Finding out how the cannabis industry works, from an entrepreneur’s point of view, is key before even considering going ahead with a marijuana-based business. Honest Marijuana Company, an eco-conscious cannabis growery based in Colorado, is an industry leader and Chief Financial Partner Serge Chistov has the background to be able to advise new entrants to the space. He and Honest Marijuana have revolutionized the industry with an all-organic approach to the growth, production, and packaging of marijuana, utilizing all-natural cultivation methods to produce only the finest eco-conscious cannabis products.
The company developed environmentally responsible, recyclable tin cans that contain pure nitrogen to preserve the product in its purest form and offer the utmost quality. And what is perhaps their most advanced innovation is their recently patented Nanobidiol™ Technology. This invention enables Honest Marijuana Company to shrink chemical compounds like cannabinoids, which are not water soluble and therefore don’t absorb into the body in their normal size, into a nano-size. With this alteration, the cannabinoids can be added to cannabis products and consumed cleanly, discretely and with maximum efficiency, by way of transdermal patches, topical lotions, and other cannabis products. Their latest innovation include plans for new machinery to develop more products in the edible category, which will leverage their nanotechnology more widely.
Serge has shared expert insight on cannabis related topics ranging from the financing to product development, to the political environment and more with many high-profile publications. Home Business Magazine recently had the opportunity to discuss the current state of the cannabis industry with Serge. He discussed whether it was a great time to invest and even shared helpful advice for aspiring cannabis entrepreneurs!
HBM: Is this a good time to invest in the cannabis industry?
SC: “Yes, indeed, but those investing in cannabis need to do so with strong consideration for the long-term view of the space. Why? Because in the short term, the industry will still be hindered by regulatory challenges. Despite this, it is a growth industry, even when it comes to legalization. Momentum is building to increase the circumstances around legalization of marijuana. While all 50 states have legalized cannabis or cannabis-derived products in some form or other, there still needs to be uniformity and perhaps even a federal overview to really kick things into a higher gear. That said, innovation and growth, both domestically and globally, are on the upswing, which point to the marijuana industry as being a good investment in the long term.
If you think about it, there is plenty of evidence that cannabis is being normalized in society at a pretty quick rate. In fact, this latest election could be the tipping point where recreational marijuana becomes a normal part of society, like alcohol and cigarettes. So while the latter two are legally available with similar regulations from state to state, there are a lot of people who are seeing the benefits of cannabis as an effective way to manage stress, help them relax, and in general, contribute to their overall wellbeing. Most people are looking at cannabis as a positive, for its medicinal qualities in stress or anxiety relief or to mitigate pain or other conditions.
One of the reasons that cannabis is becoming more mainstream is that there are new ways to consume it that don’t involve inhaling. Clean but nonetheless efficient delivery of the compounds are making a bigger dent in the marketplace. Now, everything from edibles and lotions, leveraging nano technology for transdermal transference, are becoming more widely available. This is all happening at the same time as an increased negative reaction to smoking, which is becoming more and more taboo thanks to the side effects of inhaling and second-hand smoke dangers. The non-inhaled options that are available for cannabis consumption are helping to push its normalization.”
HBM: What is your number one piece of advice for up-and-coming cannabis entrepreneurs?
SC: “Do your due diligence! A cannabis business is no different than any other business. You have to look at the overall industry and market, create a solid business plan, leveraging the right price structures. If you crunch your numbers correctly, and can find the right opportunities, there are plenty of growth possibilities. The key is to keep your eyes open and look ahead to where the technology is going. The initial novelty around the word ‘cannabis’ will wear off. In fact, I think normalization is already starting this process. Now, cannabis-based businesses are just a business, like any other, so due diligence is vital.
Bottom line? My advice, which would be true about going into any business, is to crunch the numbers left, right and sideways. Count again and again before you invest your money, and make sure that you have a realistic exit strategy and that you aren’t committing your entire capital. It can be easy to get caught up in the excitement of a new industry, but if you can keep your emotions at bay, then by all means, invest!”
HBM: What are some of the challenges entrepreneurs should be aware of before getting into the cannabis industry?
SC: “The unpredictability of the federal regulations is probably the number one issue to think about. There are a lot of unknowns with regards to banking and the IRS. How they view the industry and how they are willing to interact with it, given the lack of federal legalization, is still quite variable. From the manufacturing side in particular, there is inconsistency in regulations from state to state when it comes to things like packaging compliance, for example. That regulatory framework needs to be stronger in order to make compliance easier to manage, but for now, it can be quite frustrating. You think you have done all of your due diligence and finally have your product ready to go to market, but then you end up having to revamp the packaging because there’s a new regulation being put in place. Hopefully, things will become more uniform as the industry continues to grow, but the lack of ongoing consistency is definitely something to be aware of.”
