6 Strategies For Cannabis Entrepreneurs During COVID-19 Crisis
None of the people, industries, or nations expected a global pandemic situation like COVID-19. It shook and toppled the economies were deeply impacted, dwindling their sales and profits adversely. Some businesses managed to stand still while others lost their footings.
The cannabis industry, however, faced multiple consequences from supply chain eruption to shutting down small businesses. As the cannabis industry is comparatively new, there are no time-tested survival or exit strategies to look up to. Much of the economic decisions solely rest in the hands of entrepreneurs and businessmen.
So, devising proper strategies to handle the COVID-19 situation might need some perspective. Here is a comprehensive guideline that can help you in many ways.
1. Back Your Supply with Demand
Usually, there is always more demand in the cannabis industry than it can cope up with. The advent of COVID-19 sent a wave of a sudden increase in demand. Blame it on the requirement of other medical support or the rising cases of stress. Cannabis came out as a solution to many health problems, and people were in constant need to buy more. The increasing demand, however, was not backed by continual supply. As a result, there was a considerable gap in the demand-supply curve.
As a cannabis entrepreneur, there is plenty of opportunities for you to explore and take advantage of this situation. So, the first strategy for budding entrepreneurs is to broadly study the existing demand and supply in various parts of your area and distribute your resource to make maximum use of your current product. After a careful analysis of the trend, you may well be able to adjust your supply according to needs.
2. Invest in Cultivation Equipment
One of the primary reasons for the lag of the supply of cannabis and hash during this time was low production. A small workforce was primarily due to the unavailability of cultivation equipment that usually comes from foreign countries like China. The seizure of cross border movement and restricted import led to the problems of supply in internal resources, such as fertilizers and seeds. Entrepreneurs who keep their cultivation gear, and equipment in order will be well prepared to handle any adversity. This may also mean investing in such items on a priority basis.
3. Play Logistics Game Strong
Restricted movement disrupted supply chain management in the market. Even after the removal of such restrictions, there was a lack of manpower supply who could run down the business of logistics. Investing in proper allocation of resources, which means storing the finished product near the market and having your people take care of the supply, will not only bring down the cost of operation but also help keep supply stable.
4. Diversify Your Customer Channel
Places where cannabis businesses were shut down due to the imposition as a non-essential item, the entrepreneurs faced a lot of troubles. Any entrepreneur who knows how can channelize their supply to various places can alternate their delivery to another channel if one encounters a problem. For example, if you are a part of the supply chain for medicinal use of cannabis, you can seek places where recreational use is allowed to shift your supplies to them in case of any restrictions in one area to another.
5. Go Online
Online cannabis selling platforms made considerable profits during the lockdown and pandemic outbreak. Some dispensaries could not sustain the pressures of the market and crumpled down, but many online businesses made huge profits during this time. Some of the stores also reported a 200% increase in sales. Online stores faced their challenges, but attractive customer offers and ease of placement made stores account for huge profits. Having an online platform can help you sustain market uncertainties; therefore, building an online platform and spending some resources to market the same can be beneficial in the long run.
6. Take Help from Supporting Platforms
Any business can flourish, as long as the entire industry is doing well. Whether the cannabis industry will meet its much-deserved status of legalization at the federal level is yet to be known. However, the constant efforts to increase awareness about this powerful herb make a massive shift in the minds of the people. As an entrepreneur, you can maximize your sales and spread awareness about your product partnering with channels and platforms that support the alternative remedy.
The Bottom Line
How an entrepreneur survives has mostly a lot to do with planning and strategies according to market conditions, restrictions, and supply chain management. Although external factors like government support have an essential role to play too, the consistent demand in the cannabis industry can come to your advantage. Entrepreneurs who will keep on implementing changes according to the market needs will magnify their chances of success.
About the Columnist
Grace Hawkins is a full-time content marketer who has been closely studying the cannabis industry trends for quite some time. When Grace isn’t writing, she likes to work out, try new cuisines, and play with her dog.