Welcome to Gooey’s Coffee Shop Cannabis, where I take exactly 420 words of your day to teach you about the business and science of the emerging cannabis industry. I promise to address any feedback in the comments.
To set the mood, listen to Cab Calloway tell you how it is in 1932, five years before marijuana became illegal in the United States.
Previous installments in this series:
- Gooey’s Coffee Shop Cannabis, Part 1
- Gooey’s Coffee Shop Cannabis, Part 2
- Gooey’s Coffee Shop Cannabis, Part 3
- Gooey’s Coffee Shop Cannabis, Part 4
- Gooey’s Coffee Shop Cannabis, Part 5
- Gooey’s Coffee Shop Cannabis, Part 6
- Gooey’s Coffee Shop Cannabis, Part 7
So you wanna get into the cannabis industry, eh? Despite the prevailing panic among eager entrepreneurs who fear they’ll be left behind, there’s going to be plenty of opportunities….
Replacing the Fallouts
Please don’t mistake me some a pessimist (I’m actually a realist with optimistic undertones), but there is going to be a huge fallout in the cannabis market now that California has opened its doors for legal adult use. Some of the smartest consultants and marketing experts I’ve worked with in California predict that 60-80% of existing and new “legal” marijuana businesses (assume those created in the next 3-6 months) will be out-of-business within one to two years.
This will result mostly from mismanagement and a lack of compliance with regulatory oversight. Businesses with valid permits will be shut down by district attorneys and government authorities following inspections and audits (this will be especially true for processors using volatile solvents).
However, jurisdictions won’t want to lose the tax revenue collected from a well-managed cannabis business. Thus, new opportunities for entrepreneurs will emerge as cities re-open license application submission periods.
In addition to the demise of cannabis businesses that are mismanaged or fail to comply with regulations, other opportunities will open for entrepreneurs in the coming months and years.
Dozens of jurisdictions in California have banned cannabis businesses within their borders. However, after tax revenues are flowing into the coffers of city governments lacking bans, neighboring jurisdictions with bans in place will become envious of the cash flow.
Voters will pressure city and town councils to modify or even eliminate bans, necessarily obligating them to license new cannabis businesses. Those communities not wanting retail stores on every corner will pursue industrial zoning and court businesses like processing, manufacturing, distribution, and transportation.
The panic being experienced in the burgeoning cannabis industry, especially in epicenters like Los Angeles and San Francisco, is understandable; no entrepreneur wants to lose a seat at the table. For many, the goldrush is an opportunity to own or manage a progressive business serving a new age of informed consumers.
As I tell my clients, it is better to take the time to develop a robust business plan and detailed strategy than to rush into the industry half-baked. This is business 101: Even the best executed crappy strategy is a crappy strategy.
The cannabis industry is attracting so many intelligent, driven, and charismatic entrepreneurs and leaders that crappy strategy won’t cut it.
If your strategy isn’t really solid when you launch, you’re already dead.
All text and photos, unless otherwise noted, Copyright © 2003-2018 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.