Cannabis Business Leaders' Advice for Entrepreneurs and Investors

Daniel Banas  |

It’s no longer a secret that the cannabis industry is growing in a big way. In a remarkably short amount of time, cannabis has already been fully legalized in five states and legitimized in 20 other states and the District of Columbia for medicinal purposes, with legalization likely in many other states in the coming months and years. Today, cannabis is an industry with the potential for multiple billions of dollars in growth.

Of course, the key word is “potential.” There is still much uncertainty and risk within the field that’s kept it from realizing its role as a major economic force. So what needs to be done for cannabis to fulfill its potential to become the next major growth industry, and what do prospective entrepreneurs and investors need to know to thrive in the field today? To help answer those questions, we’ve compiled advice and insights from entrepreneurs and professionals in a variety of fields within the cannabis space.

Jamie Rosen, CEO at Dr. Dabber

What They Do: Dr. Dabber offers Vaporizer Pens and Vape Accessories.

"The best strategy for getting involved in the cannabis industry as an entrepreneur is to start by putting yourself in a position that allows for a great deal of learning in your preferred sector of the industry. If someone wanted to open a dispensary, for example, but had no knowledge of how to run one, they'd want to consider first obtaining an entry-level position at a well-run dispensary and then use their combination of knowledge and savings to start their own dispensary. Without a working knowledge of how occupants in the space operate, it can be extremely difficult to turn a profit and stay ahead of the curve."

Aaron Herzberg, Partner and General Counsel at CalCann Holdings

What They Do: CalCann Holdings, LLC is a holding company focused on building a premier portfolio of municipally licensed marijuana real estate opportunities in California.

"Entrepreneurs in the cannabis industry have a unique set of challenges and advantages that those in other industries do not have, and as a result, their strategies need to be altered. One of the most complicating factors of working in the cannabis industry is the shifting legislative framework that makes it exceedingly difficult for those in the space to obey state laws while also maintaining a profit. Those interested in succeeding in the space need to stay on top of the ever-changing state of cannabis law, both on federal and state-specific levels, so as to work within the confines of the law and move the industry forward."

Seth Yakatan, CEO at Kalytera

What They Do: Kalytera Therapeutics offers a portfolio of non-psychoactive cannabinoid and endocannabinoid-like medicines to address unmet market needs.

"In can be hard to keep track of the number of opportunities that the cannabis space affords entrepreneurs. Whether it's through medical research, consumption apparatuses, dispensary management, ancillary developments, or investment vehicles, anyone interested in the space can find an area that will work for them. My personal recommendation to aspiring entrepreneurs in the cannabis industry would be to focus on innovations and sectors that will be needed tomorrow, not today. The space is changing rapidly, and anyone focused on the types of products and services that will be wanted down the road (so long as that focus is supplemented by a strong work ethic and skilled team) will find success in their own way."

Kyle Sherman, CEO at Flowhub

What They Do: Flowhub offers software for cannabis growers to help manage their product.

“Similar to other industries, anyone hoping to be a successful entrepreneur in the cannabis space must be prepared to work hard, develop relationships with key influencers, practice ethical principles, and innovate new solutions to pre-existing problems. Most people interested in entrepreneurship are aware of the fact that they'll have to get creative, but they also need to watch out for shifting market structures and legal nets (especially in the cannabis industry, where everything revolves around what is now a Schedule 1 substance according to the Federal Government).

With all of this in mind, I find it worth noting that the cannabis space is full of interesting, kind-hearted, highly skilled people, and with all of the difficulties that come with working in the space, I wouldn't want to work in any other industry.”

Sasha Kadey, Chief Marketing Officer at VapeWorld

What They Do: VapeWorld sells vaporizers, parts, accessories, grinders and aromatic blends, among other products.

“Cannabis entrepreneurs need to understand the sensitivities of investors, lenders, and financial service providers. Their concerns are predictable, you need to be prepared to bend over backwards to assuage those concerns without being asked to, to exhibit your understanding of the underlying issues they may be concerned with, and to demonstrate your internal risk management abilities. Deal with them head on rather than trying to sidestep them.”

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

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