How Businesses and Governments Can Increase Cannabis Sales

Federal and Individual Cannabis Dollars Are Left On the Table

Lately, we’ve seen countless articles about federal cannabis rescheduling: when/if it is going to happen, what is it going to look like, rescheduling versus descheduling. We’re not going to wade into the hypotheticals with rescheduling though (suffice to say, we are not optimistic of rescheduling anytime soon). What we’ve seen less discussion about is the tangible economics of cannabis rescheduling and how federal money is left on the table. Let’s highlight what individual operators can do to avoid the mistakes of the federal government and increase cannabis revenue that’s already available.

 

The Current Cannabis Financial Landscape

Economically, the cannabis industry is an unusual place. There are reasons to be optimistic and understandable reasons to feel disenchanted. States continue to expand their medical marijuana programs and more states and territories fully enter the adult-use or medical marketplace.  But, we have seen rejections of expansions and rebukes by state governors.

Where does that leave cannabis then from a financial perspective? The good news is, people continue to be enthusiastic about purchasing cannabis and cannabis products. Legal cannabis sales last year topped $30 billion with ten states each bringing in over $1 billion. California’s cannabis market continues to lead the pack at over $4.5 billion while Michigan is right behind at a hair over $3 billion, followed by Illinois at $2 billion. Some states are struggling though. Sales across Colorado’s cannabis market hit a seven-year low last year  while Arizona saw a second year of cannabis sales decline. Which market you’re operating in has major impacts on overall feasibility of operational success and innovation and creativity are now essential in some of these markets.

 

Federal Rescheduling Can Make An Impact

Rescheduling would have a tremendous impact on overall cannabis sales nationally and prop up states which may be in need of cannabis assistance. That is to say if legislation doesn’t get in the way of preventing such financial growth potential. But  how much of a financial impact would rescheduling actually have?

 

Revenue Growth Potential From Rescheduling

As things currently stand, the cannabis market is expected to reach over $76 billion by 2030. This figure comes from factors such as expanding medical cannabis excess, growing consumer disposable income, rising demand, awareness of the medical cannabis benefits, and presence of more robust manufacturing operations. With the current state of cannabis federally, businesses are hypothetically seeing an effective tax rate of 112% compared with other non-cannabis business at 21% with 20 of the largest publicly traded cannabis companies losing a combined $2.3 billion, thanks in no small part to the absurd taxes levied on the businesses. As a result of the lack of federal action on cannabis, it’s estimated that cannabis businesses post rescheduling could see a 70-90% increase to their bottom-line fiscal sheets.

 

 

How Individual Cannabis Businesses Can Increase Revenue Now

Just because the federal government is leaving money on the table by not rescheduling cannabis, doesn’t mean you have to be too. Plenty of existing cannabis operators are struggling and luckily there are ways to better address this.

 

1) Increase Your Social Media Presence

A cost effective option is utilizing social media effectively. While business can still run into issues with apps such as Instagram or Facebook, being smart with what you post, share, and advertise, all while being compliant with state marketing and advertising regulations. Showcasing the latest product offerings, coordinating with influencers, and reaching younger demographics with any sales that may be going on can see a tremendous boost to business operations. You will also want to develop a unique selling proposition (USP) for differentiating your business from competitors. This can be by focusing on the quality of the products, outstanding customer service, or diverse product offerings. You can tout unique strands or sustainable practices as well.

 

2) Bundle Services and Optimize Logistics

On the more internal side of operations, you can also look at bundling subscription services to reduce overall costs, optimize supply chains and assess best vendor offerings, and invest in energy efficient technology. As it relates most closely with cannabis rescheduling, cannabis operators can and should invest in good accounting practices and identify a reputable accountant or financial services expert with cannabis experience to identify even more ways to save.

 

3) Get A Professional Consultation

There are plenty of ways which current operators can look at what is happening on a federal level and learn to not make the same mistakes. These steps can vary from business to business and we at Canna Advisors are here to help however we can with assessing your operational needs and how you can not only save money but make more money too.

Book an hourly consultation or contact us directly today to take advantage of our decades of experience increasing cannabis revenue streams and business ROI.