Turning Current Growth into Long-Term Success
Compared to the regulatory limitations and complications of cannabis, hemp can seem like a dream industry – with sky-rocketing growth and a national marketplace to serve. To an extent, that impression is true, but it’s not the full picture. The growth and opportunities are real, but so are the capital outlays, the competition, and the need for detailed planning.
The most successful hemp entrepreneurs take the long view — thinking well beyond the heady start-up phase and planning for success even when the market’s exponential growth inevitably slows.
The hemp industry is flooded with entrepreneurs with big dreams. But the ones who are positioned for longevity and a true return on their investments are those who educate themselves on the industry, plan before they plant or process, and work in tandem with industry experts.
Contact us today for guidance with business planning, financial modeling, and detailed operational processes for your hemp business.
To Plant or Produce (or Both)
Choosing your entry point is the first step to planning a hemp business. You can be a cultivator, a processor, a product and brand developer, or some combination of those categories.
Cultivating hemp is an attractive option for entrepreneurs with agricultural resources at their disposal. Many hemp cultivators are farmers with land and equipment that had previously been dedicated to other crops.
But, a plan for hemp cultivation must begin with an endpoint in mind. Will you sell your hemp wholesale, or will you make your own market products? If you plan to make products, will you process your hemp on-site or send it to a contract processor? And regardless of your choice, have you identified potential buyers for that wholesale hemp or branded product?
Hemp cultivation planning must also take into account the potential for crop failures or the possibility that some plants test above the mandated THC limit.
Hemp Processing and Production
The hemp plant can be developed into an amazing array of products, including consumable, topical, and cosmetic applications, as well as industrial products like paper, rope, textiles, and building materials. The demand is high for processing hemp into usable forms like oils and fibers.
However, manufacturing is capital-intensive. Industrial-scale extraction equipment can cost millions of dollars. Product development adds its own set of costs and challenges from there. Successful producers must also build rock-solid relationships with the cultivators supplying their biomass, ensuring that they have a steady source of consistent, quality hemp grown or processed to the right specifications for their needs.
Detailed financial modeling and business planning with the experienced team at Canna Advisors can reveal the most valuable opportunities for your production operation along the supply chain.
The Keys to Hemp Success
Compared to cannabis, the hemp industry has fewer barriers to entry, an easier licensing process, and a freer legal status. However, substantial gray areas remain, and compliance specifics are likely to be a moving target for quite some time.
Despite those uncertainties, certain considerations will remain universal for anyone stepping into the hemp space:
- Financial Modeling - Realistic, well-informed financial modeling is the key to identifying the right opportunity for your business resources. The U.S. hemp industry is still new and time-tested roadmaps don’t yet exist. But the team at Canna Advisors understands the industry’s financial dynamics, and we can lead you through the best use of capital in each phase of your business.
- Understanding the 2018 Farm Bill - The 2018 Farm Bill legalized hemp-derived products and set the framework for each state’s Department of Agriculture to regulate hemp businesses. But significant confusion and misinformation still surrounds the specifics of the bill. Understanding the details of the legislation, what it allows, and what is left unsaid must be a cornerstone of your business planning.
- Sourcing Quality Genetics - Hemp plants that test above the federally mandated 0.3% THC limit are effectively useless for your business. In order to avoid suffering substantial product losses or possible law enforcement action, hemp entrepreneurs must consistently be able to obtain genetics that have been proven to produce legally compliant plants under a variety of environmental conditions.
- Branding and Marketing - The hemp marketplace is overflowing with products, much of it with little to differentiate it from the rest. Without a strong brand identity and a well-developed marketing plan, your plants or products have little chance to stand out from the competition. Adding to this challenge is the need to remain compliant with advertising restrictions set out by the Farm Bill and the FDA, while still making the most compelling claims possible for your product.
The expert team at Canna Advisors can help you navigate each of these complexities and guide you toward long-term success.