“Pick your name and purpose”
This post is Part 2 in the series titled Navigating the Application Process in the Medical Cannabis Industry, where Mora Mota Group looks to share some of the keys to success as a Small Business Startup looks to emerge within this industry.
Once you commit to opening a business in the Medical Cannabis Industry, choosing the business’s trade name and the products you intend to sell in your specific market will have a long-lasting effect on the trajectory of your business.
We have met a vast number of Entrepreneurs, who currently own or are looking to start a Medical Cannabis company, that have quit their day jobs to transition into new roles in this Industry. Whether they look to advance their career, seek to explore opportunities in a new industry, or positioning themselves to rake in the cash, hundreds of professionals understand their talents can be useful in the Medical Cannabis Industry.
Until very recently, there were few Entrepreneurs who had a strong desire to enter the Medical Cannabis Industry, generally due to the federal-level scheduling of Cannabis, and I’ve met almost no little kids that want to farm Cannabis when they get older. Nevertheless, who ever decides to jump into this budding Industry takes the risks associated with any other startup venture.
A pivotal decision for many businesses during the early stage of their startup is choosing their trade or “brand” name and narrowing down the “why” your company exists. While it may seem like one of the most critical moments in time for you company, it is, but establishing a competitive product in this emerging market will take a considerable risk and a fine understanding of your market..
In this post, Mora Mota Group will illuminate various questions every Medical Cannabis company will encounter as they begin to ramp up their startup.
Your Identity: Does your name really matter?
Every business needs a name to establish the identity of the business, and as the Medical Cannabis Industry has matured over the last two decades, businesses have moved away from many of the cliche names of the past. Where some startups have begun to focus on wellness and health conscious meanings behind their names, others may use local terms or memes as their branding tools, which may help or hurt their chances of success.
Markets will also be shaped and influenced by their regional culture. While two Dispensaries may sell strikingly similar products, there will be a significant difference to how a product is marketed in New York vs in Oregon. Will your brand thrive on the East Coast, but fail to attract customers in Southern states, or have you positioned your product to reach a wider audience by using a funny euphemism?
So in short, yes, however, the market will typically be attracted to the best products no matter what the name on the package.
The Market: Do you know know the stakes?
There are major implications in deciding the market you choose to operate as every State’s regulatory framework is unique. Its understood that most of the top companies in this Industry have battled regulatory issues year after year, and it won't be changing any time soon. There will be States that implement a strict regulatory framework, pushing out would-be Entrepreneurs from opening their business there. While Legislators try to learn from the mistakes made in states like Colorado or Washington, there is no guarantee for smooth sailing in these newly regulated markets.
For example, there are few States that have utilized a vertically integrated framework, which requires a single company to produce, process and provide access to Medical Cannabis for state-registered patients. Other States may have setup high barriers to enter the market, but choose Applicants based on a lottery system, thereby increasing the chances for highly qualified Small Businesses the ability to obtain a license to operate. Some States have almost no requirements to obtain a license, opening the market to more applicants and as competition increases, businesses must innovate to earn their customer’s business.
You must carefully choose the market that best fits your product or service; while one State may be favorable for your business, another may easily set you on a path to failure.
Your Purpose: What makes your business stand out?
Identifying the key aspects that distinguish your name among the many will take patience and a willingness to adapt to your specific market. In order to establish a distinguished brand in a quasi-commodity industry, what features are unique to your brand that will help differentiate you from the rest?
As a cultivator, do you produce limited strains for a specific patient, or maybe you use an Integrated Pest Management system that benefits the environment? If you make THC or CBD-infused edibles, are these products sugar-free, gluten-free, or maybe grain-free? As a Dispensary Owner, is your space nicely scented, welcoming and makes people want to stay or is designed for people to get their medicine fast?
Do your due diligence in understanding your market and be willing to embrace those key components that help your company stand out.
The Medical Cannabis Industry will always be influenced by the culture, trends in the market, and new technologies that are discovered as it begins to mature. The best way to stay relevant during this process is take the time to learn what is important to your customers. As businesses continue to grow our understanding of Medical Cannabis, the brand names that earn their loyal customer base will do their homework so that they can find their purpose and give the consumers what they want.
Check back next week to read Part 3 on Navigating the Licensing process in the Medical Cannabis Industry as Mora Mota Group provides more advice for small business startups in the Medical Cannabis Industry.