So you think you want to start a cannabis business? At the Chicago Cannabis Conference last week, Troy Dayton, CEO of The ArcView Group, gave a detailed overview of the cannabis industry and then he asked four industry veterans to share their knowledge and experience.
Khurshid Khoja, Principal at Greenbridge Corporate Counsel; Howard Schecter, an accredited investor; Dooma Wendschuh, CEO and co-founder of Ebbu, an artisanal cannabis extraction company; and Jason Levin, CEO and co-founder of UpToke, a company that produces innovative portable vaporizers, offered the following insights for cannabis business neophytes.
1. Due Diligence
“You want to know very well, very clearly, what the ownership rules are in a given state where you are going to be involved.”
Khurshid Khoja is Principal at Greenbridge Corporate Counsel, a business law firm that makes “premium legal services accessible to start-ups and established companies working toward environmentally conscious and politically progressive goals.”
2. New Business Model
“It doesn’t happen very often that regulatory issues create new business models. It’s usually new business models are created and regulation follows; this is the exact opposite. When it happens, if you see it and you can be apart of it, it’s an incredible opportunity so my nugget to you is: the regulation is changing, the business model is here, the longer you wait the less likely you will be to be one of the ones who can be really prosperous.”
Howard Schecter is an accredited investor, member of The ArcView Group and former attorney. He opened the first large investment and insurance business with one of the largest accounting firms in Georgia. At the age of 35, Schecter was bought out by the firm after two years in business, which allowed him to stop working for a year and a half.
3. Solve a Problem
“For a business to be a good investment, it still needs to solve a problem that needs to be solved. Anyone who is going out there trying to start a dispensary or trying to start a grow; I got news for you, that problem has been solved already. You need to innovate. You need to contribute. You need to think of something new and bring that into this industry.”
Dooma Wendschuh is CEO and co-founder of Ebbu, an artisanal cannabis extraction company. Wendschuh was also co-founder of sekretagent Productions, a company that creates and produces video games, motion pictures and advertising.
4. Startup Funding is Hard Work
“Persistence definitely pays off, but raising money for your startup is one of the hardest things that you will do. Do not underestimate that.”