Multi-State Operation

Balancing Replication and Specialization

For most business owners — whether in cannabis or other industries — growth is the name of the game. Sooner or later, your growth plans may have you looking across state borders to new markets and new audiences. The good news is, if you’re already running a successful cannabis business in one state, you’ve learned a tremendous amount that can be applied in other markets.

The challenge for small cannabis businesses expanding into multiple states is that every market requires a specialized license application process, SOPs tailored for that state’s specific regulations, and independent cultivation and production operations.

The benefits of expanding into new states are very real. In addition to simply increasing your addressable market, you’re also significantly boosting the equity of your brand, leveraging economies of scale in non-production parts of the business, and making yourself even more attractive to potential acquirers.

But how do you take on the complex work of multi-state expansion while still keeping your existing business operating at the highest level? Canna Advisors provides the answer, with a team of licensing and operational experts to guide your applications and operational development. Contact us to do the heavy technical lifting, while you keep your focus on the big picture for your business.

Building a Business That’s the Same…But Different

Successfully building a multi-state cannabis operation requires a careful balance of repeatability and specialization. Without repeatability, you lose the benefits of efficiency and economies of scale that justify expansion. Without specialization, you risk running afoul of local regulations...or never winning entry into a new market in the first place.

Efficient, Effective License Applications

New cannabis markets are opening up at a rapid clip, but no two states are approaching the process in the same way. Every legislature and regulatory body develops its own set of priorities, rules, and requirements for awarding licenses.

Discovering efficiencies and repeatability in the license application process is possible, but only with an extremely in-depth understanding of each state’s unique requests. Approaching license applications with a cookie-cutter or cut-and-paste strategy is a sure path to missed opportunities and lost licenses.

An expert team can help you craft applications that are primed for the highest likelihood of success in each state, while still minimizing duplicated work.

Not-So-Standard SOPs

When you start out with a small business, you can often keep an eye on - and a hand in - nearly every aspect of its operations. As your business grows, however, Standard Operating Procedures (SOPs) become a critical part of ensuring every part of your team is working carefully and consistently. (This is especially important in a compliance-heavy industry like cannabis.)

Now, imagine you’re growing into a whole new geography and regulatory structure. SOPs are even more important as you onboard new employees and open up new operations outside of your immediate view. But what’s standard in one state won’t necessarily work in another. Instead, the keys to multi-state operation success are three-fold:

  • Foundational SOPs that apply to every branch of your business, regardless of location or a specific place in the supply chain. These ensure consistent quality across all your operations.
  • Repeatable SOPs that govern the processes of each operation from one state to the next, despite differing regulations. These might include things like the handling of cash, packaging and labeling procedures, proper product waste disposal, deliveries, and patient processing. Keeping processes repeatable as much as possible makes management much more efficient and integrated.
  • Location-Specific SOPs that are designed and detailed for the state and local regulatory environment within which each of your operations resides. Ideally, these dovetail closely with your repeatable SOPs, while incorporating the unique needs of the local environment.

Managing the details of a license application process and individualized SOPs for expansion into a new state is a full-time job. Working with an external partner like Canna Advisors allows your business to benefit from the efficiencies of our decades of combined experience and gives you the flexibility to quickly scale up and down at different stages of your expansion process.

Building Your Multi-State Foundation

When you’re ready to explore multi-state opportunities, a few questions must be answered up-front.

  1. Capital - Any kind of expansion requires capital to fuel the growth, but multi-state cannabis expansion requires funding in spades. Because you can’t move any cannabis product across state lines, you’ll have to develop production capabilities or wholesale purchasing relationships entirely within the new state’s borders. You may not be starting completely from scratch, but for some aspects of your operations, it will be close.
  2. Market Differentiation - How well do you truly understand the differences between markets? Regulatory schemes vary widely from one state to the next, and the effects of those variations trickle down in both obvious and subtle ways. It’s not enough to design your operations to be compliant with different regulatory structures. You also need to understand how to adjust your business model effectively in response.
  3. Building in Bandwidth - Most cannabis businesses are bootstrapped operations. Every person on your payroll is likely working more than full-time, just to keep the business rolling. Expansion opportunities don’t come along every day, but when they do, they can be all-consuming. How will you handle the demands of time, resources, and expertise that it takes to effectively enter a new state? Is there bandwidth on your team to make that sudden shift? Or would your business be better served with a team of external experts who provide immediate insight and resources when you need them, without adding to your payroll?

The Canna Advisors team has helped license and establish cannabis businesses in dozens of states. We eat, sleep, and breathe the regulations and technical requirements that are critical to cannabis business success. Let us put you on the fast track to a multi-state empire.

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