July 24, 2018
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Despite what many entrepreneurs might think, the marijuana industry isn’t a gold rush waiting for just anyone to jump in and strike it rich. On the contrary, this is a challenging industry that only the most patient entrepreneurs can thrive in.
However, there is one way that many entrepreneurs are jumping on the marijuana bandwagon with lower risk, fewer obstacles, and greater chances for success. Bringing mainstream solutions into the marijuana industry is a recipe for success for a growing number of savvy entrepreneurs.
Many of these mainstream solutions that are shifting to the marijuana industry are ancillary businesses that don’t come into contact with the cannabis plant at all. As a result, they’re subject to far fewer regulatory and compliance challenges. It can also be easier for these marijuana-adjacent businesses to obtain financing and avoid high taxes associated with the cannabis industry, especially those businesses that already have footprints or traction in other industries.
Some of these entrepreneurs started their businesses in completely different industries. Others started in the cannabis industry but are positioned to expand beyond marijuana in the near future if they want. The key to success for these companies is one of two strategies:
Let’s take a look at a few of the businesses offering mainstream solutions to the marijuana industry to get an idea of how the strategy has become so effective.
Companies need skilled employees, including companies in the marijuana industry. Karson Humiston founded Vangst Talent Network in 2015 to solve that problem and has become the cannabis industry’s leading recruiting company.
According to Forbes, Vangst grew its revenue by 567% between 2016 and 2017 and closed a $2.5 million round of funding. The company recruits for every position – from chemical engineers and accountants to retail managers and more.
Founded in 2014, Baker is the leading CRM tool for the cannabis industry. There are many CRM tools for businesses to choose from, but Baker established its platform as the best solution for marijuana businesses. By targeting a specific industry niche, Baker was able to grow to have over 1,000 dispensary clients across the country today.
Baker has a powerful sales strategy in place to increase leads and close more sales more quickly. By staying focused and hiring a great team, the company continues to thrive in the marijuana industry.
The founders of CanPay saw the banking problem within the marijuana industry and tried to solve it with its debit payment mobile app. Built specifically for the cannabis industry, the app makes it easier for customers to purchase marijuana without using cash.
The company has 15 years of experience that it brings to the marijuana market, and over 100 marijuana dispensaries, retailers, and delivery companies across the United States currently use CanPay to make it easier for their customers to complete their marijuana transactions.
GrowSpan Industries has been in the agricultural industry since 1979. Unlike the other businesses discussed above, GrowSpan was already an established company and brought its products to the marijuana market when the industry was just getting started.
The company was able to leverage its knowledge and experience in agriculture and farming from other industries and apply it directly to the cannabis industry, which allowed it to scale its cannabis operations and revenue very quickly. Today, the company has a strategic lead conversion process in place that ensures its continued success in the marijuana industry.
GreenBits is one of the leading cannabis retail and dispensary POS systems in the country. With a long list of state and local-specific rules and regulations that retailers and dispensaries are required to follow, GreenBits developed a POS system that helps its clients stay compliant. In other words, it does so much more than process sales and update inventories like POS systems in many other industries do.
GreenBits was founded in 2014 with a mission to build an easy-to-manage platform for cannabis retailers. The team asked shop owners about their priorities and problems in order to develop a POS system unique to the cannabis industry. Today, the company has a growing list of satisfied customers.
The need for marijuana-adjacent businesses continues to grow as more states legalize medical and recreational marijuana. With the legalization of recreational marijuana in Canada, international growth opportunities are growing quickly.
Ancillary businesses are well-positioned to benefit from that growth. Already, marijuana-targeted insurance companies like National Cannabis Insurance Companies, law firms like Clark Neubert, and schools like the Cleveland School of Cannabisare opening across the country.
It will be interesting to watch these businesses in the coming years and see which rise to the top as the marijuana industry continues to grow and become even more competitive.
