America’s legal marijuana market is ever-booming and will only get larger as more states decriminalize cannabis in the upcoming elections. According to Medical Marijuana Inc., the legal U.S. cannabis industry (both medical and recreational) is estimated to reach $7.1 billion in revenue in 2016, a 25% increase over the year 2015. The ArcView Group, a pot-focused investment firm, also states that the industry could easily generate over $10 billion in annual sales by 2018. For aspiring cannabusiness owners, Serge Chistov, financial backer for the Honest Marijuana Company eco-friendly ganja growery, is here with insight.
There are so many elements to consider and square away before launching your own marijuana company. Home Business Magazine recently had the opportunity to sit down with Honest Marijuana Company’s financial backer, Serge Chistov, to receive the exclusive inside on what all ganja-preneurs should know:
HBM: As a successful entrepreneur and the founder of Serge Import LLC, the importer behind Exclusiv Vodka, what led to your decision to provide financial backing for Honest Marijuana?
Serge: “I’ve always been very interested in industries dominated by passionate people. Once I visited Colorado and learned more about organic ganja growing operations, I decided to create something in the field.”
HBM: What were some of the initial challenges you faced in financing Honest Marijuana Company? What advice would you give to people looking to invest in the marijuana industry?
Serge: “Finding the right people to work with is not a marijuana-specific subject. I always say we will run out of good people way before we will ran out of the money to support them. When you can find hardworking, passionate people striving to grow the cleanest and the best cannabis flower, it is hard not to back them. My advice is to research well and hire the best advisors early, as it will save you money in the long run.”
HBM: What would be the economic impact of widespread legalization?
Serge: “Widespread legalization would create a positive economic impact, as it would take money out of the black market to create taxable revenue, innovation, and jobs. This sounds like a solid win.”
HBM: What changes do you see occurring with the federal tax policy in the next several years?
Serge: “I hope the policies will get simpler. It is too early to speculate, as they are election-specific.”
HBM: Should medical and recreational marijuana be regulated differently?
Serge: “Yes, I definitely think so.”
HBM: Are you planning to diversify the presentation of Honest Marijuana? How will you attack the variables that accompany setting up operations in different states?
Serge: “Our primary objective is creating a memorable and consistent consumer experience in Colorado or through collaborations in other states. There is a number of organic-minded growers in different states we are looking to work with as well.”
HBM: What are your thoughts about the outcome of the 2016 election? Could results determine whether the legal marijuana market continues its robust growth — or whether the market may have already peaked?
Serge: “I think there is promise for tremendous growth in the cannabis industry, as more states are lining up to legalize the plant.”
HBM: There is a slow but steady shift away from the traditional method of consuming marijuana – smoking it. This is seen by the many edibles and concentrates consistently being introduced to the market. Does this complicate the industry?
Serge: “I actually think it makes the industry more exciting. We are looking for cleaner and more efficient delivery mechanisms and there is a good chance that smoking cannabis will not be the dominant way to medicate in the future.”
HBM: In the rapidly evolving marijuana industry, what key traits are emerging for business survival?
Serge: “Real competition will bring the need for quality packaging, enhanced preservation techniques, and an excellent overall customer experience. These company traits are key for ganja-preneurs hoping to make it in the marijuana market.”
HBM: What is an average start-up cost for launching a dispensary? Is it true that the indirect costs for opening a marijuana establishment can sometimes be just as costly as the initial startup fees?
Serge: “The average startup investment cost is $2 million for a grow facility. I also agree that the indirect costs for opening a marijuana establishment can sometimes be just as costly as the initial investment. It is ludacris to allow taxation and disallow deductions for trafficking. This is because during the Regan era, one cocaine cowboy was caught and went to deduct the expenses to smuggle as business expenses in court. The government decided to implement 280E in such cases.”
HBM: What are some of the biggest industry changes consumers will see during this next year?
Serge: “There will be a demand for a better products and an inability of ‘just’ growers to compete. Consecutive business consolidations will also eventually give the market more consistent experiences. The initial information we received highlights the importance of developing an exceptional and consistent experience for all customers.”
HBM: How can Honest Marijuana’s specific business practices/ policies work to re-create a continuous consumer experience for everyone?
Serge: “When I buy a bottle of even ‘okay’ wine, I expect (maybe silly) to drink what the winemaker wanted me to try. Makes sense, right? Who wants stale chips? Today, in Colorado it’s hard to find a consistent herb to smoke. High quality preservation of the flower does not exist and low humidity turns the product into dry puff. That’s just not good enough for me.
We have searched all over the industries for the best solution to share our smoke with the final user. If we spend more time and money to make the cannabis as good as it is, it’s only logical to me to let others try it in its prime consumable state. Even for our concentrates and pre-rolls, we are working to implement nitrogen flushing to preserve their pristine condition for the final user.”
Serge Chistov is the financial backer for Honest Marijuana Company, which utilizes all-natural cultivation methods to produce only the finest organic and eco-conscious cannabis products. Their marijuana is also packaged in Earth-friendly recyclable tin cans with pure nitrogen to ensure only the highest level of integrity and quality. Serge advises ganja-preneurs on all of the assets needed to start a marijuana growery, investment strategies, pricing marijuana products for both wholesale and consumer sale, and more. www.honestmarijuana.com
