Setting a new path for market entry into the cannabis industry

Entry

Unlike many other growth industries, it is critical for cannabis firms to get out of the starting gates with a robust, professional foundation of operations and laser focus on growth. Whereas their tech counterparts have the luxury of multiple pivots and a business plan that can stumble upon success, cannabis firms must grab market share in a rapidly-saturating space, and build structures that defend against consolidation and regulatory challenges that may cripple unprepared businesses (such as quality compliance or FDA regulations on facilities and testing).

The entry phase establishes the foundation and structure of the company and answers the most fundamental set of questions around the direction of the business. It demands that cannabis firms:

• Strategically develop a technology-driven business model. (What powers our success?)
• Identify market points of entry. (Where are we best positioned to succeed?)
• Craft a go-to-market strategy. (How are we going to execute on position?)
• Formulate a product-launch and people-launch roadmap. (What and where are we going to create or sell?)

Firms also should identify and deploy technology pillars based on their own operational need, and develop professional, scalable, and compliant operational practices and structures. Given the scope of these initiatives, leading cannabis operators are leveraging 100-day plans, program management offices, and go-to-market teams prior to launch.

New technology for a new industry

New types of talent

Cannabis companies often struggle to recruit the right talent, in part because certain roles, such as retail sales associates, are new.

Budtenders and associates are pivotal in educating customers about products, brands, effects, and equipment. Their knowledge, however, is often limited. Walk into a recreational store, for instance, and you’re likely to find that “budtenders” are knowledgeable only about the products they have personally sampled, or provide a preference benchmark based on their own buying behavior.

It’s a deficiency that cannabis operators should be prepared to address. Brands must do a better job creating product information and training materials, as well as organizing sales enablement mechanisms that educate clients on product families and competitive positioning. For their part, retailers and dispensaries will need to create formal learning and loyalty programs and workshops for their employees.

To take part in this developing market, firms will need to build a platform of people, process, and technology excellence. A carefully executed entry stage that focuses on the complexities of cannabis will help establish a first-mover advantage.