For just over a year, I’ve been networking and growing a marketing practice that focuses on the legal cannabis industry and I’ve noticed something big that’s missing. Many of the speakers or topics at cannabis-related events are skipping a huge step when they give advice about starting a cannabis business: the concept statement. Sure, you can learn about testing, lighting or social media marketing, but no one is really identifying the first basic steps toward being part of the new green rush. Perhaps it’s that it all seems a little bit “Marketing 101” for an industry that’s long relied on its underground cache to make it thrive, but those days are (thankfully) over.
The first question to answer if you cultivate or you white-label your brand and the first question a potential investor or partner will ask is: Why would someone choose my flower/concentrate/edible over another in a dispensary or delivery environment? That question is, of course, easier asked than answered.
To define your businesses core differentiators, many marketing consultants, and even some team members, may tell you that a concept statement is simply the executive summary of your overall business plan and that the statement will shape itself only after you dive headlong into a larger, and typically expensive, strategy session.
Before committing to a larger marketing investment, consider that Wharton management professor Ian MacMillan, (knowledge @wharton podcast) is among those who believe the concept statement alone is the most important place for any new business to start: “You might get word back from the various stakeholders — like potential customers or distributors — that this really wasn’t such a good idea after all. That saves you the energy and effort of putting together a big business plan.”
This saves you money in case you have to pivot and change from your original model.
Here is what your concept statement should include:
- The market need that you are actually meeting. Again, this should be what makes you unique or different from others in the marketplace.
- What your product descriptions are and how they fit that need.
- What the resources are that you need to get the business going.
- Your risks and your own risk tolerance.
- A quick and concise budget/ask/profitability point.
Take some time and really think through each of these areas. Once you have this completed, share this with everyone that you trust in the cannabis space (with a signed non-disclosure agreement, of course) including any potential customers and investors that can provide honest and measured feedback. Sometimes what you hear may sound negative, but still … listen. Hear it. Maybe you have to pivot or maybe you have to exit altogether.
For a legal cannabis industry that is really just establishing itself and sorting out the players that have staying power, there aren’t too many useable examples of rock-solid concept statements. An organization that stands out with its marketing and sophistication, however, is MedMen Enterprises, which markets itself as the largest U.S. cannabis company. MedMen’s simple, right to the point value proposition is spelled out for the investment community (and the general public) on its website. Whether or not you support MedMen’s business model and practices, the company has captured precisely what it wants to be known for (upscale, consumer cannabis) and how it plans to reach its audience (with prime real estate and sophisticated operations in the fastest growing markets). This messaging may not jive with the traditional handshake/word-of-mouth culture of cannabis, but it’s what investors are accustomed to hearing and what will be necessary for new companies to establish themselves.
Regardless, be careful where you spend your valuable dollars when starting out. Some in this space will tell you what you need to hear and sell you something — anything. Instead, look before you leap, take a methodical and balanced approach and, over time, know that there are plenty of affordable and useful resources available to make your business dreams a reality.