My roommate and I could use some guidance. We’re both college seniors getting ready to graduate in May. We both studied business, but he focused on finance and I went with operations. Anyway, his top choice ended up offering him a job last week in California. He’s already begun looking at places to live right around Los Angeles, which is where the HQ is based.
I’m still applying for jobs like crazy, and more than half of them are also located in California. On top of that, I have enough money between my savings and tax reimbursement to move there and live for at least half a year. Because he knew that, my roommate suggested that I move out there with him and start a business on the side.
He cautioned me about how much work it might be but also said we could try investing first before jumping into anything entirely. We were thinking about getting into the cannabis industry but know nothing about it other than how much the market is growing. What’s the best way to approach deciding if we should get involved?
The first and most important thing to remember is that starting a business and investing in one requires careful consideration and steadfast commitment. Neither of them is especially easy to do well, and both pose significant risks. It’s probably best to separate them and reflect on the merits independently, but before that can happen, let’s fully evaluate the context. Your roommate was wise to first caution you about the time and effort that’s necessary to achieve success.
There are no shortcuts. An author at Fortune shared that key takeaway among eleven other tips every entrepreneur needs to know before starting a business. Anticipate long hours and hard work to be the norm rather than the exception. Try to reconcile that reality with an existing day job that you might possibly have in a few months time. Anyone would struggle to balance the two, and that’s exactly why so few of us choose to do so.
This isn’t to say that there isn’t considerable promise in starting a cannabis business, but don’t expect profits to come seamlessly. Some experts claim the industry as a whole is poised to exceed $24 billion 2021. With the legalization movement only gaining more momentum, those figures are liable to balloon even further. In other words, the savviest of industrialists stand to gain tremendously from well-received products and services. The question for you and your roommate is how much risk are you willing to incur in pursuit of those profits?
In the event that you both have a high threshold for risk tolerance, then perhaps the prospect of launching a business is the right decision. There’s plenty of helpful resources to help aspiring entrepreneurs open new dispensaries. The key is enlisting the aid of marijuana business lawyers. Every single state has its own specific marijuana rules and regulations on top of the fact that it remains federally prohibited according to the Control Substances Act (CSA). This is one industry that can be unforgiving to those who don’t appreciate the sincerity of what they’re doing.
If reading that paragraph alone made you uneasy, then it’s probably better that you consider investing. One obvious advantage of taking this route is not having any direct responsibility for the success or failure of the business and its operations. Gainful employment by day coupled with smart side investments can be equally as rewarding yet potentially far less intense. But don’t let this fool you into ignoring the risk. Take time to review these five things for new investors to know before investing in marijuana stocks.
You shouldn’t feel obligated to make the decision immediately. These scenarios are best resolved more gradually and as other major events unfold.
“When I was young, I observed that nine out of ten things I did were failures. So I did ten times more work.” -- George Bernard Shaw