From start-up companies to big investors, there are things you need to know about this “budding” industry. It’s hard to get the metrics for funding and it’s difficult to grow and expand a business without available reports and statistics to help brand and market your product. Maybe this article will help.
A Short History of Legalized Cannabis in the United States
In 2012, legal medicinal cannabis was finally realized and it should be one step closer to mainstream in 2018 as adults in California, Massachusetts, and Maine marketplaces pick up the pace for normalization of recreational use in America.
More medical marijuana is sold in California than anywhere else in the United States and the addition of legal recreational use is expected to grow the state’s already exploding market to $7 billion a year, according to the Associated Press. They are followed by continually increasing consumer markets in both Colorado and Washington, according to a report from Boulder-based BDS Analytics.
Recreational customers in both Washington state and Colorado increased cannabis product spending a combined 66% since 2015 to reach over $1.5 billion in 2016, and early projections showed yet another huge increase for 2017.
Aside from revenue, legal cannabis will also bring millions of dollars in investments and thousands of new jobs to these states. More than 10,000 people have already been employed in Washington’s legal cannabis economy. [1]
Marketing and Advertising Technology Is Critical to Business
Unlike traditional businesses, legal cannabis faces a unique dilemma. In the last few years, entrepreneurs, executives, and investors had almost no solid information to base business decisions on and had to rely mostly on instinct. “They didn’t have the types of financial information, benchmark data and in-depth market insight necessary to assess the competition, target investments and tackle new opportunities.” [2] But now it’s possible to hire the right marketing and advertising expert to find and filter this data and design, brand, and provide content that is compliant.
This gets around the following issues:
- The federal government currently doesn’t track the industry and detailed demographic information on jobs, the number of companies or taxes paid is not readily available.
- Each state approaches the cannabis industry differently. Some provide in-depth data; tax revenue generated, the names of licensed companies, and monthly or annual retail sales, but most states don’t.
- Entrepreneurs and investors usually find information on their markets by searching for filings and financial statements of publicly-traded companies. The cannabis industry reports that are publicly available are generally unaudited and only represent a small portion of the marketplace.
- Medical dispensaries are required to operate as non-profit, but their tax returns are not formally recognized by the IRS and are not publicly available.
The Marijuana Business Daily Factbook 2017 conducted a survey showing “investors who have already pumped money into the cannabis industry are planning on putting capital into nearly as many marijuana businesses in 2017 as they have in all previous years combined,” and “investors plan to invest half a million dollars on average in marijuana businesses this year alone.”
A huge number of new businesses entering the cannabis space has raised the level of competition and start-up costs are rising making it even more important to know how to approach the industry, a specific niche or market segment.
Enter Tetrah Marketing
Despite challenges, the industry still requires many of the same goods and services as mainstream companies. A huge number of secondary companies – businesses like Tetra Marketing – have sprung up offering traditional services in line with federal and government regulations and guidelines. Some cater to the cannabis industry exclusively; some serve multiple markets. Tetrah has a separate company for its traditional customers that has served many businesses in both the private and public sectors, including government and military contracts, since 2010. They have access to in-depth information that some of their competitors don’t which gives their clients an edge in their marketplaces.
If you are one of the forward-thinking owners of a cannabis start-up or are an existing company looking to differentiate yourself as you expand locally or across state borders, you will need to navigate an industry that has complex rules to marketing and advertising as well as marketplace data that is hard to find. Investors want to back initiatives using solid financial numbers and information along with an analysis of existing competitors. An analysis of the competition is just one of Tetrah Marketing’s vast array of services for a non-traditional industry; a one-stop shop for all things marketing in the world of marijuana.
Web Design- Branding
- SEO
- Content Marketing
- Print Collateral
- Compliance
- Workforce Management
- Insurance
If you are serious about your cannabis business or just want to say hello and ask some questions, fill out a service questionnaire, call Don Klos at 704-491-9504, or email at him at hello@tetrahmarketing.com.
[1] Black, L., 2017. Next Year Will Be Huge for Legal Weed, http://www.thestranger.com/weed/2017/10/11/25458111/next-year-will-be-huge-for-legal-weed?utm_content=buffer9d111&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer
[2] Marijuana Business Factbook 2017: Executive Summary © Copyright 2017, Marijuana Business Daily, a division of Anne Holland Ventures Inc. Marijuana Business Daily, https://mjbizdaily.com/wp-content/uploads/2017/05/Factbook2017ExecutiveSummary.pdf
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