Integrating Coworking Spaces in the Cannabis Business
The marijuana industry is proving to be an increasingly profitable marketplace. In California, for example, the industry has already surpassed $5 billion in annual sales and has the potential to reach $7 by 2022. And with what now seems to be a limitless room for innovation and business, any ambitious entrepreneur should be eying a stake in the industry.
On the other hand, coworking spaces are seen by many stakeholders as key to connecting players in the highly regulated cannabis market. We intend to dig deeper to see how impactful dedicated cannabis coworking spaces are to the marijuana community.
But before we do that:
What are Coworking Spaces and Are They Beneficial?
Coworking spaces are offices/workstations that are shared by workers and entrepreneurs from different professional backgrounds and companies. They are different from traditional workspaces in those people who don’t share a common employer can share the same office space. The trend of a coworking space has picked momentum in a big way over the recent past mainly because sharing space means sharing rent, utility bills, equipment, and generally cutting costs associated with setting up and running an office. These spaces offer the same amenities that workers would find in a traditional office, and a lot more.
Eliminating Barriers to Cannabis Business Entry through Cannabis Coworking
My Green Network (MyGN), a cannabis coworking facility based in Southern California, opened a platform in April 2020 that empowers new entrepreneurs to find their footing in America’s cannabis market. The platform mobilizes resources and knowledge from across the country, resources that are invaluable to anyone trying to overcome the crippling barriers to entry in most states. Members here are allowed to own their cannabis manufacturing licenses so, just like in the coworking culture in other industries, each business operates as an independent entity. MyGN is a good example of how coworking spaces can benefit the marijuana industry.
As a result of being ultra-regulated, entrepreneurs need over $700,000 starting capital to succeed in the cannabis industry; legal fees alone can be over $100,000 in some states. That’s on top of needing over a year of lead time, and sometimes up to 18 months before the license application is approved. That explains why only about 5% of cannabis businesses scale high enough to generate steady revenue. Most small marijuana businesses end up getting absorbed by the industry’s mega-corporations.
With shared facilities like My Green Network, startup marijuana entrepreneurs can save big in regards to capital expenditure and development. Entrepreneurs get fully-equipped office spaces, growth areas, on-site marketplaces, and stores that are cannabis compliant. Members of these facilities access marijuana dispensaries and are facilitated in the sales and distribution of THC, edibles, and CBD products at cost-effective prices. They get a clear line of sight to growth and scaling possibilities through the comprehensive support and networking opportunities they get in cannabis coworking spaces.
How Much Can Cannabis Businesses Save By Joining Cannabis Coworking Spaces?
A lot! The average startup fees when operating from a coworking space drops by almost 90 percent from $750,000 to approximately $75,000. The saved money can be channeled to other important things like improving product offerings, designing sustainable business models, and building brand reputation online and offline. What’s more, with cannabis coworking spaces, success is almost guaranteed right from licensing, to setting up the business, to making sales. That’s unlike in traditional marijuana business models where nothing is exactly certain.
Apart from monetary benefits, operating from a cannabis coworking space saves lots of time. In most cities in the US, an entrepreneur will spend about 1-1.5 years searching for a property in a cannabis-approved zone. It then takes another 12 months or more to get the property ready for use. With cannabis coworking space membership, all an entrepreneur needs are approval from their city and state, and they are in business in barely a month. New entrepreneurs also save about a year because they aren’t required to have managerial experience in the cannabis industry before getting their licenses approved. Traditional cannabis startups are required to have at least a year’s experience either as a business owner or cannabis business manager to get approved.
Other Key Benefits of Joining a Cannabis Coworking Space
The other major benefit of operating from a cannabis shared space is the community you gain access to. The entire space is dedicated to the cannabis industry, so every entrepreneur you meet can help your business grow in one way or another. You get the chance of networking with not only fellow emerging cannabis entrepreneurs but also the industry’s service providers, thought leaders, and players from other countries and states. If you need investors, they are right there with you. If you need someone to help you open new doors, e.g. diversifying your product offering, you can always borrow ideas from fellow tenants. What’s more, your fellow tenants could be your customers especially if you are a cannabis cultivator. Their customers too can also be your customers- they are right under your nose.
Are Cannabis Coworking Spaces for Me?
Anyone looking to enter the cannabis market can benefit greatly from acquiring membership in a cannabis coworking space. If you own a property that complies with zoning regulations in your state/city and would like to join the very lucrative cannabis real estate arena, converting your property into a coworking space would be your best investment option. You can also start any of these businesses in a coworking facility:
- An edibles business especially if you are a professional chef.
- A medical (or recreational) cannabis business.
- You can cultivate your marijuana from a coworking facility’s grow house and establish your branded line of products from your cannabis.
- Health and beauty business where you manufacture and sell beauty supplements and body creams made from the pot.
If you own or manage a licensed cannabis business that’s struggling to scale up, you can change your fortunes for the better by renting space in a coworking space.
Take Away Points
The growth potential within the cannabis industry is immense. Any emerging and ambitious entrepreneur needs to keep tabs on the industry.
- Integrating coworking spaces in the cannabis industry is and will continue eliminating the bottlenecks that hinder marijuana business success.
- Coworking spaces are for everyone. Any cannabis business idea is almost guaranteed to thrive in a shared space.
- You can save a lot in terms of business capital and time by joining a coworking space as opposed to establishing a traditional cannabis startup.