Now that cannabis is enjoying increased legality levels across the United States, many long-time growers are delighted to move into the business sphere. Suddenly, thousands of growers can enjoy the status of “legitimate business.”
That means it’s time to get down to the practical details of running a company, and the first challenge cannabis growers face is scaling up their enterprises.
Doing so is necessary to drive income and profits. Scaling is also crucial to surviving as a business as this industry is becoming a highly competitive sector. Cannabis entrepreneurs who don’t move aggressively to capture market share face the prospect of failure.
The first tool of scaling is marketing. Marketing is the process of finding thousands of prospective buyers for a product and converting them into paying customers. Entire libraries have been filled with marketing books. However, a key area in the Digital Age is online marketing.
Digital marketing includes SEO and developing social media campaigns. SEO stands for search engine optimization, of course. Cannabis sellers must leverage powerful SEO strategies to ensure their online stores, portals, and websites get robust traffic. Just as marketing itself is the subject of thousands of books, SEO is also a highly developed art. The learning curve to master it is significant. Thus, it is advisable to consult with professional SEO experts and providers.
The same goes for social media marketing. Marketing on platforms like Facebook, Twitter, and Instagram has grown in complexity in recent years. Giant corporations spend millions developing social media campaigns, and even those often falter. The newbie cannabis marketer seeking to scale up by using social media should seek professional advice.
This brings us to the critical subject of financing. Marketing costs money. According to the U.S. Small Business Administration, the No. 3 reason most start-up businesses fail within one year is the lack of capitalization. Operating cash is the oxygen that fuels business growth. To scale up, cannabis growers need solid backing from an investor, bank — or rich uncle if that’s what it takes.
Another way to raise capital today is through crowdfunding. Posting a pitch on Kickstarter is an intriguing option. The bottom line is that a cannabis start-up needs cash, and a lot of it, in the first year.