I have been involved in the cannabis industry for a long time, way before there were any legal medical marijuana or recreational marijuana states. This of course was when the entire industry was in the shadows, and the only ‘businesses’ that existed were blackmarket related. The only overhead and investments involved were sandwich baggies, grow supplies, and scales. My how things have changed.
One of the most common questions I get these days is, ‘what is the best investement in the cannabis industry?’ It’s a logical question, considering how much money is involved in the cannabis industry right now, and how much growth is likely to occur in the upcoming years. Most people want to invest in a grow operation, or a dispensary/store, or a smoking device. While these things are good ideas and are probably fun to pursue, I don’t recommend them simply because so many other people are pursuing those ideas. Below are five business ideas that I think are the best ones in the industry right now to invest in. If you have ones to add, please do so in the comments section:
Cannabis testing is going to be a requirement going forward in the cannabis industry. All recreational states require it, all new medical states require it, and soon, all older medical states will likely require it to as they revamp their laws. Not that many people are trying to get into this sector of the industry right now because it’s not as ‘sexy’ of an ideas as establishing an industrial garden or retail outlet. There is also virtually no branding right now for cannabis testing, so if someone started a lab and had a strong branding campaign, they could easily become the ‘gold standard’ of testing and push out the limited competition that’s out there right now. People need to be able to go into a retail outlet and say, ‘I want this strain because it was tested by X company, which is more reputable than this other company.’ That doesn’t happen right now. People just see that the cannabis was tested by someone, anyone, and go from there, rather than looking for cannabis that was tested by a particular company.
Cannabis Real Estate
People are scrambling to get into a cannabis friendly warehouse, or retail location, or even a cannabis friendly dwelling unit right now more than ever before. There are a handful of companies that are acquiring real estate right now and marketing properties exclusively to the cannabis industry, but a vast majority of cannabis businesses right now are just simply renting from anyone that will allow them to do so. If someone could offer real estate to all of the people that can’t find a cannabis friendly property to house their business right now, they would be very, very rich.
One of the most successful business models I’ve ever seen in the cannabis industry in Oregon is the ‘World Famous Cannabis Cafe.’ You can go in there for a small door fee and consume all the marijuana you want in a social environment. For the same reason that people go to clubs and bars that revolve around alcohol, so too will people that consume cannabis want to go out and socialize with other like minded people. If you’re single, and consume cannabis, you want to go somewhere to meet other singles. If you are a couple that consumes cannabis, you want to go out for a night on the town and frequent establishments that allow you to consume cannabis. These establishments can sell cannabis too, but door fees and concessions are more than enough to generate a lot of profit, and wouldn’t require a retail license at all. This is a great idea for investors that want to operate in an area that limits or bans retail establishments. I’ve been saying over, and over, and over that if someone opens up a chain of cannabis arcade game establishments, they will be make so much money they won’t know what to do with it. I know I’m going to open one up eventually whenever I can find an investor! Cannabis tourism would fall under this category too – bed and breakfasts, tours, etc. It’s a very hot, yet underserved sector of the cannabis industry right now, which is something that I don’t think will last very long.
If you have ever been to a quality cannabis event, then you know first hand just how packed they are. If an event charges $100 to attend, and there are thousands or tens of thousands of attendees, it’s pretty easy to see that there is a lot of money being generated. Add to that vendor fees and other things that you can charge for, and the profits grow even larger. There’s obviously money that has to go out to rent the facility and pay speakers/performers, but there’s so much money left over that it’s a great investment, especially considering the event is only for a day or weekend usually. Business seminars, concerts, etc., they are all good ideas. Just realize that not all events are created equal, and consumers know that, so come correct. Long gone are the days when you can just rent a park, invite unknown bands, have crappy vendors, and expect to make money hand over fist.
Consulting is big business, whether it’s in the cannabis industry or otherwise. People that are experts in their field get paid a lot of money to share their thoughts and ideas, and the cannabis industry is no exception. There are a lot of people out there right now that are getting paid a lot of money for consulting cannabis businesses, and I have to say, they are not that good at what they do. Current cannabis consultants usually, but not always, fall into one of two categories. 1) They have a great knowledge of business, but don’t know very much about the cannabis industry/movement/culture, which has a lot of nuances that are very important to know in order to succeed in the cannabis industry. 2) They know a lot about the cannabis industry/movement/culture, but they are horrible at standard business skills like time management, money management, and overall vision. There are a handful of good ones out there, but most of them I would never endorse. This has created a prime opportunity for people that possess both traditional business skills and cannabis experience/knowledge.