It is important to find out how the cannabis industry works from an entrepreneur's perspective before even considering starting a marijuana-based business. The Honest Marijuana Company, an environmentally conscious cannabis breed based in Colorado, is an industry leader and CFO Serge Chistov has a background in advising new entrants. He and Honest Marijuana revolutionized the industry with a purely organic approach to growing, producing, and packaging marijuana, using natural farming practices to create only the best environmentally conscious cannabis products.
The company developed environmentally conscious, recyclable tin cans that contain pure nitrogen to preserve the product in its purest form and provide the highest quality. And what is perhaps their most advanced innovation is their recently patented nanobidiol Technology. This invention enables the Honest Marijuana Company to shrink chemical compounds, such as cannabinoids, that are not water-soluble and are therefore not absorbed by the body at their normal size, to a nano-size. With this change, the cannabinoids can be added to cannabis products and consumed cleanly, discreetly and with maximum efficiency via transdermal patches, topical lotions and other cannabis products. Their latest innovations include plans for new machines to develop more products in the edible category that will make more use of their nanotechnology.
Serge has shared expert knowledge on cannabis topics ranging from funding to product development to the political environment and much more with many high profile publications. Home Business Magazine recently had the opportunity to discuss the current state of the cannabis industry with Serge. He debated whether it was a good time to invest and even gave helpful advice to budding cannabis entrepreneurs!
HBM: Is this a good time to invest in the cannabis industry?
SC: "Yes, indeed, but those who invest in cannabis must do so with a strong focus on the long-term view of space. Why? Because in the short term, the industry will continue to be hampered by regulatory challenges. Even so, it is a growth industry, even when it comes to legalization. The momentum is growing to improve the circumstances of marijuana legalization. While all 50 states have legalized cannabis or cannabis-derived products in some form, there still needs to be consistency and maybe even a federal overview to really get things moving in a higher gear. However, innovation and growth both domestically and internationally are on the rise, suggesting the marijuana industry is a good investment in the long run.
If you think about it, there is plenty of evidence that society is normalizing cannabis pretty quickly. In fact, this final election could be the tipping point where recreational marijuana like alcohol and cigarettes will become a normal part of society. While the latter two are legally available from state to state with similar regulations, many people see the benefits of cannabis as an effective way to manage stress, help them relax, and generally contribute to their overall wellbeing. Most people consider cannabis positive because of its medicinal properties in relieving stress or anxiety, or relieving pain or other illnesses.
One of the reasons cannabis is becoming mainstream is that there are new ways to consume it that are not inhaled. A clean, yet efficient delivery of the compounds leads to a greater impairment of the market. Now everything from foods and lotions that use nanotechnology for transdermal delivery is becoming more widely available. All of this happens at the same time as an increased negative reaction to smoking, which is always taboo due to the side effects of inhalation and the dangers of second-hand smoking. The non-inhaled options available for cannabis use are helping to drive normalization. "
HBM: What's your number one piece of advice for aspiring cannabis entrepreneurs?
SC: “Do your due diligence! A cannabis business is no different from any other business. You need to look at the entire industry and market, create a solid business plan, and leverage the right pricing structures. If you enter your numbers correctly and find the right opportunities, there are many opportunities for growth. The key is to keep your eyes open and look ahead to where the technology is going. The initial novelty around the word “cannabis” will wear off. In fact, I think normalization is already starting this process. Cannabis-based companies, like any other business, are just one company, so due care is vital.
Bottom line? My advice that would apply to any business is to crack the numbers left, right, and sideways. Keep counting before investing your money and make sure that you have a realistic exit strategy and that you are not using all of your capital. It can be easy to get caught up in the excitement of a new industry, but if you can keep your emotions in check then definitely invest! "
HBM: What are some of the challenges entrepreneurs should be aware of before getting into the cannabis industry?
SC: “The unpredictability of federal regulations is probably the main problem. There are many unknowns about banking and the IRS. How they view the industry and how they are willing to interact with it still varies widely in the face of the lack of federal legalization. On the manufacturing side in particular, there are discrepancies in the regulations from state to state, for example when it comes to compliance with packaging regulations. This legal framework needs to be strengthened in order to simplify the management of compliance. However, right now it can be quite frustrating. You think you've done all of your due diligence and finally got your product on the market, but then you need to revise the packaging because a new regulation is being introduced. Hopefully things will get more consistent as the industry continues to grow, but the lack of continuous consistency is definitely something to be aware of. "
Post industry expert Serge Chistov advises entrepreneurs on entering the cannabis room and first appeared in Home Business Magazine.