In order for a business to operate legally, they’d need a government-approved license. Now that cannabis in New Zealand has been officially legalised by the Ministry of Health, pioneering and new businesses are more than eager to apply for a license. But before all of us can get our hands on that valuable permit, we should know about the 5 crucial questions we need to ask first.
1. Who are the Personnel We Need on Our Team?
In order to get a winning application, there’s a need for us to consider how our team would match up with the skills and expertise needed to make the business successful—as well as the application. Gaps in expertise should be filled with a specialist on a consulting contract. Sure, it’s going to be an extra investment upfront, but it can certainly aid to improve the preparation of business operations and enhance application scoring.
2. How can Our Business Help the Industry and the Community it Serves?
Businesses mainly serve to provide profit for the person(s) who started it. However, our businesses should be built on the basis of caring for the people, making sure they get quality products, provide jobs, and improve the quality of life; ensuring that we are part of something larger than ourselves then it’s missing a vital element of helping the cannabis in New Zealand industry and the people.
3. How Long Can the Business Survive Without a Profit?
Clients or customers will still need a huge amount of time to build up. During those slow days, cannabis business owners need to have an extensive amount of funds to cover significant expenses like lease or mortgage payments, consultant payments, and legal fees. Running financial modelling could help to understand of pre-operational cash flow better and a strategy to deal with it.
4. How Will We Make Money?
Opening up a business can be truly expensive, which is especially true for a medical cannabis business. According to Ken Cera, founding partner of the law firm Schwartz & Cera counsel, the best way to raise money is by approaching smart investors.
He says “Smart investors see a downturn as an opportunity to invest in good companies at a lower price. Show them why you are going to make it happen. Show them how you will be ready when the time is right. This is a time full of opportunity. Valuations may be lower, but I still see many deals going forward.”
5. What License Should We Apply For?
There are a lot of licenses that we could apply for, which we can’t apply for everything, and choosing the right one is the best option we have. Knowing one’s strengths and understanding how they can turn it into a competitive advantage will make it easier for them to decide which license suits them best.Cannabis licensing is like a game of planning and details. Medical licensing for cannabis in New Zealand is complex and “harder than anything you’ve ever done”. But with good ideas, loyal partners, and the right questions to ask, it can turn into most “rewarding venture that you’ve ever done.”