Embarking on any new business venture presents a multitude of challenges, from securing funding to choosing the optimal location. For those looking to enter California’s booming cannabis industry, early attention to possible hurdles can improve your odds of success.
Here are two often overlooked issues that need your attention early in the planning stages of your cannabis enterprise.
Securing financial services
Since cannabis remains illegal under federal law, business owners can have problems getting essential financial services. Even securing a business bank account can prove frustrating. Addressing this challenge proactively, ideally before commencing operations, is crucial.
The California Department of Cannabis Control (DCC) keeps detailed records of licensed cannabis businesses. Permitting the DCC to share your business information with financial institutions might help with financial services.
Weighing different business structures
Do you automatically assume you should form a limited liability company (LLC)? Most new entrepreneurs make the same assumption. While an LLC offers personal asset protection and other benefits, do not dismiss other possibilities without consideration.
For example, corporations and partnerships offer asset protection similar to an LLC, in addition to potential tax benefits. Carefully weigh the pros and cons of each option to find the one that matches your goals.
Building a marketing strategy
Due to federal and state regulations, traditional advertising methods like television and radio ads are restricted or unavailable to cannabis businesses. Therefore, developing a strong brand identity and creative marketing strategies is critical for reaching your target audience.
You may advertise and market your marijuana operation in California, even in broadcast form, but you must comply with strict regulations.
Of course, these are just a few considerations as you plan your company and prepare to begin operations. Legal guidance can help with these and other hurdles you may face as a cannabis business owner.