Earning a Cannabis Business License: Putting Soul in Your Spreadsheet
July 15, 2020
July 15, 2020
Contributing Writer: Michael Werner
Profits in Cannabis Take More than Previous Business Success
A spreadsheet on your screen may be just that–a sheet, screening you from seeing the bigger picture. The bottom line for entering the cannabis industry is the ‘triple bottom line’. Supporting people and planet (while pursuing profit) is the ethos behind state after state’s legalization and licensing process, whether that jives with you or not. We all know this business and its profits exist, and have for a while.
So, to the businessperson with experience and success outside of regulated cannabis: You’re not special. But you’re important, and I’ll get to that.
More Than the Next Profit Center
There is too much historical, political, medicinal, agricultural, macroeconomic (I could keep going) impact for the cannabis industry to just be the next profit center for the experienced entrepreneur or investor. As the bricklayers of the regulated cannabis industry, we are tasked with correcting the ‘war on drugs’.
We must recognize systemic issues like mass incarceration and the need to empower the chronically disadvantaged like people of color, women, and veterans. We witness family farms losing their way of life to large corporations. We see the ill without access to proper medicine. We are living at a global tipping point of climate change policymaking. In short, we are ushering this industry from illegal, unbridled capitalism into legal, regulated, for-profit businesses…with fiduciary duties to support our communities and the environment.
Essential Elements of Cannabis Programs
More than pivot and lookup tables if you want to be a ‘cannapreneur’, eh? Consider requirements for Social Equity Programs, Patient Education Plans, Diversity Plans, FDA-worthy equipment and facilities, required eco-friendly lighting and water reclamation measures — just to name a few. These are not ‘silly barriers’ or ‘just hoops to jump through’.
Imperfect as a process may be, these elements communicate your state’s vision and goals for the industry’s leaders, movers, and shakers that it will oversee and regulate. And, subsequently, these are the same people and groups from whom they tally those jobs created and collect those tax revenues on your spreadsheet.
Connecting the “Soul” and The Spreadsheet
Respecting the ‘triple bottom line’ concept gives you an advantage in the pursuit of that coveted license to operate. Adding in the people and planet elements help remove the barrier of the one-dimensional, profit-driven spreadsheet screen.
You can have the ‘perfect’ property or feel you’re ‘extremely’ experienced. But, often, an applicant can score more points for effectively communicating how diverse its employees are (or will be) as it would for checking the box of ‘adequate source of funds’. The “soul” elements can set you apart from your competition.
Here’s Where You Come In
So, we’ve dared to address the heart and soul of being a ‘cannapreneur’. But, indeed, the mind of the ‘experienced businessperson’ is important. Financial models, business plans, and proof of experience as a successful entrepreneur and business person are required.
You must prove a return on investment, forecast depreciation, and provide an exit strategy like a new venture in any industry.
Here’s Where We Come In
At Canna Advisors, we identify what it takes to win a license and guide our clients through it. If you need help corralling your C-suite, choosing the best property, or fundraising, we’re there.
But we also provide a crash course in-depth education on the historical, legal, and political labyrinth that defines this industry in the past, present, and will into the future. This is not applying for a liquor license one hundred years after the abolishment of prohibition. This is a real-time flip of the switch from crime to (conscious) commerce.
This is not a ‘rinse and repeat my model for profitable real estate investment’, nor a ‘money isn’t an issue; how much does it cost to get in?’ scenario. Canna Advisors’ logo is a brain and we encourage hopeful cannabis business operators to think for the reasons above. Use your mind beyond business to consider the heart and soul of this industry as you approach it.
We have many anecdotes of working with relatively under-resourced, lesser-experienced, locally-based social equity applicants who won license pursuits over the larger operators with bottomless bank accounts and feisty lobbyists because passion and reverence are just as important as profits and revenues.
I echo our Founding Partner, Jay Czarkowski, from a recent article: “How will you help the industry and the people it serves?”
This is so often the necessary — and undervalued — introspection that separates license winners from losers.
If you have the passion but lack resources, reach out to us. If you have resources but lack education, reach out to us. We work every day building the industry. And we do so in a way that wins licenses for our clients and supports the spirit of the next great global industry.