It’s not unusual for new cannabis cultivation operations to need assistance in what can be a very challenging business. The same holds true for those in existing markets, who are expanding and could use guidance.
Regardless of what kind of help they need, business owners can find a broad spectrum of consultants to guide them. Consultants and management companies can assist in areas such as license application, staffing plans, facility design, system implementation, security setup, standard operation procedures (SOPs), cultivation procedures and strategies, OSHA compliance and state-specific regulatory compliance, among many others. Costs associated with third-party advisors can vary as much as the range of services they offer — from expensive upfront fees, to partial ownership, to deferred incentives and everything in between.
James Lowe, co-founder and president at MJardin Management, cautions that most of these subjects can vary greatly from state to state, so it’s important to be educated on state-specific matters — or to hire someone who is.
“Before marijuana was legal, the people who were growing and selling it, obviously, were doing it underground. There was no regulation, no quality control, no employee or HR needs to focus on,” says Drew Youpel, director of operations at Milestone Safety Group, a safety and risk management consultancy. “Now that legal marijuana has taken off at such a rapid pace, you have all the regulations and the burden of figuring out how to do this the right way.
“Now it’s pretty much like any commodities-based business, like corn,” he adds, and, therefore, in addition to the plethora of industry- and state-specific regulations, cannabis businesses face the same federal standards and compliance issues as those businesses in other industries. “All of the regulations are already in place. The marijuana industry needs to get compliant right now. It can’t be ‘down the line.’ There is no grace period,” he says.
Hiring a consultant is, in many areas, a preemptive strategy that can prevent costly violations or mistakes, increase profitability, effectiveness and quality, and lessen environmental impact, says Nic Easley, CEO of Comprehensive Cannabis Consulting. For example, it can help a business document its procedures to ease the transition period when people change jobs (e.g., if a lead grower leaves). And it can help cultivators see the big picture when it comes to issues they may be having.
“Someone could come to me … [thinking] they need [answers to] three things,” he says. “But … where they see three, I see 30. Often the problem is much deeper than they initially think, and it takes someone with years of experience in different aspects of the business to see that.”
As in any business, finding the right consultant can be tricky, and keeping that relationship — once you find it — can take work. Following are tips to help you find and maintain good working relationships with industry consultants.
Know What You Need and What You Can Afford
“First and foremost, growers need to be prepared with what the problem is and what element of their work they need help with,” says Jay Czarkowski, founding partner at consultancy Canna Advisors. For example, do they need help with licensing, facility design or pest management, or overall business strategy or operations?
If you have specific issues, find a consultant with expertise in that specific area, Lowe says. But, he adds, if a cultivation business owner needs help with just about everything or a variety of things, “then hiring a management company might be the better option, as those companies are more full-service with a broader scope of knowledge.”
Also, put a lot of thought into how much you’re willing and able to pay for help. Most consultants will work with businesses to find a comfortable price point, Youpel says. But to get there, he adds, the client needs to clearly outline budget limitations.
Do Your Homework
Cannabis business consulting is, of course, a business. Lowe cautions that “every consultant will say they are the best, have the newest technology and will increase profits.”
Due diligence is key. As Czarkowski, advises, “trust, but verify.”
Check out the consultants online, beyond their own websites, suggests Easley. Are they out in the industry, speaking and writing articles? Are they established thought leaders? Ask for and check references.
“You’re looking for credibility, not marketing,” Easley cautions. “You might not need the ‘biggest and the best,’ but it can’t be somebody who read an article in High Times once,” and thinks he’s an expert.
But the homework doesn’t end there. Good consultant-client relationships are based on synergy and a shared vision. It might be as obvious as an outdoor grower not syncing with a consultant experienced only in greenhouse growing, says Avis Bulbulyan, CEO at Bulbulyan Consulting Group. Or it might be something deeper, involving scope, goals, standards, etc.
“Have a list of questions ready when you go in to talk to a consultant, and write down everything you want them to know about your business, your issues,” Bulbulyan advises. “This is a new industry; there are a million and one things going on, and it’s easy to get distracted.”
Initial meetings with consultants are for testing synergies, discussing needs and expectations, and working on budgets — not for finagling free advice. Trying to “pick a consultant’s brain” without paying for the privilege can get things off to a bad start, Easley says.
He suggests hiring a consultant for a small project to see how well you work together. Either it’ll be a fit or you’ll save money and heartache by figuring out early on that it’s not.
Even if you are sold on one person or company, “Don’t marry a consultant until you know he’s a good kisser,” Easley laughs. “Start small, with very specific deliverables. And then scale up. If it goes well, then you can expand the contract.”
Business or personal, relationships are relationships. And communication, of course, is key.
Clear, concise communication has to start in the first conversation of the prospecting process and continue through to dotting the last “i” on the agreement. It’s especially crucial to set and maintain clearly defined expectations and outcomes. If no one is clear what is expected to happen at any given stage, accountability goes out the window, and no one can be sure whether or not the relationship is working as hoped. And if it’s not, why not.
It’s also important, Easley says, to create a clearly defined scope of work that takes into account as many scenarios as possible, including any potential stumbling blocks and how they’ll he handled.
Consultants should be accessible and responsive, Czarkowski says, suggesting that regular conference calls, cloud-based file sharing that’s available to members of both sides of the team, and ongoing updates are all important elements of the client/consultant relationship. Clients need to keep the lines of communication open as well, he adds, and make any necessary information available to their consultants.
One obstacle to effective communications, Easley says, is a client’s fear of giving away too much proprietary information — especially when the client is established, doing well and aspiring to do better.
“But you need to expect to be open and transparent,” he says. “A good consultant is going to ask a lot of questions. You have to be ready and willing to answer them.”
Check Your Ego at the Door
No matter why you’re hiring a consultant, you are paying for their expertise. Still, Bulbulyan says, many clients resist heeding consultants’ advice.
“A lot of times, a grower will … pay the consultant and then tell the consultant what he wants to do,” he says. “One of the advantages of having a consultant is that they have experience with … different ways of doing things … whereas the client may only know … his own way of doing things. Remember, taking advice doesn’t take away from you being a good grower; it doesn’t do you any good to pay someone for advice and then not take it.”
Easley adds that when client/consultant relationships sour, it’s often because the grower is “too headstrong and unteachable” or the consultant lacks the ability to communicate well. Or both.
Finally, in addition to heeding advice, Bulbulyan recommends “really getting your money’s worth” by making sure the consultant explains the “why” behind the advice she is giving.
“If you hire someone to write a business plan, for example, it’s one thing to have them … hand it to you,” he says. “It’s totally different to have them explain the reasoning behind … why it was written that way.”
Overall, working with consultants is a two-way street that relies on clear expectations, open communication, accountability and results. With that in mind, consultants can be invaluable resources in helping you launch or expand your business, or address a set of specific challenges.