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Growing Your Manufacturing Business


Marijuana manufacturing facilities are expected to grow over 23% in the next three years. Along with this come a number of cannabis business opportunities and challenges.

As facilities grow, your business should be able to adapt by increasing the number of your clients and employees as well. This can be challenging, especially if you already have a lot on your plate such as compliance and regulations to keep updated with—but, it is not impossible.

Here are some ways you can seize the opportunities and grow your marijuana manufacturing business.


1) Improve brand awareness

Raising brand awareness is essential to every business, both for startups and for companies that have been in operation for years. This may be quite a challenge for cannabis manufacturing businesses since there are still limitations. For instance, Facebook and Google constrain advertising of cannabis-related products.

However, there are still a number of ways to get your product out there. You can consider other options such as optimizing your website to gain more traffic, publishing blogs or updates about the industry and your company, and joining industry events such as trade shows and symposiums. Most cannabis manufacturing brands are also giving free t-shirts at trade shows, so prospective clients will be like “walking billboards” for their brand.

Instagram is also the heaviest social media platform for cannabis consumers. Manufacturers will need to create two to three separate profiles for their business as some of cannabis Instagram accounts are being shut down after a few months. Even though this is frustrating, it still pays to get your manufacturing brand out there on the largest social media platform for cannabis consumers.

Another strong opportunity you have in increasing your brand awareness is at the point of purchase. Make sure that you turn your clients to brand ambassadors by providing them with the best product and customer service.

2) Build loyalty programs

Building loyalty programs is one of the ways to expand your client base and sales, and at the same time nurture your current customers.

There are several ways to launch your loyalty program. You can either offer a discount for new customers, give free accessories for those who bought a certain amount of cannabis or offer bonuses for those who refer a buyer. You can also employ a “points-per-visit” structure or “points-per-amount spent” where you’ll give an incentive for those who acquired a certain amount of points.

3) Improve systems

As the business grows, the demand for better systems increases too. Consider reviewing your current systems for manufacturing, inventory management, and accounting. Having updated and comprehensive systems helps streamline your business process, improving efficiency and productivity.
 
Gather your teams and assess your current system with them, then develop a plan to address your issues. In developing your plan, you may also seek help from other parties, such as your investors and advisors.

 

4) Pay attention to accounting and compliance

Aside from brand awareness, accounting and compliance are also essential for every business, especially in the highly-regulated cannabis industry.
Accounting for cannabis manufacturing business can be hard to understand with all the federal tax laws and state regulations. For instance, the new tax bill which is effective 2018 has several new and updated tax deductions which can help your cannabis manufacturing business. Some examples are the updated depreciation codes for manufacturers.
 
Paying close attention to these and other changes can save you from further trouble such as heavy penalties and the suspension of cannabis license. The CDTFA has stated that cannabis excise tax penalties can be 50% of your actual tax amount due. All manufacturers could refer to the published California Cannabis tax guide and should have their accountant provide them the details of what the rules mean to them.
 
Also, remember that tax regulations update almost regularly, so don’t forget to pay close attention to cannabis laws in California or the state you’re in as well as federal laws. The CDTFA can change the markup rate every six months. However, for 2018, they have decided not to change that rate. But it’s best to have your accountant be aware of the potential changes so you don’t get hit with hefty fines.
 
Need help with growing your marijuana manufacturing business? Aviva Spectrum can help improve brand awareness and help build loyalty programs. We identify ways to optimize your accounting and compliance programs. We are practical cannabis compliance problem solvers!
 
Aviva Spectrum offers a free consultation to all new cannabis clients. Connect with us today by scheduling a consultation with us here.
 
We also developed an Enterprise Resource Planning (ERP) Selection Checklist to help you choose your improved cannabis accounting software. Get it for free by clicking the button below.

 

Download ERP Checklist here