What Cannabis CEOs Need to Survive in 2022

Stay Compliant

There’s a lot of competition and uncertainty in the industry right now. Quite frankly, there’s no sure way to guarantee success in the cannabis industry. That said, unless you want your business to shut down prematurely, you must stay compliant.

The cannabis industry has far more compliance issues than any other industry. Therefore, in order to stay afloat, you must build a solid legal foundation. Staying compliant can limit or even prevent regulatory investigations and any ensuing legal disputes.

Currently, the cannabis industry is barred with costly lawsuits relating to ADA compliance, quality, advertising, packaging, and more. The best way to ensure that your cannabis business is fully compliant with local, state, and federal regulations is to develop a solid compliance and monitoring strategy, preferably with the help of a seasoned attorney.

With the right strategy and support plan, you can create a culture of compliance in your business. This way, no employee will take shortcuts or ignore protocol.

Diversification

In a typical business, diversification generally refers to allocating your capital to a range of investments to reduce risk. But since we’re talking about the cannabis industry, you’ll have to do things a little differently.

Instead of diversifying your investments, you can bring diversity into your business. This is achieved by diversifying your product offerings, partners, employees, and other team members. Research has proven that diversity in gender and race in the workplace correlates to higher levels of success, especially when implemented at the leadership levels.

Transparency

33% of consumers say they would purchase more from businesses where the CEOs are transparent. Cannabis businesses are subject to a higher rate of inspections and investigations. Therefore, due to the risks involved, even partners and potential investors will scrutinize your business more keenly before deciding to do business with you.

The best way to boost transparency in your cannabis business is by keeping detailed records. This way, you can protect your business from litigation. You will also be able to explain your past decisions with factual evidence and make accurate future projections using well-organized financial data. 

Adopt and Innovate

The psychology of disruptive events dictates that after a societal disruption or discontinuity, social marketers and policymakers come up with associated inventions that serve to make society better than before.

Looking back over the past two years, Covid-19 completely revolutionized how we do business. Before the pandemic, most cannabis sales were made in person, and businesses mostly relied on foot traffic to make profits. But now, there’s a new norm in town: online shopping.

That’s an example of an adaptation and innovation that allowed businesses to embrace the changing times by coming up with something new. Therefore, businesses that can adapt and innovate in the face of change stand a higher chance of not only surviving the ensuing turmoil but thriving in it.

Make Long-term Plans and Regular Adjustments

Let’s take the Covid-19 pandemic as an example. Although a majority of the population is already vaccinated and countries have returned to a state of normalcy, the economic effects of the rescission brought about by the pandemic could last years from now.

Similarly, there’s no way of telling what this year holds for us. Take the Russia-Ukrainian conflict, for example. Although it’s still unclear how it might affect the cannabis industry, it’s bound to affect economies worldwide.

Therefore, as you plan your budget, you should account for future difficulties. You should also get in touch with leaders and service providers when you anticipate a struggle in making payments. 

Many startups fail because they are reactive rather than proactive. When you implement a comprehensive strategy and update it regularly, you can better align your business’s budgetary decisions in a more streamlined and cost-effective fashion.

Participate in Changing Landscapes

Contrary to what some might believe, we aren’t powerless in the face of regulatory and legislative changes. Businesses can advocate for their interests. And the cannabis industry needs this more than ever before.

It’s only a matter of time before the federal government legalizes cannabis. You can participate in the legislative process and make your voice heard to encourage changes that allow our businesses to enjoy exponential growth.

Differentiate Your Brand

The future of any business in any market is solely dependent on its individuality and competitiveness. There’s already tons of competition in the cannabis industry, and there’s more to come. So, to set yourself apart, you need to convey how different your brand is.

To succeed in a highly competitive business environment, you have to portray the right picture to your potential customers. Take this, for example: Since you can’t make any medical claims on cannabis products, try introducing them as health enhancers. 

This way, you will avoid any possible litigation from the FDA. You’ll also attract new customers while you’re at it. You should, however, remember not to make any false claims about your business or product offerings. Doing that can get you in some serious legal trouble.

The Bottom Line

Despite being a relatively new industry, the cannabis industry is evolving at an alarming rate. And if you are not able to keep up, you might just wash out altogether. 

We managed to survive perhaps the toughest economic times in the past decade. Our innovative capability and adaptiveness allowed us to come out even stronger. Therefore, if you approach the coming times with the same tenacity, there’s no telling how much your business might thrive in the coming year.