Quick background and context – I will try to make this short as possible (though its likely not possible) – If anyone wants more info, ask and I will get more down outside of the OP.
My background is in engineering and automation. A few years ago the startup I worked at shut down (COVID lost our funding…). I saw how much preroll machines sold for and how simple they were, so I decided to develop my own solutions, manufacture, and sell them. In the initial process of developing the tech and auditing the value model of prerolls in the industry, I was able to (lets just say…) develop a system that solves many/all problems people arent even aware of, and ultimately decided to keep my tech proprietary and start a contract manufacturing business to leverage my IP in the cannabis space itself.
Over the last 2 years – I have worked with various clients in the space and bootstrapped my way to where I am now. Focusing time, efforts, and reinvestment into operational perfection and tech. I recently began a relationship with a new license holder who has contracts with very high level brands (You know them…). After talking with brands who operate worldwide in the space, I have realized that my operation is significantly more valuable than I had even thought. What we have now is a highly tuned manufacturing operation that creates unmatched value potential in the industry.
My sights are now set on national expansion…
I am being intentionally vague here – So don’t ask for tech/ops details please, it’ll just be awkward…
So – How do we best monetize / expand the value structure we have created, considering our circumstances?
One important caveat is that our tech, without our processes and us running the business, isn’t going to do much for anyone. Shit is extremely complicated and requires a lot to do right, and people WILL squander it without us. Plus the tech given out could be ripped off if the wrong people figured out our processes before we have the resources to outspend them (welcome to tech). So selling / licensing would be a massive waste of time and loss of potential expansion opportunity. So we are not going that route. Plus, we have also expanded our tech far beyond just prerolls, and already have extremely valuable horizontal expansion plans… We also know how to provide a certain (other) types of value by going this route we intend to capitalize on. Not to mention the value of the infrastructure for clients and our own brands. So for these reasons, the operation in other states has to be at least partly ran / owned by us.
Our prospective plan: A Cannabis Manufacturing Franchise
We partner via a joint venture with a business in new states who have preroll business, sourcing, capital and licensed space. We dedicate an area within the operation as our manufacturing area. Within this area, we control limited access entry and security to protect our IP. We provide a fully outfitted manufacturing operation within this area, and train a team (who sign a lot of contracts) to run the daily operations. Our partners handle in state compliance and payroll, while we handle all operation management from our base of ops (Think the corporate office for a food chain). Together we both bring in business (my brands, and our partner businesses, their brands, local CM work) and split profits.
So, my question is this. Many of you have worked with or even own many operations in many states. I have limited experience in this area. Many of you are also fellow entrepreneurs/business owners in the space. So I would like to see if anyone has any thoughts they might be able to provide on potential issues or opportunities, or if this model, for some reason unbeknownst to me, is problematic from some form of expectation I have based on lack of on-the-ground knowledge. Or if there are legal complexities I should be aware of. Things to look out for or consider when rolling out this plan. Or maybe this just doesnt look like a valuable proposition or raises specific concerns, as I have proposed, that need to be worked out?
One major issue of an engineer running a business without a sales-y partner is that we are process people, not networking people. So while we have built a value structure that is to my knowledge unparalleled in the market, I have nearly no contacts for investors, partners, license holders, or national contacts who would be able to move forward with. So second thing I hope to get is advice on how to get in front of the right people. I am very confident on the value I can provide here, but it is (intentionally I’d imagine) difficult to get in contact with the right people to make this happen. I am aware of conferences and cannabis events, and intend to start there, but this will take a lot of time, so anything that could help me cut the curve would be greatly appreciated advice… as I mentioned, I am an automation nerd more than a networking guy – If nothing else I’m systematically too focused on creating value to spend the time pushing it. My toxic trait, and a common one, as an entrepreneur, that I am working on fixing… That said, I can close deals and articulate my value well, so once I am in the door I am good.
I appreciate any and all thoughts! This is my first official thread on here - Cherry popped 