Ancillary Business in the Cannabis Industry

Ancillary Business in the Cannabis Industry

March 12, 2020 By

When we typically visualize the Cannabis industry we tend to picture fields of plants, edibles, concentrates, and imagine bohemian style retail stores with cannabis products openly displayed throughout. What often goes overlooked are all the supporting businesses that make the day-to-day operations of the cannabis industry possible.

These businesses are what is know as Ancillary Cannabis Businesses or “non-plant touching” businesses, and they encompass everything from media services, tech, banking, soil, lights, accessory manufacturers, packaging companies, and of course consultants. These businesses through their myriad of service offerings, all help the industry focus on doing what we do best – producing top-quality cannabis products. Ancillary Businesses develop solutions to address the complexities inherent in our industry, where traditional business modeling and practices have failed to translate into successful (profitable) ventures.

dicentra Cannabis Consulting fields numerous calls each day from people simply looking for a way to get involved in this new and exciting industry. Many of these hopefuls without a clue as to what it takes in skill and dedication to be successful cultivators and/or processors, even though they may already the talent and passion to be successful in an ancillary cannabis business. Some hopefuls may even come with dubious histories. A less palatable truth in our industry is that it was in part due to the skill of black-market master growers which helped propel Canadian cannabis to the level it was when it was presented to the general public. The Canadian cannabis industry enjoys a reputation of being a safe, viable and lucrative industry, and this is due in part to all levels of the industry, including those with a dubious history. We need to stop the infighting, work together with all levels of our industry, and pool our collective skills together to support and translate our reputation as the best cannabis producers in the world for both recreational and medical cannabis. Success breeds success.

“We need to stop the infighting, work together with all levels of our industry, and pool our collective skills together to support and translate our reputation as the best cannabis producers in the world for both recreational and medical cannabis”

Ancillary businesses, often overlooked, have been providing steady and reliable revenue streams in an industry plagued by devalued stocks, a challenging regulatory framework, and criticism over employee treatment. These businesses, as a result, are being perceived by investors looking to get into the industry but wanting a safer option. By the very definition of being an “ancillary” business, these businesses are not fully bound by the cannabis regulatory framework, and thus are able to innovate and diversify their service offerings to the industry. Some licensed producers and processors, seeing this benefit, have begun exploring either working with an ancillary business or even creating their own in order to supplement their revenue in addition to their “plant-touching” ventures.

To understand how an ancillary business can help to enrich the cannabis industry, consider the following examples:

  1. HVAC Specialists: These specialists can cater to the industry by learning what levels of air quality and pressure are required to meet the GPP and EU GMP standards. With this knowledge of the parameters required by the applicable regulatory standards, these specialists can provide the kind of conditions needed by cultivators and still remain in compliance.

  2. Digital Marketing: Marketers can immerse themselves in the rules and regulations surrounding media and cannabis to ensure their clients remain compliant while marketing their brands, allowing them to focus on what they do best – produce a top-quality product.

In summary, ancillary businesses are in a unique position to provide value to the cannabis industry. Just as licensed producers and processors entered a virgin industry leveraging their key strengths a year ago, so too now, can ancillary businesses. They can be pioneers in this industry and provide brand new services in a way that hasn’t been done before.

Do you operate an ancillary cannabis business or are you interested in starting one in Canada? Whether you are an LP, processer, operator, retailer, or an ancillary business, you must comply with the regulatory framework surrounding cannabis. dicentra Cannabis Consulting specializes in helping businesses navigate this complex and sometimes confusing regulatory framework to help businesses bring their products to market. To learn more about our consulting services, check out our services page, or contact us at any time.