01 Jun 8 Clichés That Will Help You Become a Successful Pot Entrepreneur
By Mark Goldfogel
So, you want to become a pot entrepreneur? You have been reading about the gold rush and you want to get in on the action.
Well, I have been on the ground floor of four start-up companies in the last five years, all of which were industry firsts, and all of which are still in existence — which in this industry is success.
So I believe I am an expert. And as an expert, my first piece of advice would be to go home and smoke a bowl, and forget about it.
But likely you wont listen to that advice, so allow me to share some clichés that I sometimes followed (and even when I didn’t, always wished I had). The thing about clichés is that they are dramatic oversimplifications, and they are almost always true.
- Keep your eye on the ball. Or as Olympic gold medalist Jonny Moseley once told me, “When skiing through the trees, keep your eye on the space between the trees and not the trees themselves.” This is an industry with more challenges than opportunities. Once you solve your banking problem, your bank closes your account. Once you have insurance, your insurance carrier drops you. Once you have purchased an expensive packaging machine, the packaging rules change and your investment is worthless. Success in the marijuana industry is staying alive and learning quickly from your mistakes. This is a nascent industry where even the most basic assumptions can prove erroneous overnight. Focusing on potential disasters will almost certainly bring them to fruition. The same can be said for focusing on success.
- You don’t know what you don’t know. There has never been an industry where learning from the veterans has been more important. I have seen billion dollar hedge funds stroll into this industry like they will own it in a year, only to be run out on a rail within three months after wasting hundreds of thousands of dollars on a dead-end streets. One year in this industry is like dog years. Just because you are an expert in your field, does not mean you understand this industry, and your hubris WILL be punished. Those who have survived a few years have learned how to adapt and read the tea leaves so they are prepared for the change that is coming, even if they don’t know what that change will be.
- Relax and enjoy the ride. You may think you want to build a marijuana grow only to find you really need to build a nutrient company. The problems in this industry are so vast, and so unpredictable, that being married to your idea often means you will soon be divorced, broke, and miserable. Being flexible is the only way to profit from an industry where the landscape can completely change without warning.
- Don’t smoke your own product. Because this industry is so full of firsts, it does not take much for success to go to your head. Sampling the product can also lend itself to delusions of invincibility. I have seen investment advisors with three months under the belt, close multi-million dollar reverse mergers and feel like they own the world, only to have the entire project collapse when one investor did not meet SEC scrutiny. A little humility will go a long way, because everyone in this industry has had some successes and some failures. There is a lot to be said from learning from your failures and soberly evaluating your successes.
- Cash flow is king. You can not go to a bank and get a line of credit when you find that you owe more taxes than you expected. Your father, college friend, and former client may give you money once, but they will soon stop taking your calls. If you do not have the cash flow to sustain your business, it will die, regardless of how bulletproof your idea is, or how much demand there is for your product. If you buy your apples for .50 cents and sell them for .40 cents, you will never be able to make up the difference in volume.
- Stick to your knitting. I have seen more companies fail because they set out to do one thing and then branched into so many tributaries that they forgot what their value was. This may sound like a contradiction to the flexibility clichés listed above, but it’s not. I am advising that you master the task at hand before you take on five more tasks. If that task is not solving the right problem, refine the task and master it before branching into a new direction. I have seen dispensaries grow into multi-store franchises before they learned how to make a customer happy. They then wake up one morning to realize they have eight stores and no happy customers.
- Birds of a feather flock together. Learn from the industry. This industry has enough room for everyone, and the ones that are doing it right and have faced many of the challenges that you will soon face. Associations, trade organizations, business to business conferences, and consultants are all invaluable resources to successful businesses in this industry. The businesses that are open to helping the industry thrive are the ones worth associating with. The ones that want to tie you up exclusively are the ones I tend to shy away from. If somebody wants to restrict your business to theirs, the odds are good they will restrict you in other ways down the road.
- Dot your i’s and cross your t’s. The difference between a legitimate marijuana business and a drug dealer is often their bookkeeping. Accurate records, adherence to the minutia of ever changing laws, and scrupulous attention to detail distinguishes which companies thrive, and potentially, who goes to jail. Making money is important, but nobody cares how much money you have made if you have broken the law in the process of building your business. This is an industry where your actions will be closely scrutinized. If you do not have a great attention to detail, I suggest finding a partner who does. It can make all the difference.
If this article has not scared you away from wanting to participate in this industry, I suggest you seek psychiatric care. But if you follow this advice, and don’t take yourself or your ideas too seriously, you have a chance to become the next great pot entrepreneur.
You may not be a millionaire overnight, but you will have taken part in history and you will have experiences that you will never forget. And, some of you might just make a few bucks along the way.
Mark Goldfogel is a founder of C4EverSystems, a cash handling kiosk guaranteed to meet banking compliance guidelines for cannabis transactions, and was a co-founder of MJ Freeway, the popular point of sale software for cannabis businesses, guaranteed to meet government compliance regulations for cannabis. He held management positions at ADP and John Deere. You can reach him at firstname.lastname@example.org
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