Archives for October 2023 | My Green Network

Cannapreneur. It’s a word that’s new to most people’s vocabulary, but nothing new to those who are following their dreams in the cannabis industry. A play on cannabis and entrepreneurs, cannapreneurs are expected to blaze their own trails in a seemingly all new marketplace. One that not only differs from state to state but is riddled with rules and regulations to upkeep and maintain for optimal success.

So what exactly is the modern day definition of a cannapreneur and what are some best practices you can implement to be a successful entrepreneur in today’s cannabis market? Keep reading for our ultimate guide to starting your own edibles business in California or other consumables that are on trend now.

The Cannapreneur Meaning

To become a cannapreneur, first let’s get into the cannapreneur meaning. Cannapreneur is the combination of cannabis and entrepreneur; hence, it means a cannabis entrepreneur. Cannapreneurs are often creative, innovative, and pioneering in blazing the trail in an all new industry.

Some of the most popular products that cannapreneurs will often launch include –

Edibles – Edibles are popular among cannabis entrepreneurs for the practically never-ending possibilities you can create. In 2023, cannabis analytics data firm Headset published sales statistics showing that the creativity of edibles is winning amongst consumers. The category showed a 10% increase in total sales year-over-year.
Pre-rolls – Another quickly growing category for sales comes to us from pre-rolls, and infused pre-rolls. This category jumped 12% according to the headset data, and are innovating amongst themselves. With products like “hash holes” or pre-rolls filled with hash (like a donut, get it?).
Vape carts – Vape carts offer cannabis consumers discretion and potency from the practically odorless vapor it produces from the oil, with THC levels of up to 99%. Becoming especially popular are rosin vape carts, which offer consumers solventless oil to vaporize vs. oil made with the use of harmful solvents like ethanol, butane, or propane. Vape carts also steadily increase in sales, year to year, with a 5% increase in 2023, as discovered by the same Headset data.
Concentrates – Last but not least, cannapreneurs are also increasingly entering the concentrates space. This not only includes current cannabis entrepreneurs like cultivators, who now want to produce concentrates like solventless rosin, diamonds, etc. But also new cannabis entrepreneurs who are seeking to launch a brand in a category that tends to capture the highest price amongst consumers.

But it’s not just new entrepreneurs that can become cannapreneurs. It’s current entrepreneurs too. In fact, the cannabis industry is quite popular for mainstream crossovers. For instance, established food or snack brands may enter the cannabis industry with an infused version. Or, celebrities who are already well known might want to launch their own product with their name on it.

So, what are some of the best practices for cannapreneurs looking to break into the cannabis industry the most cost effectively and time effectively? Let’s get into those next!

Best Practices for Cannapreneurs

First and foremost, let’s get back to a couple words that help define cannapreneurs: innovative and creative. For most entrepreneurs, they’ll run through the checklist of what all business owners should do to start their own business. Buy equipment, find and hire the right team, source a location, etc.

But in cannabis, where things aren’t so traditional, cannapreneurs have a more difficult time getting traditional loans or financing, and here’s where getting creative and being innovative come in handy the most.

To be the most successful, cannapreneurs have to focus on what matters most in the industry –

Competitive edge
Product differentiation
Profit margins
Consumer education
Brand awareness

All with less capital raised than traditional businesses. What can help is navigating non-traditional ways of manufacturing. Rather than purchasing or leasing a building, equipment, and having to hire your own staff – shared manufacturing facilities, facilitated by California’s type-s licenses, can help.

In these facilities, like My Green Network in Santa Ana, you can take advantage of –

Shared cannabis kitchen space
White label cannabis opportunities
Private label cannabis opportunities

For shared cannabis kitchen space, you’ll own your own license and use the facility to manufacture the product on your own. With white label cannabis opportunities, you can select from a variety of white label cannabis products that MyGN produces and brand them as your own. For private label cannabis opportunities, you can craft your own unique product through research and development with the MyGN team to make it your own.

This market entry route allows cannabis entrereneurs to reduce their initial set up costs, appropriately supplement their branding and marketing budget for consumer exposure, and launch a quality product that can protect brand reputation and customer loyalty.

Even more, type-s facilities can help brands that are already licensed

My Green Network: The Hub for Cannapreneurs

My Green Network is a proud cannapreneur partner that helps cannabis entrepreneurs manufacture their dream product or brand more cost-effectively. Due to its type-s licensing, using MyGN’s shared manufacturing facility or white label cannabis services doesn’t just save you money but also time, expediting the lengthy and complex licensing process.

In California, with high taxes and high competition, cannapreneurs must be smart and strategic about their brand’s market launch. By using MyGN as a cannapreneur partner, you can lean on their in-house experts for –

Compliance and state regulations
Packaging and labeling
Branding and marketing support
Retailer outlets
State of the art facility and equipment

And so much more. Learn more about how MyGN supports cannabis entrepreneurs. Browse our cannapreneur services, schedule a tour of our facility, or a call with our team now.

Needless to say, California’s cannabis industry has been experiencing a significant boom since recreational legalization in 2018. Of course, that boom doesn’t come without its own bumps in the road. Due to its federal classification and infancy, cannabis is one of the most tumultuous industries, not just to thrive in but to survive in. A fact we all saw firsthand by the collapse of Herbl, just this year.

When one of the biggest California cannabis distribution companies goes down, what should current or future brands do or consider? Their own alternative routes to continually manufacturing products for California wholesale cannabis distribution to maintain continual profits.

To put your continual game plan into place, let’s further explore the hurdles faced by California cannabis distributors and learn how contract manufacturers or cannabis white label goods can help. Keep reading to learn more best practices on how to drive increased sales and succeed in this burgeoning industry.

The Top 5 Challenges Faced by Cannabis Distribution Companies in California

To know exactly what you’ll be dealing with California cannabis distribution, let’s cover the bad news before the good news. Here are the top 5 challenges faced by cannabis distribution companies in California.

#1 – Compliance

In every state, but especially in California, the regulatory landscape is ever-evolving. Every market has strict regulations in regards to the manufacturing, packaging, distribution, and sales of cannabis products due to the nature of their use and effects. Once licensed, every part of the process from “seed to sale” is subject to these regulations, and there are strict penalties for not remaining in compliance. Not only can violations negatively affect a brand’s reputation, but they can also come with monetary fines or punishments such as license suspension.

What are the simplest ways to address this challenge? Cannabis distribution companies will either invest in robust compliance management systems that help them adhere to state and local regulations in-house. Or, they’ll turn to outside manufacturing facilities that are experts in rules and regulations and stay up to date with the latest compliance measures across multiple product types and regions.

#2 – Taxes

If you’re already a player in the California market, you already know about the challenges that taxes pose for brands. California cannabis distribution is subject to hefty taxes on cannabis, which can significantly impact a distribution company’s profitability. Included in these taxes are –

Cultivation taxes
Excise taxes
Sales taxes

Which are all collected at various stages of the supply chain. These taxes can also lead to higher prices, making profits that much harder for companies to obtain. To help, California cannabis distribution companies may streamline operations and cut costs by using an existing facility with a California manufacturing license for production.

#3 – Banking access

Because cannabis remains illegal at the federal level in the United States, companies struggle with limited access to banking and financial services. Even more so, it is much more challenging to obtain funding through loans or other conventional means of raising capital. Many banks are hesitant to provide services to cannabis distribution companies due to the federal prohibition, forcing these businesses to operate primarily in cash.

To address this challenge, companies can seek out cannabis-friendly financial institutions that are willing to provide banking services. Additionally, they can explore alternative financial solutions, such as cryptocurrency or fintech platforms tailored to the cannabis industry.

#4 – Competition

Cannabis markets in any state are competitive, but even more so in California, with numerous distribution companies vying for a share of the market. This saturation can make it challenging for newcomers to gain a foothold and for existing businesses to maintain growth. What helps is to gain advantages against the competition through product offerings, branding, and customer service.

Many current California cannabis distribution companies now use California cannabis manufacturing facilities to produce their products, giving their team more time to leverage competitive advantages such as advertising and consumer education.

#5 – Quality Control

Ensuring the quality and safety of cannabis products is of paramount importance. Not just for consumer safety, but for compliance regulations, too. California mandates rigorous testing requirements for cannabis products, including testing for pesticides, contaminants, and potency. Failing these tests may result in financial loss and damage to a brand’s reputation if the products do end up on the shelves.

For new brands, to guarantee quality, it helps to use the services of a contract manufacturer or white-label cannabis producer. These facilities are well-versed in creating quality products within California’s strict regulations.

How to Overcome California Cannabis Distribution Challenges

Want even more tips on how to crack the California cannabis distribution code with success? Here are four key things to consider to overcome California cannabis distributor challenges.

Product Diversification

Cannabis distribution companies should diversify their product offerings to appeal to a broader customer base. This can include offering a wide range of cannabis edibles, concentrates, and wellness products. Using white-label and private-label cannabis manufacturers can help reduce the costs involved with manufacturing new products in categories you’re not an expert in.

Branding and Marketing

Effective branding and marketing are crucial for creating brand loyalty and driving sales, especially in a saturated market. By outsourcing your manufacturing to a contract manufacturer or white-label cannabis producer, you can devote more time to the branding and marketing side of things.

Distribution Efficiency

Efficient distribution is key to success in the cannabis industry. Companies should optimize their supply chain operations to reduce costs and delivery times. Implementing modern inventory management systems, route optimization software, and logistics solutions can streamline distribution processes. Again, working with contract manufacturers can also increase efficiency.

Customer Education

Educating consumers about cannabis products is essential, especially for those new to the industry. This also includes educating budtenders or retail store staff so they’re aware of your new product, its differentiation, and what it can do for consumers.

Since they’ll ultimately be the ones recommending it, offering educational resources and product guides can help customers make informed decisions and build trust in your brand.

The Final Word – California Wholesale Cannabis Distribution

Cannabis distribution companies in California face a unique set of challenges, from regulatory compliance to intense competition. However, by implementing best practices such as diversifying product offerings, focusing on branding and marketing, optimizing distribution efficiency, and staying compliant with regulations, these businesses can thrive in this rapidly evolving industry.

With careful planning and strategic execution, cannabis distribution companies can navigate the challenges and seize the opportunities that the California cannabis market offers. Having a state-of-the-art and premier cannabis manufacturing facility by your side can certainly help. Enter My Green Network into the conversation.

My Green Network has been supporting existing and emerging cannabis brands since 2021 with co-manufacturing and shared cannabis kitchen space. Learn more about our manufacturing capabilities, including solventless, by scheduling a tour of our facility or call with our team.

What is a Cannapreneur? Best Practices for Cannabis Entrepreneurs in 2023