In this series, I’ll take exactly 420 words of your day to discuss social, political, and legal topics related to the business and science of the emerging cannabis industry. I promise to address any feedback in the comments.
To set the mood, just listen to Cab Calloway tell you how it is…in 1932 (five years before cannabis became illegal in the United States).
I moved to Los Angeles to focus on municipal-level compliance documentation for legal cannabis businesses. Immediately prior to relocating, I developed more than 100 county-level applications for outdoor cultivation in Humboldt County, California. Before that, I was developing state-level cannabis business applications for clients in Colorado, Illinois, Maryland, and Pennsylvania.
In this installment of Gooey’s Coffee Shop Cannabis, let’s discuss what I didn’t know before I came to Los Angeles to help legal cannabis businesses get permitted.
Most of us know that the “greenrush,” the label for the fledgling and disjointed cannabis industry in states like California and Colorado, is a hot market.
While the rumors and mainstream press give the impression that there’s more money in the industry than there actually is, there is certainly plenty of opportunity (and some folks are currently making bank). Especially for insightful, humble, hard working entrepreneurs.
Lesson #1: Clients Need Strategy
I have to, somewhat embarrassingly, admit that I anticipated moving to Los Angeles and jumping right into the hardcore development of permit applications for legal cannabis businesses.
I’m spending much of my time, however, consulting clients on strategy and direction. Big picture decisions, such as which market segment to enter.
Take an individual, non-institutional investor with between half a million and three million dollars. Do they launch a delivery business? Transportation? Maybe distribution? Will cultivation and dispensing be such crowded markets that margins will become too thin?
Ah, the questions. I am spending so much time in this strategy determination phase with clients because they know that, two to five years from now, they’ll either be multi-millionaires or one of the 70-90 percent that didn’t make it.
Lesson #2: Cultivation Will be Crowded
I moved to Los Angeles to surround myself with cannabis industry professionals. All of the smart kids I talk to are cautioning clients to think very carefully before getting into cultivation. Some industrial players in Colorado have, according to rumor, gotten production prices down to about $300 a pound.
Now that’s probably nothing to write home about in terms of top-shelf quality. But look at Budweiser’s market share in the beer industry.
Think transportation, security, distribution, and delivery. Think different.
— Gooey Rabinski
All text and photos, unless otherwise noted, Copyright © 2003-2017 Gooey Rabinski. All Rights Reserved.
Gooey Rabinski is a technical writer, photographer, and compliance documentation specialist for cannabis businesses who has contributed feature articles to magazines and media outlets such as High Times, CannaBiz Journal, MERRY JANE, Emerald Magazine, Grow Magazine, Herb.co, The Kind, Skunk, Cannabis Culture, Whaxy, Heads, Weed World, Green Flower Media, Cannabis Health Journal, Green Thumb, and Treating Yourself.
He is the author of Understanding Medical Marijuana, available on Amazon Kindle.