Strategies for Success: Building a Profitable Cannabis Business

Strap yourself in because we're about to blow the roof off the cannabis industry and expose the hidden hurdles obstructing your path to profit! Ever wondered why your cannabis venture is not as profitable as you'd expect, despite the booming market? Don't fret; we're here to dissect the challenges of taxation, confront the high cost of employee turnover, and pull back the veil on the regulatory obstacles. You'll discover how the ominous-sounding Section 280e of the Internal Revenue Code might be your stealthy profitability nemesis and walk away with strategies to combat it.

Yes, we're talking about branding and scaling in the cannabis industry, but not in the way you’ve heard before. Can a brand's aesthetics influence consumer choices? Absolutely, and we'll walk you through how to craft a brand identity that resonates and reverberates across all platforms. 

And while scale might be a buzzword, premature scaling can be a death knell. You'll learn to navigate these choppy waters, avoiding the pitfall of scaling before the core business elements are firmly in place.

Decision-making in the cannabis business can feel like threading a needle during an earthquake, but we're here to steady your hands. You'll learn to foster transparency, spur critical thinking, and even stir up constructive dissent, leading to robust, long-term business viability. 

And as we wrap up, you'll come to understand that building a successful cannabis enterprise requires not only tenacity and adaptability, but also a deep understanding of the market. With the right strategies, strategic planning, and execution, you can blaze your trail in the cannabis industry. So buckle up, and let's dive into the green!

Thank you for tuning in to 'Cann Strategy: Elevating Your Cannabis Business Venture'. Our mission is to empower cannabis investors, business owners, and entrepreneurs with rarely shared insider knowledge to navigate the fast-growth cannabis industry.

If you found value in this episode, please leave a review on your favorite podcast platform or share it with a friend. It makes a world of difference.

Also, don't forget to check out our website at www.cannstrategy.com for even more resources and insights into the cannabis business world. We offer a range of consulting services to help you navigate the complex cannabis industry and turn your cannabis business dream into a reality, no matter what stage of the game you're in.

Keep up with 'Cann Strategy' by following us on LinkedIn and Instagram


Have a question or topic you want us to discuss? Email us at [e-mail]

And finally, if you haven't already, hit that subscribe button so you won't miss our next episode. See you next time on 'Weed Works', and remember: knowledge isn't just power - it's profit!"


Prefer reading? To reference any of our episodes in written format, visit the Cann Strategy blog

Episode Transcript

Speaker 0 (00:00):
Welcome to another episode of Can Strategy
elevating your cannabis businessventure.
Let's delve into a burningquestion that's likely at the
top of every cannabisentrepreneur's mind why is it
that only 24% of cannabisbusinesses achieve profitability
A surprising figure consideringthe explosive growth of this
industry?
We're going to peel back thelayers of this complex issue,
examining the unique hurdlesthat stand between cannabis
ventures and consistentprofitability.

(00:21):
From regulatory challenges, theweight of 280 e-tax burdens to
high employee turnover rates,we'll tackle it all.
We'll also be shining a lighton effective strategies to
overcome these hurdles because,yes, despite these challenges,
many cannabis businesses are notjust surviving, they're
thriving.
It's all about understandingthe landscape and making
informed decisions.
So if you're eager to join theexclusive club of profitable

(00:43):
cannabis businesses, then buckleup.
This episode promises to equipyou with the insights you need
to turn potential pitfalls intostepping stones for success in
the cannabis industry.
Let's get started.
Barrier to profitability numberone is taxation.
Navigating the businessprofitability can be challenging
, especially given the uniquetax burdens imposed by the
United States federal government.
One of the main culprits issection 280 e of the internal

(01:04):
revenue code, a clause thatdirectly impacts cannabis
businesses profitability.
But don't fret.
Armed with an understanding ofthese challenges and a strategic
plan, navigating this complexlandscape becomes feasible.
Let's dive into the nuts andbolts of section 280 e.
Harking back to the 1980s, itwas originally designed to
prevent illegal drug traffickersfrom claiming business expenses
.
Fast forward to today, thisclause has a ripple effect on

(01:26):
legal cannabis businesses.
Despite cannabis being legal innumerous states, its
classification as a Schedule 1substance by the federal
government means businesses inthis field can't deduct standard
business expenses, likemarketing and rent, from their
taxable income.
The upshot some businesses facehefty tax rates, sometimes more
than 70% of their income.
This presents a significantblow to profitability in the

(01:47):
cannabis sector.
With section 280 e disallowingstandard deductions that most
other industries enjoy, cannabisbusinesses grapple with
competitive disadvantage.
High taxes eat into profitmargins, making growth and
reinvestment a steep uphillclimb.
Despite the uphill journey,there are five practical
strategies you can employ toease the tax burden and bolster
profitability.
Firstly, understanding the costof goods sold, or COGS, is

(02:09):
critical.
Under current IRS guidelines,direct costs associated with
product production aredeductible, reducing taxable
income.
Secondly, consider diversifyingyour business.
If you sell more than justcannabis, say related apparel or
accessories, you may be able todeduct expenses related to
those parts of your business.
Thirdly, it might be helpful tocreate separate entities for
cannabis and non-cannabisactivity, coupled with an

(02:30):
in-house or external CPA forhigher level corporate tax
accounting.
Finally, consider bringing acannabis tax expert on board.
This equips your business witha professional who knows the ins
and outs of cannabis taxes,optimizing your financial
strategy for maximum returns.
In summary, the tax landscapefor cannabis businesses can be
complex, but with knowledge,strategic planning and the right
resources, it's a terrain thatcan be successfully navigated.

(02:52):
Barrier to profitability numbertwo is employee turnover.
Section three Another criticaland often overlooked factor is
the high cost of employeeturnover.
It can profoundly impact acompany's bottom line, turning a
potential roadblock into astepping stone towards
profitability.
But just like taxes,comprehending this problem and
strategizing solutions can turnthe tide.
Employee turnover isn't uniqueto the cannabis industry, but
it's particularly noticeablehere.

(03:14):
Many cannabis businesses are intheir nascent stages, leading
to employment instability.
The industry's ever-evolvingnature can lead to considerable
operational shifts, sparkinguncertainty among employees.
Moreover, many roles incultivation and retail come with
physical demands and relativelylow wages, further contributing
to turnover.
Understanding the cost of highemployee turnover is key.
It's a multi-layered issue.

(03:34):
Direct costs are tied torecruiting, hiring and training
new team members.
But don't forget the indirectcosts, like lost productivity
during the training phase andthe potential morale dip among
existing staff.
A study from the Center forAmerican Progress sheds light on
this issue.
It suggests that the cost ofreplacing an employee can vary
from 16% of an annual salary forlower-paying jobs, rocketing up

(03:54):
to 213% for executive positions.
These costs can quicklysnowball, taking a bite out of
company profitability.
But there's good news Cannabis.
Businesses can employ fivestrategies to combat high
turnover and carve a path toprofitability.
The first one is competitivecompensation and benefits.
Despite the industry's novelty,that's no reason to undervalue
your employees.
Offering competitivecompensation and benefits can

(04:16):
draw in high-quality employeesand foster loyalty.
Secondly, providing ongoingtraining and development
opportunities can rev upemployee morale and engagement.
Employees who see clear growthpaths within the company are
more likely to stick around.
Thirdly, given the industry'sturbulent nature, offering a
stable and supportive workenvironment can significantly
retain employees.
This could mean clearlycommunicating expectations,

(04:37):
supplying necessary resources ornurturing a positive company
culture.
Next up is recognizing andrewarding employees.
Regular acknowledgement andrewards can increase employee
satisfaction and retention.
Remember, these rewards needn'talways be financial.
A simple thank you or publicacknowledgement can make a world
of difference.
Lastly, providing clear careerpathways is crucial.
Employees are more likely tostay if they can envision their

(04:57):
future within the company.
Promoting from within andoffering clear progression paths
can reduce turnover rates.
In essence, employee turnovercan be a significant challenge,
but by understanding itsimplications and adopting
strategic solutions, cannabisbusinesses can navigate this
hurdle and move closer toprofitability.
Barrier to profitability numberthree is regulatory challenges.
As we shift our focus frominternal organizational

(05:19):
challenges to externalinfluences, we find ourselves
facing another formidableobstacle the regulatory
landscape.
Regulatory constraints may seemdaunting and can form barriers
to profitability, but withstrategic foresight and diligent
compliance, these potentialsetbacks can be transformed into
steps toward success.
The regulatory challenges inthe cannabis industry are
layered and multifaceted.
They can range from evolvinglaws and regulations across

(05:41):
states and nations to rigorouslicensing processes, strict
product quality controls andadvertising restrictions.
Each of these elements canimpose substantial costs on
businesses.
These aren't merely monetaryburdens, but can also consume
valuable time and energy.
Without effective management,these challenges can impede
profitability.
But don't despair theseobstacles don't necessarily
spell an end for your cannabisventure.

(06:03):
Here are some strategies thatcan help steer your business
around these roadblocks, keepingyou on the path to
profitability.
First off, staying informed andbeing proactive is key.
Laws and regulations tied tocannabis are in constant flux.
Stay ahead by staying informedand being ready to adapt.
Attend industry conferences,follow credible news sources and
consider bringing on board acompliance officer or legal
counsel with expertise incannabis law.

(06:24):
Second, cultivate a compliancefirst culture.
This involves adhering to allrules and regulations
meticulously and fostering anenvironment where employees
comprehend their significance.
Regular training and opencommunication about regulatory
updates can help nurture thisculture.
Third, nurture robustrelationships with regulators.
A positive rapport with localregulators can be highly
advantageous.
It fosters open dialogue andregulators can offer guidance on

(06:47):
compliance matters.
Plus, should issues crop up,having a strong relationship can
expedite their resolution.
Fourth, consider investing incompliance software.
There are multiple optionsavailable.
Designed specifically for thecannabis industry, they can
automate reporting, trackrequirements and maintain
records, helping preventexpensive errors or oversights.
At the retail level,point-of-sale systems usually

(07:08):
come equipped with solidcompliance components.
Lastly, plan for regulatorycosts.
Factor expected regulatoryexpenses into your financial
planning.
This can encompass licenseapplication fees, legal
consulting fees, compliancesoftware costs and more.
By anticipating these expenses,you can allocate your resources
better and sustainprofitability.
The regulatory environment forcannabis businesses may appear
intimidating, but remember theserules exist to ensure the

(07:31):
safety and integrity of theindustry.
Barrier to profitability numberfour is lack of strategic
planning.
As we've explored the challengesof regulatory compliance in the
cannabis industry and effectivestrategies to navigate them,
it's clear that being proactiveand diligent is key to success.
And what spells proactive morethan strategic planning?
However, numerous cannabiscompanies often overlook this
critical process, thus missingsignificant growth and profit

(07:52):
opportunities.
Think of strategic planning asyour business's roadmap.
Without it, businesses tend tobecome reactive rather than
proactive, losing sight of theirobjectives amidst the
ever-changing cannabis landscape.
At its core, strategic planningis a rigorous effort to
establish where a business isheaded, how it plans to get
there and what measures will beused to confirm if it made it or
not.
It involves imagining an idealfuture and converting this

(08:14):
vision into concrete goals, aseries of steps to attain them
and methods to track progress.
In essence, strategic planningserves as any organization's
future blueprint, guidingdecision-making and resource
distribution.
The payoffs of strategicplanning are numerous.
For starters, it offers adistinct sense of direction,
enabling organizations to followa well-articulated path,
essential in unstable andunpredictable business climates.

(08:35):
Additionally, it paves the wayfor improved alignment, ensuring
all organization members areworking towards the same goals.
This can enhance efficiency,foster cohesion and minimize
activities that counteract eachother or conflict priorities.
Finally, strategic planningfacilitates superior resource
management by enablingbusinesses to predict needs,
identify gaps and allocateresources in ways that advance

(08:56):
their goals.
In the cannabis industry context, strategic planning is vital
due to the unique hurdlesbusinesses in this sector
encounter.
The regulatory landscape is ina constant state of flux.
Market dynamics are changingand consumer demands are
intricate and frequentlyshifting.
Without a solid strategic plan,cannabis businesses can quickly
become directionless,unprepared or overshadowed by
more prepared competitors.

(09:16):
An effective strategic planenables these businesses to
navigate regulatory alterations,stay ahead of market trends,
manage resources proficientlyand, ultimately, ensure lasting
profitability.
So how can you create astrategic plan?
Here are 10 steps to guide you.
Step one begin with a clearvision and mission.
Understand what your cannabisbusiness represents and where
you want it to be in the future.
Gather your leadership team fora brainstorming session.

(09:38):
Define your business missionand your long-term objectives or
vision.
Craft concise and potentmission and vision statements to
guide your strategic decisions.
Step two comprehend your market.
Conduct comprehensive marketresearch.
Utilize online resources,surveys and direct customer
feedback to understand markettrends and consumer behavior in
the cannabis industry.
Assess your competitors toidentify market gaps you can

(09:58):
leverage.
Step three define your goals.
Determine what you want toachieve short-term and long-term
.
Break these goals into smaller,manageable objectives that can
be tracked and measured.
Identify smart, specific,measurable, achievable, relevant
, time-bound goals with yourteam.
Document them and share witheveryone.
Step four pinpoint your keyperformance indicators KPIs.
Establish metrics that signalyour business's success.

(10:19):
Set KPIs related to customersatisfaction, financial health,
team performance and operationalefficiency.
Regularly monitor and reviewthese KPIs.
Ensure they're realistic,quantifiable and tied directly
to your business objectives.
Step five perform a SWOTanalysis.
Identify your business'sstrengths, weaknesses,
opportunities and threats.
Host a SWOT analysis sessionwith your team.

(10:39):
Use this analysis to leverageyour strengths, work on your
weaknesses, seize youropportunities and mitigate your
threats.
Step six create a strategic map.
Outline a detailed action planto attain your goals.
This should include thenecessary actions, assigned
responsibilities, requiredresources and set timelines.
Employ project management toolsfor efficient tracking.
Step seven engage your team.
Remember strategic planningisn't a one-person job.

(11:01):
Involve your team in thestrategic planning process
through workshops, brainstormingsessions or regular team
meetings.
Welcome feedback and ideas fromall team members to ensure
buy-in.
Step eight review and adaptregularly.
Schedule routine reviewmeetings to evaluate your
strategic plan's effectiveness.
Be ready to adjust your plan asthe cannabis industry changes
and your business expands.
The review could be monthly,quarterly or bi-annually,

(11:22):
depending on your specific needs.
Step nine implement a balancedscorecard.
Use a balanced scorecard systemto track your performance in
crucial areas like financialperformance, customer
satisfaction and internalprocesses.
This tool can be developedin-house or with specialized
software.
And finally, step 10, hire astrategic planning consultant.
If you're uncertain about anystep in the process, consider

(11:43):
hiring a professional consultantwith experience in strategic
planning and the cannabisindustry.
They can provide expertguidance, help craft an
effective plan and even assistin implementation and monitoring
.
With a clear vision andstrategic planning, your
cannabis business will beequipped to sail through the
dynamic cannabis market andconquer challenges.
Barrier to profitability numberfive is branding and marketing.
In the ever competitivecannabis domain, differentiating

(12:04):
your business, attracting yourideal customers and nurturing
their loyalty is crucial.
However, a scarcity ofcreativity and consistency in
branding and marketing can poseanother roadblock to
profitability.
In a sector as multifaceted andfluid as cannabis, the
significance of innovative anduniform branding is paramount.
It serves as a conduit,connecting your enterprise with
your target market, helping youstand out in an oversaturated

(12:25):
landscape, fostering robustcustomer bonds and ultimately
propelling profitability.
Despite this, some cannabisenterprises underestimate the
potency of branding andmarketing, leading to lackluster
sales and stunted growth.
They often fall prey to one ormore of these common pitfalls.
Firstly, many businesses harbora build-it and they will come.
Mentality Butting.
Entrepreneurs often believethat a high-quality product will

(12:46):
be their sole ticket to success.
The presumption that anexcellent product will just sell
itself without substantialbranding or marketing sadly
doesn't match the reality.
Given the rapid growth andconstant influx of new players
in the cannabis industry.
Even the best cannabis productrisks fading into oblivion
without a compelling brand voiceand strategic marketing
blueprint to enhance its reachand resonance.
Secondly, many cannabis businessowners undervalue the

(13:07):
significant impact of brandaesthetics on consumer
perception and choice.
They invest minimally incrucial visual identity
components like logo design,color palette selection,
packaging design and marketingcollateral.
This results in an absence ofvisual appeal and brand
distinction, seriouslyundermining a product's
potential to stand out amongcompetitors.
Humans are highly visual beingsand in a diverse and colorful
industry like cannabis, thevisual appeal of your brand can

(13:29):
be as influential as the qualityof your products.
Thirdly, business owners oftenunderestimate the crucial role
of sustained and strategicmarketing in actually placing
their product onto the shelvesand into consumers' hands.
Regardless of how attractive thepackaging or refined the logo,
mere good looks aren't enough.
Brands don't gain tractionmagically.
They need the rocket fuel ofcommitted marketing initiatives
to truly soar.
Lastly, a frequent oversight issimplifying a brand to its most

(13:52):
visible elements the logo andcolor scheme.
While these are significantfacets of brand identity, they
only form the tip of the iceberg.
A truly compelling brand delvesdeeper.
It embodies a unique brandvoice, specific positioning
strategies and a distinctivepublic communication style.
Each of these aspectscontributes to a holistic brand
identity, which, in turn,resonates with the target
audience and differentiates thecompany from rivals.

(14:12):
Neglecting these elements islike focusing solely on a cake's
icing, disregarding the flavorand texture of the cake itself.
So how can cannabis businessessurmount these challenges and
leverage the power of brandingto drive profitability?
Start by crafting a unique brandidentity.
Your brand extends beyond justa logo or slogan.
It's the heart of your business.
Invest effort in molding abrand identity that truly echoes
your vision, mission and valuesand sets you apart from rivals.

(14:35):
Next, remember that consistencyis key.
Once you've sculpted your brandidentity, ensure it is
consistently represented acrossall platforms and touch points.
This cultivates recognition,nurtures trust and boosts
customer loyalty.
Also, innovate in yourmarketing strategies.
The cannabis sector is in astate of constant flux and your
marketing strategies shouldfollow suit.
Utilize a blend of traditionaland digital marketing channels

(14:55):
to connect with your audience.
Harness social media, contentmarketing and search engine
optimization to boost visibilityand engage your target market.
Engagement is instrumental infostering brand loyalty.
Pay heed to your audience'sfeedback and make them feel
acknowledged.
This not only aids in retainingexisting customers, but also
attracts potential ones throughpositive word of mouth.
Finally, stay tuned to markettrends and consumer preferences.

(15:17):
Your branding and marketingstrategies should adapt and
evolve based on market shiftsand your audience's needs.
Barrier to profitability numbersix is scaling too soon.
In their haste to profit fromthe booming cannabis industry,
numerous enterprises escalatetheir operations at an untenable
rate, even before adequatelyestablishing the bedrock
elements of their business.
As mentioned in our discussion,financial management, staff

(15:38):
recruitment and retention,regulatory navigation, market
feasibility, strategic branding,marketing and a comprehensive
plan form the cornerstones uponwhich enduring success is built.
Nevertheless, in the rush toupscale, these vital elements
are often overlooked orinsufficiently tackled, leading
to fragile foundations incapableof supporting long-term
expansion.
Whether it's fueled by investormoney or personal funds, this
premature growth often leads toa harsh reality check, usually

(16:01):
when it's too late.
When a business finds itselftoo deeply mired in a complex
situation, remedying it not onlybecomes a tangled task, but
also a costly one.
It resembles trying to repair aleaking vessel while still
sailing, water continues to seepin.
This predicament is entirelyavoidable.
Cannabis businesses can evadethe perilous snare of early
scaling Through adopting acalculated approach to growth
and ensuring each cornerstone isfirmly set before progressing

(16:23):
to the next.
This patience, coupled with thediscipline to devote time and
resources to building a robustfoundation, can mean the
difference between joining theprofitable 24% of cannabis
businesses or becoming anothercasualty in the failure column.
Now let's discuss fivestrategies to prevent premature
scaling in your cannabisenterprise.
There isn't a one-size-fits-alltimeline for scaling your
business.
The key lies in identifying andmeticulously tracking your key

(16:45):
performance indicators, or KPIs,as these metrics will offer
valuable insights into yourbusiness's ability to
efficiently function on a largerscale.
Therefore, instead of stickingto a fixed timeframe, base your
scaling decision on thesequantifiable indicators of your
business's performance andpotential for growth.
Firstly, master your corebusiness before even
contemplating scaling.
Is your operation runningseamlessly and profitably?

(17:05):
Have you established robustfinancial management tactics,
effective employee training andretention programs, a strategic
marketing and branding blueprint, and have you successfully
navigated the intricacies ofcannabis regulations?
If all these boxes are tickedand your business is
consistently profitable, thenyou may be ready to contemplate
expansion.
Secondly, formulate a clearstrategic plan for scaling.
This plan should detail how thebusiness will manage increased

(17:28):
demand, the necessary resourcesand how these will be procured.
Additionally, it shouldincorporate contingency
strategies for potentialchallenges or setbacks.
Absent such a plan, scalingattempts can swiftly devolve
into disarray and becomeunmanageable.
Thirdly, exercise financialprudence.
While scaling necessitatespouring more money into your
business, reckless spendingshould be avoided.
Maintain a clear picture ofyour business's financial health

(17:49):
, encompassing cash flow, profitmargins and debt levels.
This financial prudence cansteer your scaling efforts and
help ensure that growth doesn'tpush your business into
precarious financial territory.
Fourthly, prioritize staffdevelopment.
As your business scales, yourteam will also need to expand
and adapt.
Offering existing staffdevelopment opportunities and
training them for higher leveltasks can prevent premature over
hiring.

(18:09):
Moreover, preserving a strongcompany culture can aid in
attracting and retaining talentas your business expands.
Finally, regularly assess yourprogress and be prepared to
modify your strategy as required.
This could involve deceleratinggrowth if challenges emerge or
accelerating expansion ifopportunities arise.
Barrier to profitability.
Number seven is C-suite, full ofyes men.
Within the sphere of thecannabis industry, a notable

(18:30):
trait is the potent presence ofego that frequently pervades the
business climate.
This can often engender anenvironment where differing
voices are quashed and leadersshy away from the term no.
This results in a relentlessecho of agreement, where
critique is rarely voiced,leading to a singular viewpoint.
This vessel, steered by anamplified ego and manned by yes
men, may seem to be sailingthrough tranquil waters, yet
it's truly plotting a pathtowards calamity.

(18:51):
In the universe of commerce,especially in one as
unpredictable as the cannabisindustry, it's essential to
incorporate a diverse mix ofopinions and perspectives.
Decisions must not be takenrashly or casually, nor should
they be so mired in bureaucracythat the firm loses its stride.
Instead, a judicious dose ofcritical thinking is crucial for
wise decision making.
Though the speed of thecannabis industry might feel

(19:11):
overwhelming, and the fear ofmissing out can exacerbate the
strain, it's important to keepin mind that all opportunities
are not created equal.
Certain prospects should indeedbe met with a robust and
resounding no.
By acknowledging this fact,companies can make better
informed decisions that bolstertheir long-term viability.
Now let's delve into tenstrategies for improved decision
making within cannabisbusinesses.
These strategies, clear andefficient, are ready for

(19:33):
implementation and canmetamorphose a group of yes men
into a battalion of criticalthinkers.
This forward thinking approachcan ensure your business
sidesteps common decision makingmissteps and nurtures an
environment that genuinelypropagates growth and victory.
Strategy 1.
Foster an environment oftransparency.
Motivate team members to voicetheir opinions candidly, even if
they deviate from theconventional view.

(19:53):
This nurtures intellectualdiversity and aids in preventing
decision making from becominglopsided.
Strategy 2.
Champion critical thinking.
Offer training and resourcesthat aid employees in honing
their critical thinkingabilities.
This empowers them to questionthe norm and contribute more
effectively to decision making.
Strategy 3.
Endorse dissent.
Constructive discord can serveas a valuable tool in decision

(20:13):
making.
Ensure that employees feel atease expressing opposing views
and that these perspectives aregiven due consideration.
Strategy 4.
Institute clear decision makingprocedures.
Having well-defined processesin place can help deter
impulsive decisions.
These methods should advocatethorough deliberation and
discussion of all viable optionsbefore a decision is finalized.
Strategy 5.
Utilize external advisors.

(20:34):
Involving third-party advisorswho can offer an outside
perspective can prove beneficial.
They are likely to be lessswayed by internal dynamics and
can deliver unbiased advice.
Strategy 6.
Conduct regular reviews.
Frequently evaluate yourdecision making processes to
ensure they remain effective andsuitable for your enterprise.
This allows you to makenecessary adjustments to avoid
the yes men syndrome.
Strategy 7.

(20:54):
Embrace failure.
Recognize that not alldecisions will culminate in
success, and that's perfectlyfine.
By treating failures aslearning opportunities, you can
foster a culture that's unafraidto take risks and say no when
required.
Strategy 8.
Offer leadership training.
Train leaders to value and seekdiffering opinions.
This encompasses learning tocontrol their ego, listening
actively and respecting allviewpoints.
Reward constructive dissent.

(21:15):
Acknowledge and rewardemployees who exhibit the
bravery to voice dissentingopinions.
This will inspire moreemployees to follow suit,
fostering a culture of criticalthinking and open communication.
Barrier to profitability Number8.
Is accepting good enough.
Every cannabis business isvying for a leading role,
contending fiercely to claim thetop spot.
Within this heated rivalry,there's no room for second best
or the complacency of goodenough.

(21:36):
Regrettably, due to therelentless pressures and
challenges endemic to thisever-evolving industry, many
enterprises find themselvesresorting to this good enough
standard, sometimes from theirvery inception.
Often, they're oblivious to theconcessions they're making,
which soon reveal themselvesunmistakably.
Branding that merely qualifiesas good enough inevitably fades
in the bright light of truebrilliance.
Employee training that simplysatisfactory fails to garner the

(21:58):
glowing reviews that arereserved for businesses
advocating nothing short ofexcellence, operational
practices that are tolerable butfar from efficient flounder
against organizations that havedeftly struck the balance of
time and cost efficiencies.
In essence, good enough issimply not enough.
In the fast-paced sprint to thepinnacle of the cannabis
industry, excellence is the goldstandard, a guiding principle
that far too few businessesgrasp in its entirety.

(22:20):
Aiming for excellence, whileundeniably demanding, is far
from unachievable.
It's an unending journey,demanding relentless dedication
to improvement, perpetual hungerfor growth and an insatiable
thirst for superior quality.
Of course, there will beinstances when excellence
appears distant.
However, striving for thezenith will invariably yield
superior outcomes than settlingfor good enough.
For cannabis entrepreneurs,fostering a culture of

(22:42):
excellence within yourorganization is paramount.
This entails setting loftystandards, devising
comprehensive traininginitiatives and promoting
perpetual learning andadvancement.
Investments in sturdyoperational procedures and
top-tier branding strategiesshould be non-negotiable.
Cultivating an open, welcomingspace that promotes feedback,
innovation and critical thinkingcan yield tremendous benefits.
It's worth bearing in mindbeing nearly excellent always,

(23:04):
trump's being good enough,persistently push boundaries,
challenge conventions and raisestandards.
In this exciting and burgeoningcannabis industry, excellence
isn't just an ambition.
It's an essential prerequisitefor those truly aspiring to
distinguish themselves.
Here are three fundamentalstrategies to ensure excellence
is a cornerstone of yourcannabis venture.
Firstly, define excellence.
For cannabis enterprises, it'scrucial to delineate what

(23:25):
excellence encapsulates withinthe framework of your
organization.
This involves formulating clear, measurable key performance
indicators KPIs that embody thisvision.
These KPIs can span a varietyof business aspects, from
product quality and customerservice to internal operations
and market performance.
By diligently tracking theseindicators, businesses can
ensure they're navigatingtowards excellence and promptly

(23:46):
pinpoint areas requiringimprovement.
Secondly, cultivate a cultureof excellence.
Promoting a mindset ofexcellence at every
organizational echelon is key totranscending good enough.
This involves nurturing aculture where each team member,
from top tier executives tofrontline staff, is committed to
realizing and upholdingsuperior standards.
Regular training andeducational initiatives can help
instill this culture, elevatingthe competencies of the

(24:08):
workforce and equipping themwith the tools to excel in their
roles.
Recognizing achievements,rewarding outstanding
performance and providingconstructive feedback are
further steps that reinforce thecommitment to excellence
Internally.
Understand the Marketplace.
Comprehending your competitivelandscape is crucial to the
pursuit of excellence.
Striving for elevated standardsinternally is one thing, but
your notion of excellence mustsurpass that of your rivals.

(24:30):
To achieve this, businessesmust maintain a keen
understanding of market trends,industry benchmarks, customer
expectations and competitors'offerings.
This insight can then guide therefinement of standard
operating procedures, productdevelopment and marketing
tactics, ensuring yourenterprise's standard of
excellence is genuinelyunrivaled.
Similar to profitability, numbernine is internal communication.
In the intricate world ofbusiness, including the vibrant

(24:52):
cannabis industry, the potencyof proficient internal
communication is frequentlyoverlooked.
However, articulate and regularinternal discourse plays an
instrumental role in a cannabisenterprise's overall success.
Armed with pertinentinformation, each member of the
team can contributesubstantially to the
organization's growth andprofitability.
Conversely, deficient internalcommunication can leave
employees feeling perplexed anduncertain, potentially

(25:15):
undermining productivity andmorale.
Statistics underline this point.
A Siemens survey suggests thatenterprises boasting effective
communication practices arelikely to witness 47% higher
returns for shareholders.
Meanwhile, according to theSociety for Human Resource
Management, misscommunicationcan cost companies with a
workforce of 100 employees anaverage of $420,000 annually.

(25:35):
For cannabis businesses, thisnot only represents a
substantial financial risk but,more critically, a significant
lost opportunity for expansion.
So how can cannabis venturessidestep the pitfall of subpar
internal communication?
Here are five strategies toaugment internal communications
within a cannabis organization.
First, establish opencommunication channels.
Advocate for an open dialogueacross all echelons.

(25:56):
Transparency and opennessnurture trust and enable more
effective problem resolution.
Second, provide regular updates.
Schedule consistent meetings orupdates where the leadership
team can engage with all staffmembers.
This ensures everyone remainsinformed and enables effective
communication about any shiftsin the company's direction or
focus.
Third, harness the power oftechnology.
Make use of collaboration toolsand platforms that streamline

(26:20):
communication.
Platforms like Slack orMicrosoft Teams can help
maintain connectivity and keepeveryone apprised.
Fourth, conduct training.
Offer communication skillstraining to all personnel.
Effective communication is askill that can be acquired and
honed.
Fifth, institute feedbackmechanisms.
Foster a culture thatencourages feedback.
This can help pinpoint anyconcerns or misconceptions,

(26:40):
allowing them to be promptlyrectified.
By embracing these measures,cannabis businesses can markedly
enhance their internalcommunication, effectively
reducing ambiguity and elevatingcompany-wide productivity and
profitability.
Barrier to profitability number10 is sales mindset deficiency.
Just like any business arena,the cannabis industry thrives on
sales.
Yet an unexpected trendpersists across numerous

(27:02):
cannabis businesses andinadequate emphasis on sales
techniques.
Barring mere cost reductionstrategies, there's a pronounced
focus on revenue, but theparadox lies in the absence of
an efficient sales strategy,which unfortunately becomes an
obstacle to attaining lastingprofitability.
Studies suggest that businessesacross all sectors, including
cannabis, that downplay thesignificance of proper sales
training and strategies oftengrapple with profitability

(27:24):
issues.
As per the Harvard BusinessReview, a mere 5% enhancement in
customer retention rates canescalate profits by 25% to 95%.
However, many cannabisbusinesses, particularly
dispensaries, frequently ignorethe value of effective sales
tactics such as building rapport, product upselling and customer
retention, which significantlyimpact their financial results.

(27:44):
On the cultivation andproduction front as well, the
disregard for sales training iswidespread.
Sales force research indicatesthat companies with thorough
training programs generate 218%higher revenue per employee.
Yet, despite this evidence,several cannabis businesses fail
to adequately equip their salesteams with the necessary skills
to foster relationships andboost sales.
Furthermore, businesses oftenevade sales incentive programs,

(28:06):
presuming them to be expensive.
However, a survey by Incentiusreveals that well-conceived
incentive programs can amplifyoverall sales productivity by
30% to 44%, underscoring theprospect for substantial
financial gains.
So what's the antidote to theseprevalent blunders?
Firstly, businesses need toinvest in sales training.
Both dispensaries andcultivators must allocate

(28:26):
resources towards comprehensivesales training.
This might involve bringing inexternal sales trainers or
creating an internal programthat arms employees with
effective techniques for rapportbuilding, upselling and
customer retention.
Secondly, businesses shouldleverage data.
It's important to utilize datato comprehend customer behavior.
Incorporating customerrelationship management CRM
tools can shed light on buyingpatterns and preferences,

(28:48):
enabling the sales team totailor their approach.
Finally, companies should thinkabout introducing
performance-based incentives.
This doesn't have to beexpensive.
Even minor rewards forachieving targets can motivate
employees and spur productivity.
Moreover, it's vital toconsistently review and adjust
the program to ensure it stayseffective and beneficial for the
staff.
In the quest for profitability,a comprehensive sales strategy
is vital.

(29:08):
By adopting this, cannabisbusinesses can escalate their
revenue and strengthen theirposition in this rapidly
expanding industry.
As we wrap up this podcastepisode, it's vital to highlight
the multi-layered process ofbuilding a prosperous and
financially successful cannabisbusiness.
The initial strides towardsprofitability lie primarily in
mastering the details, managingtaxes, maneuvering through
regulatory intricacies andkeeping a firm grip on overhead

(29:31):
costs.
Picture constructing a building.
These aspects are like therobust, steady foundation
necessary to support thesubsequent structure.
But once that foundation isestablished, the real challenge
of distinguishing your cannabisventure in this highly
competitive market begins.
That's when branding, marketingand service quality come to the
forefront.
These aren't mere extras orlast-minute considerations.
They are the core componentsthat will propel your revenue,

(29:53):
giving your business that uniqueedge to stand out, attract and
secure a loyal customer base byattentively focusing on these
two wide-ranging areas thetechnical bedrock and the growth
driven by your brand, yourcannabis venture can rise above
the average and join theexclusive club of the 24% of
cannabis businesses that hitprofitability.
Keep in mind, this isn't a shortrate.
It's more of a marathon,calling for tenacity,

(30:15):
adaptability and a sharpcomprehension of the market and
your consumers.
It's indeed a journey, but restassured, with the right
strategic planning and execution, it's definitely a feasible
destination.
This podcast is brought to youby Can Strategy, a cannabis
business strategy firm dedicatedto assisting cannabis business
owners, both existing andaspiring, in creating successful
ventures.

(30:35):
We're here to help you build awinner.
Tune in to our next episode formore insightful discussions.
Until then, stay innovative,stay focused and stay profitable
.