people working on a marijuana microbusinessna microbusiness

Starting a Marijuana Microbusiness: 10 Things to Know

Every day we hear from people who are interested in starting a marijuana microbusiness. 

Yay, you! We want you to have a marijuana microbusiness, too, but we also don’t want you to get your hopes up without having some basic facts. This is a challenging industry, it’s very competitive and expensive. If you’re up for the challenge of starting a marijuana microbusiness, read on!

a stack of coins growing some seedlings to show how starting a marijuana microbusiness costs money
  1. Microbusinesses are not that different than any other marijuana business in that you’ll need to locate in a city, township or village that has opted in for recreational marijuana and for the business you want to create. For instance, if you want to create a consumption lounge, you’ll need to find a municipality that has created zoning for a consumption lounge. Some places are only allowing specific kinds of adult-use/recreational licenses. You can’t have a microbusiness in your home unless you’re a marijuana consumption event planner.
  2. There aren’t many places in Michigan welcoming to adult-use/recreational marijuana licenses of any sort, at least not yet. You’ve probably read articles about how most municipalities have opted-out. We believe this will change this year and next. We HIGHLY recommend if you desire a specific location, start meeting with and persuading the municipality of your choice to opt-in. Many municipalities opted-out to take a wait and see period—if yours is one that did that—it’s time to start building your case. There’s no guarantee of success when working with elected officials, but you need to start working on this angle if you have a specific area in mind. 
  3. Once you locate a municipality, you will need to find a property that meets the local zoning ordinance. This is easier said than done. Finding the right property in the right municipality for the right price will likely be the hardest part of starting up your Michigan microbusiness. 
  4. You’re going to need a lot of money. Just because this is a microbusiness application you’re seeking, that doesn’t mean micro-cash. For instance, just to have your application reviewed by the State, you’ll need to pay a non-refundable $6,000 application fee, and an annual assessment to $8,000. You’ll also need to locate a property that’s zoned for your business, and either purchase or lease that building. There are hundreds of items, small and large, that you’ll be paying for as you move forward. We recommend that you hire an accountant to help you keep track of your expenses. If you’re in a social equity community and qualify, you can save some money on some of the state fees.
  5. Get your paperwork in order. You’ll need to create your business structure, determine if you’re want to be an LLC or a corporation, as well as determine the best tax status for your company. Make sure your partners are on board with the risk and the amount of time the start-up phase of this business will take. Starting a marijuana microbusiness takes a lot of time!
  6. You also may want to consider getting prequalified under the MRTMA as many municipalities require pre-qualification in order to apply for a municipal license. This will also give you the certainty to start spending money since you won’t know for sure whether the state will allow you to own a marijuana microbusiness until you become prequalified. 
  7. The state microbusiness license, while less burdensome than a medical marijuana business license, still takes an effort to complete. You need to round up your tax paperwork from the last year, be ready to explain in a narrative form any missing paperwork or discrepancies; you’ll need to speak to any legal action against you and no matter how minor the misdemeanor or lawsuit, you need to address it. You’ll be going through a thorough background check and it’s best to explain and provide paperwork for anything that has happened in your background that involves law enforcement, recent litigation, or taxes.  If you’re not good at this kind of detail work get some help.
  8. You’ll need to secure and pay for local marijuana business permits and/or licenses. For the most part, that’s usually $5000. 
  9. At the same time you’re making an application for a marijuana microbusiness license you’ll need to have a business plan and a social equity plan completed. While the state does not require much for these plans, oftentimes a municipality will. A business plan is typically comprised of two parts: financial projections and a narrative. Business plans need to be completed with care and attention–not only for State or municipal review–but so that you will have a plan of attack and can hit the ground running.
  10.  As soon as you have a permit to get started with a building, you need to determine if your DBA is the actual name of your business, and if not, you can start working on what you want it to be. You’ll need to find a website URL and develop a strategic marketing communication plan to guide you as you get ready to launch. 

Still ready to do this thing? GREAT! If you need help with anything microbusiness-related, give us a shout or even better, hop on over to our partner site Marijuana Microbusinesses and find out more.

post it notes on paper to represent communication planning for a marijuana microbusiness

Strategic Communication for a Marijuana Microbusiness

The need for communication (aka marketing or public relations) might seem like something to do when you get close to opening your marijuana microbusiness. But waiting to plan and prepare will leave you scrambling and behind the competition. You need to work on creating a communication plan and tactics as you go through the licensing process, and as your business gets started. It’ll give you focus on the kind of business that you want to be and what you provide to customers. Remember, the concept of a marijuana microbusiness is “craft cannabis,” and how you express that idea with name, images and words is the essence of your business.

cannabis flower

Defining Your Brand Comes First

A brand is everything around and inside your marijuana microbusiness. It includes creating a name for your company. Try to find something original, appropriate and memorable. And make sure that it doesn’t belong to another company. Even if you find a URL for your website that fits your company, that doesn’t mean someone doesn’t already have that same name, and if it is trademarked, you run the risk of being sued for using it. Do careful and comprehensive research when selecting a company name. After you’ve settled on a name, you can start thinking about a logo and a website. We encourage you to seek professional design and development assistance for these items. They’re essential to your brand and are meant to last. The logo is how people will first come to know you, and your website is the center of your communication ecosystem.

Creating a Communication Plan

Taking time to develop a communication plan can be challenging for marijuana microbusiness owners. It’s easy and fun to think about tactics: going to a cannabis cup event or an expo, growing your Instagram page, hosting special events, buying the perfect billboard, creating swag and writing smart text messages. BUT, without a strategic plan, your tactics are unfocused and random.

someone writing with a pen and paper to illustrate marijuana microbusiness communication plan

If your goal is getting people into your shop and talking about your products, then everything needs to lead to that goal. A brand strategy plan starts with a goal or goals. Other steps include defining your audience, writing your key messages around your business, developing objectives, writing a strategy statement and then finally considering your tactics. 

Once you have that work done, you’ll work to create a timeline and a budget. It’s a challenging process, but worth the time and it will help you focus on your communication when you’re open for business and things are hectic.

Use PESO to Define Your Tactics

We utilize the PESO model for organizing tactics in communication. Once your plan is in place, consider this structure to organize your tactics. 

P stands for PAID: this is any advertising or sponsorships you might do.

E stands for EARNED: this is your effort in media relations, getting your story in the news.

S stands for SOCIAL or SHARED: this is your efforts in social media.

O stands for OWNED: the assets that belong to you like a website and its content.

Once your tactics are complete, you’ll start to develop a timeline and budget. This is where the reality of the expenses involved comes into play. We promise that you’ll be scaling things down a bit and making adjustments as you go. BUT, with a communication plan, you can also develop a realistic budget for your marijuana microbusiness.

If you’re looking for guidance with the communication strategy for your marijuana microbusiness, give us a buzz. We’re experienced in helping brands launch in the Michigan marketplace and we’d love to help you compete and succeed.

Canna Communication is pleased to be partnering with Marijuana Microbusinesses in helping entrepreneurs get started in Michigan.

Post It photo by Felipe Furtado on Unsplash
Cannabis flower photo by Get Budding on Unsplash