How to Find Partners in the Cannabis Industry
May 10, 2021
The cannabis industry is attracting investors and new businesses at a rapid pace. It’s not surprising amid a surge in state legalization, coupled with the news that 2020 U.S. sales increased by an eye-popping 67% to 71%, according to analysts. If you’re reading this, maybe you’re one of the thousands of individuals who wants to launch a plant-touching or ancillary cannabis business in the next couple of years.
But without proper planning and long-term partnerships in this highly competitive space, the cannabis boom can turn into a big personal financial bust—and quickly.
When you’re searching for the right people to throw in with you on your cannabis venture, it’s essential that you select partners who will grow with you and who are genuine experts in their field, whether that’s finance, operations or regulatory compliance. Why? Because in this space, relationships matter—and they can make or break your business.
Long-Term Relationships for the Win
We’ve all heard the business trope about how much more expensive it is to hire and train new employees and partners than it is to invest in your existing people and infrastructure. (A refresher: It costs about 20% of a lost employee or partner’s salary to replace them. And the higher the lost partner’s level of expertise, the more expensive it is to replace and retrain.)
Intuitive, sure. But in an industry as fast-moving as cannabis, the temptation exists to find, hire and leverage outside expertise as quickly as possible without ensuring it’s a good long-term fit.
However, if you properly vet your partners, everyone benefits. When you find someone who will, as I like to say, be in the boat with you (and not bail at the first sign of rough waters), you’ll both gain from commitment, consistency and sustainability. It may take you longer to find that person and it may feel like an unneeded upfront expense, but you’ll save on costly changes, onboarding and retraining down the line.
And project consultants who swoop in and tell you how to spend your money—offering advice on cultivation facility upgrades, which employees to hire, or go-to-market branding initiatives—can be helpful in the short term. But they may not be there with you if, for example, your earnings 12 months into operations are less than projected and you are faced with critical decisions like deciding who to lay off or where to trim your marketing budget without tanking the future of your business.
A cannabis consulting business that is strong and financially secure is much less interested in a quick, one-off gig to line their pockets. They’re also seeking strong, reliable partners—a win-win scenario.
Looking for a quick way to tell the difference between outfits that will be with you even when the going gets tough? If a consultant tries to get a paycheck before they’ve delivered what they promised (or before the job is even close to complete), it’s a pretty good indication that they’re not going to be in it for the long haul.
Three Essential Partnerships
Having one consultant to get your cannabis or ancillary business off the ground is great, but as with anything (and especially in cannabis), diversity in skill sets and experience are essential. I like to explain it as a three-pronged approach to success:
Operations:
You need folks who are gifted in business admin and ops, foundational problem-solving, scaling initiatives and flat-out business execution.
Regulatory:
Calling all lawyers and compliance experts. These professionals serve as important navigators, especially if you’re entering a new market and need to understand everchanging, always-murky regulatory environments.
Money management:
Where the money flows, the decisions go—and you need to have people on your side who can guide you intelligently and transparently.
Of course, there are plenty of other folks you’ll want to tap as you build your business. But when it comes to long-term partnerships and which ones to foster, the three above matter the most.
What to Look For in a Partner
A good long-term partner for your cannabis business goes beyond whether or not they’ll stick around. You need to look for transparency, straight-shooting and honesty. So, as you vet these partners, don’t hold back. Let them know the personality type you’re looking for and that you expect to rely on these individuals— suckups and sycophants be gone.
Organizations that are willing to invest in you—to teach you to fish, not just hand you a trout—are the ones that will pay off in the long run.
Potential partners who can articulate their positions and recommendations with hard-won experience, data and proven processes will also serve you incredibly well as you grow.
And, as I always recommend, bringing in people with diverse skill sets will do wonders for the health of your business. You’re not supposed to be good at everything—but do make sure to be good at recognizing others’ expertise. Whether the gaps you need to fill are in cultivation, manufacturing, marketing or money-management in highly regulated spaces, the right expert with the right skills makes a profound difference. And when you’re first starting out, it doesn’t hurt to find partners who have expertise in a couple of areas—it’ll save you time and money down the line if your cultivator also happens to have distribution or sales experience.
You and your business deserve the right answers, support along the way and people and organizations who are committed to growing with you—not making a quick buck. So, invest in yourself and your business with long-term partners who will elevate you. Having a dedicated crew that paddles together will help you weather any storm and pay dividends down the line.
https://www.cannabisbusinessexecutive.com
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