While there are many elements of the legalization of recreational cannabis that remain to be determined, the one thing that is clear is that the opportunities for entrepreneurs to enter the industry are plentiful. Starting a business can be simultaneously exciting and daunting. With the right strategy and team, entrepreneurs can successfully navigate the pitfalls they may face.
The success of every company is grounded in its initial stages. The following recommendations are intended to guide new company owners with structuring their innovative plans from the outset to start on the right path and sidestep (often avoidable and expensive) consequences in the future.
First, be sure to put together the right team and a develop business plan.
A common theme among my conversations with entrepreneurs that I spoke with as a panelist at the Women Grow Signature Networking Event on April 6, 2017 was that those who found success did so after finding the right management group to elevate their planning process to the next level. Bringing together people that work well as a team and that each bring unique skills to the table can help develop a smart business plan that distinguishes the product or service from the inevitable influx of new ideas on the market.
After figuring out the end goal, decide on the right corporate structure and seek the right support to help get there.
New ventures must rest on a sound legal foundation to maximize chances of profitability and protect themselves from the inevitable bumps in the road. This is where finding the right legal guidance is critical.
At times, the path to success can seem cluttered with regulatory and legal barricades that can disrupt even the most promising ideas. When a new company is excited about going to market, it may seem too time consuming, overwhelming and expensive to think about incorporation versus setting up a limited partnership, how to structure the much-needed loan, or drafting a shareholders’ agreement and putting together up a minute book. That is what your legal team is there for – to provide guidance and support from the beginning and to help spot the legal issues to guard against more costly mistakes down the road.
Your legal counsel should be there to advise you for the long haul and provide support, risk planning and provide the right products and services that are needed to get your innovative cannabis venture started on the right path and not simply to provide advice if plans go awry. Good counsel also will have an extensive network of industry and professional contacts to whom they can introduce you in order to further develop your business.
Investing in the right foundation is important, and not necessarily as expensive as one might think. Fixed-fee programs are often available to provide start-ups with all of the tools they need to get up and running.