Top 5 Reasons Why Cannabis Companies Fail to Start

failure or success business concept

Top 5 Reasons Why Cannabis Companies Fail To Start

Here are your top 5 reasons why cannabis companies fail to start. At Renaissance Consulting, we provide you with the most qualified cannabis consulting personnel in the industry. Contact us today for a free quote or call 303-991-8154.

Cannabis Consulting plan

1.) Underestimating State And Local Regulations

They underestimate the time and effort needed to navigate the state and local regulations for obtaining a license and operational permit. Remember, the state has its requirements, and the local jurisdiction is allowed to set its own as well. You should be working to fulfill the obligations needed for state and local in tandem. This can be accomplished by having a cannabis specific technical writer on your team. Also, a local point of contact on your board to help network and make connections that will make obtaining your local approval easier.

2.) Securing Real Estate (YT Raising Capital)

They overlook the importance of actually securing the real estate. Most states will allow for three different types of methods to prove you have access to the real estate once you’ve been granted the license to operate:

  • 1) A purchase contract
  • 2) An executed lease
  • 3) An option in writing to purchase or lease the property once you’ve won the license.

You want to avoid a situation where you’ve been awarded the license that is tied to the property you submitted information for on the application. Now the landlord can being negotiations with a captive audience.

cannabis real estate

3.) Getting The Appropriate Inspectors Involved Upfront

They don’t get the proper inspectors involved in the beginning stages of the construction process. When you do this, you run the risk of hurting what can sometimes be frail egos within the building, fire, water, and engineering. Also, Other departments that want to be included and feel like they are being respected during the construction planning phase. Make friends with these people. Keep them informed and listen to their input. Make them feel like they are a part of your team.

4.) Make Sure It’s a Real Offer From Your Investors

Open-ended offers from investors that are too vague and don’t explicitly spell out funding deadlines and a clearly defined process for the allocation of funds. Investors and investment groups need time and space to arrange for funding. You can’t get money overnight unless you’re willing to pay expensive fees.

cannabis investor

5.) Negotiate Favorable Contracts With Your Vendors

They haven’t reached out to or solidified relationships with all of the necessary vendors needed to adequately supply and open a cannabis company. There are too many vendors to list. This varies depending on if you are a cultivator, processor, retail or vertically integrated using all three parts of the supply chain. At the very least, you must have wholesale contracts negotiated, reviewed, and approved or your grand opening could be a disaster.

Cannabis Consulting YouTube Channel


– Call 303-991-8154 for a free quote –

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