Navigating the Challenges of the Booming Cannabis Industry
LOS ANGELES– As the stock market struggles, the cannabis industry is booming with higher than ever consumer demand. Industry leaders gathered at the recent Benzinga Cannabis Capital Conference in Miami to discuss strategies and insights for success.
To capture a variety of consumers, companies need to understand their audience and offer a diverse range of products and price points, according to Gary Santo, CEO of TILT Holdings. Focusing solely on “super-high end” or “ultra-premium” products is no longer enough to meet customer needs.
Tailoring products for different markets is crucial for long-term success, as noted by Brett Novey, CEO of Pharmacann. For example, allowed gummy potency varies in Colorado compared to Illinois, and companies must adapt to meet local regulations and preferences.
However, some industry veterans, like Kristi Palmer, co-founder of Kiva Confections, expressed concerns about the current barriers for new entrepreneurs entering the market. The industry has become increasingly competitive, making it challenging for newcomers to survive without substantial initial investments.
To succeed in cannabis, companies must not only focus on product development but also on business fundamentals, such as effectively deploying available capital and measuring success. Christine Smith, CEO and founder of Grön, emphasizes the importance of investing in a long-term plan to own a significant share of the market.
Innovation is key to differentiating oneself from well-established competitors. Newcomers must focus on unique products, strong brand identity, or exceptional customer service to foster customer loyalty.
Fostering customer loyalty is crucial, emphasizing smaller, frequent transactions, and implementing loyalty programs. However, Caroline Yeh, co-founder and CEO at TSUMo Snacks, warns that entrepreneurs must secure adequate capital, as starting a cannabis business in California with only $10,000 is no longer feasible.
As the cannabis industry continues to grow, conducting thorough market research, understanding industry intricacies, and developing long-term plans are essential for success. Despite the challenges, industry leaders remain optimistic about the future and believe that evolving with the market is key to lasting success.
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