How to Find Your Niche When Starting A Cannabis Business

Gregg Greenberg is the co-founder and co-CEO of Everything But The Plant, a B2B ancillary eCommerce marketplace that sells everything you need to build, run, and grow your cannabis business.There’s no longer any question about it — cannabis is big business. In 2018, the U.S. cannabis consumer spending eclipsed $10 billion, with projected revenues for 2022 expected to top $23 billion. Gains like this mean you get to sell in a diverse market with a variety of enticing products and services.And, all this growth comes despite the continued federal prohibition of the industry’s staple product. As more states come around to legalizing cannabis and with Congress now debating the end of the federal ban, the industry’s prospects continue to brighten.

It’s definitely time to break into the cannabis industry. 

If you’re struggling to get started or just looking for inspiration, you can use the following steps in this guide to find your cannabis niche:

1. Identify the cannabis facet that best exemplifies your business model and/or product line
2. Find your niche within this facet
3. Narrow your focus to ensure your marketing efforts effectively target the right audience
4. Avoid common mistakes
5. Review the top niche markets and leaders for inspiration

Facets of the cannabis business

Source: Unsplash

Before settling on a specialization in the cannabis industry, you should be familiar with the two primary types of businesses in the field: cultivators (dealing with the growth of the plant) and dispensaries (which do the selling).However, these two are far from the only facets of the businesses operating within the industry. It includes:

• Laboratories that deal with product testing
• Value-added producers who create concentrates and edibles
• Industry-specific data platforms
• Extractors
• A litany of professionals, such as marketers and attorneys

Suffice to say you can broadly break down the industry into two spheres, referred to as “plant-touching” and “ancillary”:

• Plant-Touching Businesses — If you are passionate about the medicinal properties of cannabis, you will probably want to work within a sub-sphere of this category. Professionals in this sphere, handle the cannabis plant itself, through cultivation, processing, distribution, or sales. These are the businesses that most people closely associate with and think about whenever they imagine the cannabis industry. They are usually subject to strict government and industry regulations, and they must navigate complicated licensing processes to get started.
• Ancillary Businesses — These are all the other businesses that support the actual growth, processing, and distribution of cannabis products. They include data platforms, point-of-sale systems, Ag-Tech companies, digital marketers, accountants, attorneys, payment processors, and more.

Depending on numerous factors, but especially your passions, skills and interests, your niche will lie in one of these two broad spheres. Finding your niche can allow you to reap the benefits of a low competition market.Find your cannabis nicheAs an entrepreneur looking to enter the lucrative and promising cannabis business, you need to figure out where you fit in the industry. The key to any small business’s success is identifying a niche to exploit. By doing so, you avoid a common mistake many business owners make: going too broad with your products and market appeal.In case you’re scratching your head or still having a hard time “finding your niche”, you can use the following steps to get on the right track:

1. Determine your passions and interests — It’s simple — make a list of your top 10 interests. For example, cooking, music, nature, movies, etc.
2. Find problems you can solve — Make a list of problems you can solve. Next, you need to try to discover if there is an overlay between cannabis, problems, and interests. To do this, you need to understand your target audience. How old are they? Do they smoke? Maybe your audience loves to smoke flower but hates the way their hands smell afterwards. Your passion in chemistry inspires you to make a hand lotion that removes the smell of marijuana from skin. Get the idea?
3. Learn about your competitors — To find your unique specialization in the cannabis industry, you’ll want to analyze the competition carefully. Is there room for you to grow? Be sure to check out the social media accounts of cannabis businesses in your target area to get a better understanding of the market. Remember, competition isn’t necessarily a bad thing. In fact, it’s indicative of a profitable market.

 And, for further inspiration here are a few examples of cannabis companies that found success by finding their niche: 

• Eaze — Eaze is a California-based company that created an innovative app in 2014 to help residents procure marijuana more easily. Today, it is referred to as “the Uber of Weed.” It has expanded to serve users in more than a hundred cities across California and Oregon.
• KushCreams — Featured in Time, and National Geographic, KushCreams has tapped into a niche cannabis market by selling medicated lotions and creams for sensitive skin. Handcrafted in Gig Harbor, Washington, this unique product is intended a) for people who want a lotion b) people who want a medicated product c) who have sensitive skin. Notice that KushCreams has narrowed their niche 3 times — they’re not just selling a lotion, they’re selling a medicated lotion, and it’s not just for the average person, it’s intended for people with sensitive skin.
• Badfish Extracts — Okay, so you’ve probably heard of lotions before — but how about beef jerky? Founded in 2014, Badfish Extracts initially discovered its niche selling premium concentrates. Today, they have an eclectic product line that includes the popular infused beef snack. Their success can be attributed to their commitment to both quality and diversification. Medicated jerky ftw!
• AuBox —AuBox, is a luxury cannabis subscription service that delivers premium and unique products to your door every month. Boxes may include THC infused bubble-gum, intimates, edibles and more.

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