Taking part in this year’s MJBizCon, I couldn’t help but be impressed by the sheer size and scope of the convention— every year it seems to double. It’s certainly the spot for industry players to connect under one roof. Deals are being made, new products are being unveiled, and industry leaders are deliberating on the next steps for their markets. Back at our offices, with a bit of time to reflect on all the event activity, one clear theme emerged: Size doesn’t matter in the cannabis business; it’s essentially all about execution. A company’s ability to execute its product, services and brand vision is now driving the market by every measure: market share, investment value, and consumer loyalty.
When the legal cannabis industry began, a company’s value was based almost purely on its growth potential. Cultivators were valued on capacity (square footage). Extractors set values on production capability. Now, companies must compete through superior execution. It’s no longer [just] about how big of an operation you have or how many licenses you own — it’s about how well you can execute. Executing your vision boils down to focusing on what you’re great at and then consistently delivering what that segment of the market wants.
Stay within your sweet spot
Are you good at a lot of things, or great at a few? Many cannabis companies have been attempting to be good at all aspects of the cannabis business supply chain — from seed to sale (complete vertical integration). This strategy will quickly leave you playing catch up with companies who’ve made the decision to focus and be great in one or two areas. The specialists can focus their resources, rise to the top of their respective fields, and drive sustainable competitive advantage. Specialists can succeed by responding, pivoting, and adapting when margins slim in an increasingly competitive landscape where more effective, efficient and targeted business processes are required to be a leader.
Become both a product and a market expert
Most business owners got into the industry because they have a passion and extensive product knowledge — both critical factors in the success of any start-up. But as the cannabis market gains sophistication and acceptance, the skillset of cannabis business owners and managers needs to expand. It is now necessary to become a market expert. The first step is identifying your company’s target market and understanding it. Then it is vital to continually and consistently deliver what your market wants.
Growth and expansion are obviously important to a cannabis company’s long-term success, but it’s even more important to be profitable. The key to profitability lies in implementing efficient and effective business processes and technologies that empower you to bring your vision to market, establishing your company as a segment leader — one that understands its marketspace and provides consumers (and investors) what they want with every transaction.