4 essential elements to scale your cannabis business

Keeping up with growth is one of the biggest challenges entrepreneurs face

The cannabis industry continues to flourish and shows no signs of slowing down anytime soon, as it’s projected to be worth $66.3 billion by 2025, according to a recent report by Grand View Research. As a growing number of states continue to legalize the recreational use of cannabis products, the demand is growing day by day.

Cannabis businesses across the country are emerging and expanding to meet the growing demand. However, scaling these businesses isn’t as easy as it may seem at first. Here are four important aspects that help businesses scale in this ever-changing industry.

1. Reliable packaging vendors

One of the best ways to help your cannabis business scale is to take advantage of the many packaging opportunities out there. As more variations of cannabis products develop, so do the types of packaging and customization options.

In such a growing market, it’s crucial to differentiate your brand from the hundreds of competitors. Since packaging is largely the first and foremost feature your consumer will notice about your brand, it can pull a consumer in or push them away. By strategically choosing your packaging supply vendor, you can pull them in every time.

With the right vendor behind your business, you can get the packaging you need to properly secure and protect your products, while also helping you stand out. Creative packaging techniques are a great way to differentiate your brand. Consider incorporating recognizable packaging featuring a custom logo, colors and labeling that your customers will come to know and trust. A great packaging vendor can help you promote brand integrity, ensure consistent quality and freshness and align with the rules and regulations of the cannabis industry.

A good packaging vendor will also be able to help keep up with growing demands and provide you with flexible packaging as your business evolves. From high volume to unique, branded packaging designs, your vendor should be able to give you what you need to continue to consistently stand apart from the competition and satisfy your customers through a combination of user-friendliness and visual appeal.

2. An efficient supply chain

Without an effective supply chain, it’s impossible for a cannabis business to grow. Poor supply chain management can waste time and money. For example, if you choose to buy your packaging last minute, you’ll waste money in expedited shipping charges and labor while waiting around for packaging that could have arrived before your team needed it.

Technology can optimize your supply chain significantly. Certain solutions can help you track every step throughout the supply chain to guarantee your operations are all hitting the correct deadlines and regulations. A common and legally required technology for cannabis companies is seed-to-sale tracking solutions. Turnkey traceability software helps companies manage their plant inventory from the time a seed is planted to when the plant is sold, which is mandated by most states and differs from one locale to the next. Some software enables users to track products online and remotely, which maximizes convenience and transparency.

The right technology will help you reduce overall costs and assist with the optimization of inventory management to further increase profits. You’ll also want an inventory management system that helps maintain regulatory compliance, which many of today’s technology providers can help through consistent and accurate recording and reporting. A good system will be able to help you enforce inventory audits, count all physical inventory and report on a regular basis to keep your business compliant.

3. Hire motivated employees

A well-rounded and scalable cannabis company needs the best talent out there. This means employing passionate individuals at all levels of your operations. A motivated and knowledgeable team can scale a company significantly. From your sales team to your controller, every one of your employees should be all-in on your business.

Improper hiring will only cost you in the long run so be sure to craft a team that aligns with your company’s culture, mission and goals. In the end, employee retention will save you time and money, so you’ll want to hire a dedicated team that’s in it for the long haul.

Aspects of your business such as daily operations, advanced ordering and volume pricing discounts can become increasingly complex, so having the right team in place is imperative.  Moreover, many studies have demonstrated that the cost of losing an employee can make a large dent on an employer’s wallet. Adding up the costs involved with recruiting, training and onboarding, the cost of hiring a new employee versus retaining one is much higher. According to estimates from consultants at Deloitte, the cost of losing an employee can be 1.5-2 times the employee’s annual salary.

Hiring and delegating work to the appropriate staff can help ensure your business is set up to succeed without the kinds of oversights you might experience without a team of experts behind you. It should be every business owner’s goal to hire motivated experts in every department to create a well-rounded team and accommodate growth.

4. Stay up to date on regulations

Considering cannabis isn’t entirely legal throughout the United States at this point, it’s important to make sure you adhere to all federal and state regulations for cannabis products. Municipal and state legislation, even in locations where marijuana has been legalized, isn’t always clear and is subject to change. For example, packaging laws often change from state to state with only a short notice. If your operations aren’t up to date on regulations, you can get fined at the local and federal level and even lose your license.

As a result, you’ll want to keep an eye out for any changes made to local or national legislation. Because of the current impermanence of the marijuana business, business owners can’t effectively make any long-term decisions around growth with the current laws in place. Even if a deal or contract has been entered both knowingly and legally, it may be unenforceable. When it comes to navigating regulation based on cannabis legislation and statutes, it’s also difficult to locate knowledgeable and reliable legal counsel to represent entrepreneurs in this industry. However, remaining diligent and making sure that you stay on top of your company’s regulatory compliance will help you avoid potential issues as your business develops.

Additionally, understanding where the industry is headed, and the growing legalization of additional uses and products in the cannabis industry, can open up a great opportunity for scaling. Whether working with licensees in new states where cannabis is legal or expanding uses and products, the potential for growth is monumental if businesses stay ahead of legalization and policies.



Keeping all of these elements in mind, you can make sure your business is prepared to handle the road bumps and stay afloat in an industry that’s still difficult to navigate. If your team of motivated experts is ready to handle all the challenges you’re likely to face along the way, you’ll be able to be successful in a market that’s only going to become larger as time goes on.

With growth numbers challenging even the most established industries and the potential for expansion across states and countries, the potential for the cannabis industry is enormous. Being prepared to take this growth head-on is what will determine tomorrow’s successful businesses.


Alen Nguyen is the co-founder and CEO of MainStem, a Seattle-based company that is revolutionizing supply chain management in the cannabis industry by utilizing technology and efficient operations. Nguyen has a bachelor of science degree in electrical engineering from the University of Washington and a master of business administration from Embry-Riddle Aeronautical University. His graduate studies were focused on corporate strategy and entrepreneurship.


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