MJBizMag September 2022 - 35

STRATEGIES FOR
TOUGH TIMES
Leverage advantages to navigate recession,
small cannabis business owners advise
While merger and acquisition
activity in the cannabis industry
has slowed, small, vertically
integrated companies and
small chain stores are still
being gobbled up by large,
multistate operators. The trend
is concerning for some small
businesses, which can't leverage
the same economies of scale and
other advantages. But executives
at successful small and mediumsized
marijuana companies have
found ways to carve out their
own wins, such as:
* Weighing the benefits of
microbusiness or small
business permits compared to
traditional marijuana business
licenses. Savings on application
licensing fees can be
significant, but micro licenses
often have caps on the number
of plants grown, products
manufactured or square
footage allowed at retail.
* Partnering with other small
marijuana businesses or
stacking licenses to create
vertical integration in markets
where this is allowed.
* Applying for loans and grants in
states that offer them, as well
as tapping trade organizations
for advice.
* Communicating regularly with
front-line workers to find out
what consumers are looking
for. If customers are regularly
asking for products you don't
yet produce or carry, consider
introducing them to the lineup.
* Building contingency funds
into the budget. Marijuana
companies often need a
longer runway before opening
because of construction and
licensing delays. Make sure you
have enough cash to sustain
operations before money starts
flowing in.
By Omar Sacirbey
I
n the months before Ulysses
Youngblood opened the doors to
his dispensary, Major Bloom, in
August 2021, passersby in the lowerincome
neighborhood in Worcester,
Massachusetts, where the store is
located, would stop him in the street
and say, " I'm not paying
$20 for a pre-roll. "
" These are real people.
They're thinking about
their pocketbooks, "
Youngblood recalled. And
if Major Bloom didn't offer
quality products at low
prices, those people would
continue to patronize the
illicit market and his store
wouldn't survive.
But Youngblood's strategy
increased month over month, and he
believes there is enough business for
his company to thrive, not just survive.
" There is enough space for different
players, " Youngblood said. " We all have
our own niche. "
TRICKS OF THE TRADE
Smart pricing, product
variety and quality as well as
finding ways to distinguish
your operation are among
the keys to small-business
success.
Achieving those goals can
Hope Wiseman
focused on the most devoted flower
consumers, whom he tries to provide
nearly 20 popular and unique strains
at prices that can compete against the
illicit market.
" It's being very intentional about the
target market, and we consider our
target market legacy users. When we
have a really good, economical flower
menu, it draws in people who really
like weed, " Youngblood said. He added
that his store often has 10 flower strains
priced at $25-$30 per eighth-ounce,
while competitors might have only one
or two strains at that price. " We have
so many of those SKUs that people are
compelled to spend money with us. "
Although Youngblood received
the 12th and final license in
Worcester, located in what is arguably
Massachusetts' most saturated county
for marijuana retail, his sales have
be challenging in regulated
cannabis markets, where
small businesses compete
not only against the illicit
market but also marijuana
multistate operators (MSOs) that can
absorb losses for longer and leverage
economies of scale.
" It's tough to compete in a limitedlicense
market like Maryland, " said
Hope Wiseman, founder and CEO of
Mary & Main dispensary in Prince
Georges County, Maryland.
" There are vertically integrated
competitors who have the best
margins. They can capitalize on
economies of scale and having more
resources. A lot of MSOs can play loss
leader. They can do poorly or take
losses in Maryland but make up for it
in more active states. "
That's not to say that small business
owners should give up and shut down.
In the following pages, we share tips
and strategies that small-business
owners can use to reach profitability
and even prosperity.
mjbizdaily.com | September 2022 35
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MJBizMag September 2022

Table of Contents for the Digital Edition of MJBizMag September 2022

MJBizMag September 2022 - 1
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