The cannabis industry in America may be near the end of its Prohibition Era, and working in the growing field is like being part of history in the making.
As the industry continually evolves in Colorado and makes its debut in more states, it is important to keep in mind how to shape this industry towards a more sophisticated future. As we leave the “stoner” culture behind for a more professional industry, we are also leaving behind the old designs.
For instance, tye dye and peace sign décor is a thing of the past, and brands are now picking up more sleek and sophisticated visuals for their brand, hoping to offer a storefront mirroring a boutique experience.
Building an Experience
Each dispensary brand is unique in their retail experience, from their floor plan to their unique product choices. In San Francisco, the cannabis industry is unfolding into an entire [healthy] lifestyle, with stores offering vape lounges, massages, dieticians, yoga classes and meet-up groups for outdoor activities like hiking and kayaking. Each city in legalized states have their own regulations for what dispensaries can offer to the public, making certain areas with higher restrictions harder for the brands to be successful or offer a more intricate experience.
The industry is redesigning itself to appeal to affluent elderly individuals, expanding its target market to “Chardonnay Moms” rather than the typical stoner. As this side of the industry advances, ancillary businesses are making their debut with services such as hydroponics and cultivation products, testing and lab services, lighting, packaging and warnings, security services and equipment, technology and software, online ordering, banking and payment processing, insurance, professional marketing, delivery services, consulting and professional training.
These types of businesses are “Non-Plant Touching,” meaning that they are not involved in the actual growing or selling of cannabis, so most federal laws prohibiting marijuana businesses do not apply to them. Because most ancillary businesses in this industry are founded by entrepreneurs with low budgets, they usually need assistance with funding and production to get their business started. Within the industry there are investment companies, such as ArcView and Privateer Holdings, which seek out ancillary businesses with less money to help get their products up and moving.
The New (Green) Frontier
There are many startup businesses within the industry that are predicting a huge profit within the next two to three years, as more states adopt legal marijuana laws. Many people are calling this time in history the “Green Rush,” referencing a comparison to the Gold Rush during the 1800s. One of the larger dilemmas for businesses in the cannabis industry is that most operate on a cash only basis, because most are not able to obtain bank accounts since they deal directly with the cannabis plant.
Because ancillary businesses do not directly touch the plant, most are able to open bank accounts, offering a wider path towards success for their business without strict limitations. Fortunately, more banks are opening up their doors for cannabis accounts; MBank, based in Portland, Oregon, recently decided to allow cannabis companies in Colorado to open bank accounts with them. In addition, Hypur, a software startup company located in Arizona, has launched to assist banks in auditing marijuana companies to ensure that they are safe and profitable in order to open accounts through their bank.
The growing market for ancillary businesses and services in this industry has not yet been estimated, but at this rate it will be a very successful future for many business owners and entrepreneurs in the billion dollar cannabis industry.