BOULDER — To form a cannabis startup means joining an industry that is heaped with ever-changing regulation in its infancy.
It’s one with as many challenges as there are opportunities, and several cannabis entrepreneurs shared their experiences at Boulder Startup Week’s panel “What to Expect When You’re Expecting a Cannabis Startup.”
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At the panel, several Canopy Accelerator alumni discussed their experiences during a Q&A about running their startups. The panelists were: Christine Penny, CEO and founder of Miele & Co., which is starting the first hosted buyer summit for cannabis; Kevin Staunton, CEO of TreatmentX Inc., which aims to provide more information about medical marijuana to patients; Andrew Duffy, CEO of Best in Grow, which collects and shares retail data for dispensaries; Ron Basak-Smith, CEO of Sana Packaging, a startup that creates sustainable packaging for cannabis using hemp-based plastic; and Donavan Bennett, CEO of Cannabis Quality Group, which helps the cannabis industry streamline its documentation.
Difficulties of dealing with regulations
Staunton: From the moment you have your idea, it’s something you have to think about. The regulations can help you prove you’re able to do this or they can be a stop sign immediately. There are nuggets in the code that can provide an opportunity for you to fill a void.
Duffy: There’s the regulation foundation and regulations that may change. If you’re a Band-Aid for a regulation that will change in a few months, you’re not a lasting business.
Bennett: We’re all ancillary. We don’t even touch the plant itself and we still face regulations.
Duffy: Sign up for every newsletter. Keep up on the regulations and understand them.
How they approached the process of starting a business
Duffy: Talk to the people you’re supposed to be making a product for. Understand what those people need.
Basak-Smith: Push through the uncomfortable feeling. For the first few months, people are going to be poking holes in your ideas all the time. It’s part of the process.
Penny: One of the most eye-opening parts for me, moving from a true small business to being more of a classic entrepreneur, is the need to validate assumptions. I came into Canopy with the idea of an influencer marketing platform, but realized because of regulations it wasn’t viable. I had to go back to what my intention was to find a better model that was scalable. Find a plan before you’re too far down the path.
Basak-Smith: You have to validate your idea and make sure there’s traction to it, because investors want to make money. It all comes to building your business model.
Bennett: Ensure you have a story to tell. You’re trying to get someone to believe in your story as you build out your company. And it’s about patience. We started with one investor in September that closed [Tuesday]. It can take that long.
Duffy: Don’t think of your investors as bags of money. They’re people. This is almost like dating; you have to convince them of your value and how you will provide value to them. It’s a relationship. It’s getting people to believe in you and to agree to put money in you.
On building company culture
Duffy: We get a lot of responses to job postings where people say they want the job because they love smoking weed. But we’re building a culture of people who want to expand cannabis, not just smoke it. We’re bringing sophistication.
Penny: I think it has to do with the expectation setting. I had a co-founder who left when we pivoted our idea. I don’t think either of us appreciated how hard this is.
Staunton: I think we’re too new to have a true culture. Our model is trying to help patients, and it’s powerful how much people want to help me. That ethos is what I want to carry in in creating our culture.