for companies looking to secure long term growth.
- To circumvent these challenges, cannabis companies need to identify strategic business partners with fully customizable software that integrates with all areas of your business to give you more control over your expanding company.
Voters created five new opportunities for the cannabis industry to grow in November when they passed laws legalizing either medical or recreational marijuana (and in one case, both!) in states around the country. From Arizona to New Jersey, former black market businesses, cannabis entrepreneurs, and the business savvy are beginning their plans to secure their slice of the market.
Whether you are an established cannabis business or looking to break into the industry, there are important steps you should take now to streamline your business for future success – steps that include putting efficient operations management procedures in place to boost revenue and minimize loss and waste.
For commercial cannabis cultivators, this can be critically important. Proper planning before beginning to grow and systematic workflow management throughout the growth cycle can result in stronger yields (and higher revenue) come harvest.
Newly Legalized Cannabis Markets
The list of cannabis markets set to come online has expanded after legalization initiatives went 5/5 in November’s election. Voters in Arizona, New Jersey, and Montana passed measures legalizing recreational marijuana. In Mississippi, voters approved medical marijuana programs for the sick in their states. Not to be outdone, South Dakota became the first state to legalize both recreational and medical at the same time.
In the coming year, another half dozen states are anticipated to possibly legalize recreational marijuana: New York, New Mexico, Pennsylvania, Connecticut, Virginia, and Maryland. New York in particular will be a large market to come online, with a potential billion dollar value in the first year.
In fact, in early 2021, the Governor of New York publicly announced a proposal to legalize cannabis which would effectively create the world’s second-largest legalized market, after California. He tweeted on Wednesday, January 6, 2021, “I’m announcing a proposal to legalize cannabis and create an equitable adult-use cannabis program in NYS. This program will generate much-needed revenue, while allowing us to support those that have been most harmed by decades of failed cannabis prohibition.”
This move aligns with nationwide trends towards federal cannabis legalization, which under a democrat controlled congress and white house, could be more likely to happen in 2021.
Like the states that legalized before these newly legalized ones, these new markets offer lucrative business opportunities for those willing to grab them, but the highly regulated cannabis industry offers its own unique concerns.
Issues with Modern Cannabis Business
For much of its existence, the cannabis industry was made up mostly of small businesses: ma and pop grows, edible companies operating out of home kitchens, and boutique retail dispensaries.
With such small companies, the need for operations management systems is minimal. However, as the industry continues to grow, many companies find they need help as they scale their business to meet demand.
The following are just some of the areas of importance that cannabis businesses should avoid overlooking.
- Compliance with cannabis regulations, including proper documentation
- Organized workflow and employee scheduling
- Data collection and performance analytics to understand consumer trends
- Supply chain management
It’s possible to find software and business service solutions for each of these, but this would mean a patchwork of programs and third party contractors to ensure you are optimizing your business.
Identifying The Right Integrative Solutions for Cannabis Businesses
If you are still keeping records and passing information through your business the old fashioned way or are finding it difficult to run your business using piecemeal solutions, then it’s time to make the move to a 21st century solution.
It’s important to identify and work with a strategic business partner that is capable of integrating with every aspect of your operations to help overcome the common issues mentioned above, giving you an edge over your competitors still working with obsolete methods. In order to identify which partner is right for you, make sure that the service includes a few imperative qualities and addresses specific issues.
First, compliance with local and state cannabis regulations is a primary concern of all legal and licensed business. Your supply chain management system should simplify record keeping by automating and digitizing the process, eliminating the potential for error with hand written records and ensuring you are ready if a compliance audit does occur.
In addition, it should focus on a mobile-first methodology that streamlines task management and record keeping to keep daily operations running smoothly. No matter where employees are (onsite or off) they should be able to access this information as long as they have a data connection on their device. This ensures that important tasks are completed and necessary information is shared among members of your team when they need it.
Running out of the supplies your business needs can hobble your production. Your service should also provide complete supply chain management by leveraging predictive analytics that pulls from real time and historic data so that your business has what it needs to operate optimally day to day without waiting for materials to arrive from vendors.
A strategic business partner like this should be designed to integrate with your business at every level and be flexible enough to fit your individual needs and scale with your business as it grows and, therefore, has the potential to positively impact the operations of cannabis companies throughout the supply chain.
With so many changes in this new market continually coming into play, it is important for new businesses, as well as established ones, to do their due diligence to really understand the capabilities of the supply chain management systems they are considering and assess whether those systems are the right fit for their organization. Ultimately, if you don’t have the right metrics and analytics to help set you apart from your competitors as well as increase revenue by maximizing yields per square foot, then you are potentially missing out on a great opportunity.