Jim Marty, CPA, is the CEO and Founder of Bridge West LLC, one of the first accounting firms in the world to focus exclusively on the cannabis industry. Jim is a pioneer and a leader in the cannabis and hemp industries and is a nationally recognized and renowned expert on cannabis tax, accounting, and advisory issues. Jim and the Bridge West team have guided hundreds of cannabis businesses through complex tax and business challenges, and through this experience, he understands what can make or break a cannabis business’s success.
Starting a cannabis operation from the ground up requires sharp business and entrepreneurial skills and knowledge about the complexities of this ever-changing industry. We asked Jim to share a few best practice strategies and advice for cannabis startups, and here are his takeaways:
1. Assemble your cannabis advisory team.
Establishing an experienced cannabis advisory team is invaluable for new cannabis businesses. The right team of advisors will guide your business through inevitable startup challenges and help scale your business for profitable growth. Your advisory team should include:
- Application Expert
- Officers and Directors
2. Have your capital ready to deploy.
New cannabis businesses often face problems due to cash management issues. For new cannabis startups, it’s vital to raise enough capital to be competitive and grow your business. However, too much capital can stunt business growth. Consider the following questions:
- How much working capital will you need?
- When will you need it?
- What are your business’s budget and timeline?
3. Secure your real estate.
Determining where your business will operate is one of the earliest steps in a business plan. For every type of cannabis business, locating and securing the right property is no easy feat. To evaluate your property selection, consider the following:
- What are the local zoning laws in your desired location?
- Does your ideal property satisfy your state and local rules and regulations?
- Does renting or purchasing a property make the most sense for your business?
- Where is your competition located?
4. Know your regulations.
Cannabis entrepreneurs understand that this industry is filled with red tape. To remain in compliance, it’s critical for owners and operators to work alongside experienced advisors. To ensure the longevity of your business, it’s equally important to develop a keen understanding of the state and local laws, rules, and regulations that apply to your specific cannabis operation. Understanding the regulations that apply to you and adhering to your community’s standards will help you remain compliant and show that you are invested in the well-being of your neighbors. Engaging in conversations about cannabis regulations in your community can also significantly strengthening and boost your company’s brand. Where possible, take the time to get to know your local regulators by calling or visiting them. They want to support businesses that are built on effective and safe practices and entrepreneurs should welcome opportunities to introduce themselves and their businesses.
If you own a cannabis startup or are thinking about starting a cannabis business, we’d like to help. As a partnership of highly skilled and seasoned cannabis industry consultants and advisors, Bridge West Consulting is ready to guide you through this exciting and challenging landscape. Feel free to reach out to us anytime to schedule a consultation.