Jun 2022
3 min

Avoid Common Cannabiz Startup Mistakes

The cannabis industry is not known for its transparent sharing of information about how to start, build, and succeed in cannabis business. There is a plethora of steps to truly starting a successful and long-term cannabis company. Because of the lack of information, even the most experienced and intelligent and even most well-funded cannabis entrepreneurs don't know where to start.

Many entrepreneurs will start in the wrong spot. Usually somewhere far ahead of what step one actually is. So, what are the accurate steps to take in the correct order? We'd love to tell you! Here we'll go over some ofthe most common mistakes made by cannabis entrepreneurs when getting started and how these mistakes can be avoided. We'll do this in chronological order (not in the wonky order that many entrepreneurs usually fall in to).

Key steps to starting a cannabis business:

  • Gathering Accurate Information About How to Start a Cannabis Business
  • Building an Ownership Team
  • Writing Cannabis Business Standard Operating Procedures
  • Making Sure to Meet All Requirement for the License Application
  • Selecting a Location for The Cannabis Business
  • Planning for Cannabis Business Launch
  • Planning The Startup Budget for The Cannabis Business
  • Planning for Long Term Cannabis Business Success

handsome man facing sideways yelling into a red and white megaphone while standing in front of a white background

Researching How to Start a Cannabis Business

The Common Mistake

Reading articles on news sources to learn everything about starting a cannabis business in your state.

News articles often have incomplete or incorrect information.  When entrepreneurs rely solely on articles, they often miss key information and start their cannabis business process with a lot of gaps in understanding what's required.  This leads to constantly being surprised by new requirements and often leads to submitting license application that just don't cut it.

The Correct Course of Action

Visit the state's cannabis regulatory website.

The state's cannabis regulations have all of the information you need.  Regulations can be difficult to understand, but that's what the leafsheets guides are here for. To find your state's regulatory website, go to leaf and find your state. Click on the link that will take you to your state's cannabis business regulatory board. Download the regulations.

If the regulations are not downloadable, bookmark the link where you find the regulations. Next, find the information about licensing or license applications. Every state will have a section about cannabis business licensing, and this will tell you all of the requirements for applying for a cannabis business and starting your cannabis business. The regulatory site will also tell you if, and when, you can apply for a cannabis business license.

Assembling an Ownership Team

The Common Mistake

Getting a random group of friends together.

Many entrepreneurs will gather an excited group of friends to start their cannabis business, without considering the credibility of the team members. This is an issue because many states want to know about the background of the cannabis business owners and how their past experiences will lend to succeeding in operating a compliant cannabis business.  This isn't to say that a group of friends can't go into the business together.  However, it's worth considering having some friends be managers or staff rather than owners.  At the very least, find some additional credible team members to add to the mix to increase the credibility of the business.

Not having a strategy behind creating an ownership team is also an issue because teams that come together without much real thought about what it means to be legally bound business partners, often wind up in messy legal battles.

The Correct Course of Action

Select ownership team members based on skills, experience, and access to capital.

There are specific skills and past experiences that can lend themselves to making a cannabis business succeed.  Some of these skills and experiences include (and are not necessarily limited to):

  • Medical experience (pharmacists and doctors)
  • Business ownership
  • High volume retail management
  • Facility management (ex: manufacturing)
  • Agriculture
  • Sales
  • Security and safety
  • Loss prevention
  • Financial management
  • High risk industry compliance (alcohol, gaming, legal, etc.)
  • Cannabis business operations or management

Having owners with these skills and experiences will show the state that your team can operate a cannabis business and will increase your chances of success.  Additionally, having credible team members will increase the likelihood of investors trusting your team enough to make an investment.

a team of four co-workers in a discussing business performance statistics beautifully decorated office with brick walls and curtains

Writing Cannabis Business Standard Operating Procedures

The Common Mistake

Trying to write all the operating procedures on your own after reviewing the required operating procedures and the regulations.

Many entrepreneurs believe it's a good and feasible idea to attempt to write operating procedures for their business on their own. They have ideas about how they want things to go and don't fully understand what a quality operating procedure really entails.  This will lead them to writing vague and incomplete operating documents that don't even come close to meeting the state's expectations.

The Correct Course of Action

Find professionally prepared operating procedures.

Find professionally prepared cannabis business standard operating procedures whether those operating procedures are required for the application, or they're required once you get licensed to open your doors.

To save on your startup budget and be 90% of the way done with your cannabis business operating procedures, go to leafsheets,  find the business type for which you're applying, and put each plan that you need for your application and for your operation in the cart. Once you check out, you can find the do it yourself (DIY) customization guides for every sheet you've purchased on the leafsheets guides page. From that point, you're solid. You have every operating plan that you need, and you have guides for customizing every operational plan that you need.  If you and your team have the determination and make the time to take the sheets to the finish line, you'll be miles ahead of any one of your competitors who has decided to go the licensing process on their own.

Alternatively, if you have the capital, you can hire a cannabis business consulting firm to write the application for you.  This will usually run from $50,000-$250,000. If you have the capital to go this route, make sure you choose a quality consulting firm that has a track record of success and gives you full information about to what extent they'll help you through the application process.  Some will simply write the operational documents, and some will be with you every step of the way.  Ask all the questions before signing on.

Meeting All Requirements for the License Application

The Common Mistake

The licensing process, and operations will require additional information and documentation outside of the operating plans.

Many entrepreneurs trip up by thinking that they can navigate all of those requirements 100% by themselves. They'll play real estate agent, lawyer, and architect. This leads to a slew of complications and a higher likelihood of holding themselves back with an ocean of faults. There are some piece sof the application process that can absolutely be done with some time and dedication. Other should have at leats the assistance of a professional.

The Correct Course of Action

The key is to find great service providers to fill each requirement.

This usually means finding a lawyer or legal advisor for tips along the way when you have regulatory questions, a real estate agent for finding a good location that meets all of the state's requirements, a construction firm to create a construction budget, an architect to make the floor plans, a security company to make an overlay of security equipment on to the floor plans, and an accountant or other financial expert for help on the financials plan (if someone on your team is good with financial plans and projections then they can do this part!).

If you aren't sure where to find these types of professionals who are credible, well priced, and experienced in the cannabis industry, Leafsheets knows the best in the business and can introduce you to each vendor you need for your application licensing process and for your operations. Reach out to us at and we'll be happy to make introductions at no cost.

an iPad with a photo of new york city, and a black hat, laying on top of a rustic map of the unites states

Selecting a Location

The Common Mistake

Hurrying the location selection process, out of excitement and desperation.

Many entrepreneurs will rush to find real estate locations that fit distance and size requirements, but that are not in a good location. This is an especially detrimental mistake for retail operations where location, location, location is key for the success and profitability of the business.

The Correct Course of Action

Work with a real estate agent or broker in order to find good locations that meet the requirements.

Look for a real estate agent or broker who is familiar with cannabis busines sin your state.  If the state is new to cannabis, there may not be any agents familiar with the process.  If that's the case, make sure to catch them up on the requirements that the state has laid out for cannabis business locations, and make sure that they have experience in commercial real estate.  

Don't put all your trust into the agent because they may not know the cannabis business and what it requires as much as you need them to. So, when they find locations, make sure that you visit the locations in-person, that you meet the landlord, and ask all questions about the facility, including (and not necessarily limited to):

  • Size
  • Zoning type (most states have a required zoning type)
  • The local jurisdiction
  • Problems and issues the building has had
  • Past uses of the building
  • Foot traffic
  • Vehicle traffic
  • Parking
  • The surrounding neighborhoods
  • Income level of residents nearby
  • Crime rate
  • Whether the residents nearby are in support for cannabis or not
  • Access to power
  • Access to water

Your state will likely require some sort of minimum distance between your cannabis business and schools, churches, and public parks. Use Google maps to search the location address and "nearby schools" "nearby parks" "nearby churches" "nearby daycares" and "nearby houses of worship." Double check to ensure that the locations found by your real estate agent do indeed fit the required distance measurements. Believe us. We have seen real estate agents, unintentionally select locations that are right across the street from prohibited locations, and therefore, the locations they found were inadequate. Do your own due diligence.

Planning for Launch

The Common Mistake

Waiting until license approval to plan what the steps will be to actually get doors open.

If you're unsure whether you'll receive a cannabis business license, it can feel like a lot of extra work to plan for business launch.  Because of this many entrepreneurs won't do any pre-planning and then will have to rush their launch strategy once they receive notice that they have been awarded a cannabis business license.

When new cannabis business licensees wait until they have their license to have these key conversations, they wind up in a hurry. They make poor , uninformed decisions about what vendors to work with. They get their doors open much later than their competitors, which means they have to wait even longer in order to make money. And in the long run, because of all of these poor decisions, they wind up regretting choices they've made and having to change service providers, which usually winds up in a whole lot of headaches.

The Correct Course of Action

During your license application process, and even once the license application is submitted, have conversations with key vendors to create a strategy for what vendors you will work with once licensed.

Once you are licensed you'll need to work with key vendors to successfully launch your cannabis business.  Some of these include (an are not necessarily limited to):

  • Point of sales system
  • Payment processing
  • Banking
  • Accounting firms
  • Marketing firms or advertising agencies
  • Construction company
  • Architect
  • Interior decorator
  • Security company
  • Waste destruction company
  • Packaging, labeling and supplies company
  • Information technology company
  • Web developer
  • Brand designer
  • Customer relationship management software
  • Online menus
  • Equipment suppliers

Have a conversation with a selection of each vendor type, so you can make sure that you select the absolute best service providers. Contact us at if you'd like some introductions to pre-vetted vendors. As you select the absolute best vendors, make a list of those vendors, get product and service quotes, keep record of what their offers are, ensure that the expense of the offers of the services they will provide is included in your financial plan so that your team is prepared, and save the contact information for the vendors so that once licensed it's easy to sign up and get started.

Having these conversations ahead of time and selecting your vendors will ensure that you avoid any delays due to vendor selection issues, and can get your doors open as early as possible, which means making money as early as possible.

a blue hardcover journal with a silver stamp reading "my plan to rule the world" on a pink background

Planning The Startup Budget

The Common Mistake

Cutting costs in all the wrong places

A lot of entrepreneurs will hear large quotes for things like construction or web development and try to find these services at a discount.  This often results in shoddy work and therefore impacts the operation and customer experience. Often, they wind up spending even more money in order to correct mistakes and would have been better off spending the money upfront to set a solid foundation for their business.

The Correct Course of Action

Cut costs in strategic ways and spend funds where it really matters

There are items that can be done on a budget.  For instance, social media marketing and content creation can be done in-house by an employee or intern using social media design and planning platforms such as Canva, and content creation help platforms such as Rev, and Jasper.

Additionally, with some diligent shopping around, interior decoration can be beautiful without having to cost an arm and a leg.  This will give you a gorgeous facility without having to have a luxury decor level budget. There are companies that will create your interior decor for you and send you the links to order the products and set them up yourself.  This method takes some extra time but also saves you thousands of dollars.

Planning for Long Term Success

The Common Mistake

Not preparing for long term business growth ahead of time.

Many entrepreneurs fail to plan for success, scaling and business expansion.  Then, once they reach a level where they want to grow, they're stalled because they don't have a plan in place and don't have the time to make one.

When companies neglect to create a plan for success, they wind up running around like chickens with their heads cut off, making decisions day by day. Many of the decisions do not tie together, do not work together and do not effectively aim for the goal of business success. They're simply plugging holes with patches rather than piling building blocks. This makes operations messy, and reduces the chances of being a fierce competitor in the cannabis business market.  Additionally, companies without a plan for long term growth are far less desirable for investors or potential acquirers of the company in the future.  

The Correct Course of Action

Create a business plan and plan for long term business growth so that once you are licensed, your team has a step-by-step approach in place to go after your business goals consistently and effectively.  

To develop goals and a roadmap to reach those goals, define items for your cannabis business ahead of time, such as:

  • Sales goals
  • Multiple location feasibility and goals
  • Multi-state goals
  • Exit strategy
  • Growth strategy (acquisition or more license applications)
  • Brand identity
  • Target customers
  • Business differentiators
  • Company culture
  • Financial standards
  • Competitive edge
  • Marketing strategy
  • Who are your key competitors? (what do they do well?  What will you do better?)

Of course, the strategy will develop over time. Having the key questions answers and clear goals in place will act as a guide for your ownership and executive team over time which will make them more effective in working cohesively and leading your employees in the right direction.

well smiling dressed man in a light blue suit sitting and working at a wooden desk with plants on it, in an office with bright turquoise walls


Though there's massive opportunity for success in the cannabis industry there are also a lot of obstacles and potential mistakes, some of which can be avoided. When you follow these key steps, step by step and avoid common mistakes that some of your competitors will inevitably make, you'll be super powered to succeed. Your business will be prepared to compete, and your goals are way more likely to be achieved.

The leafsheets, products, information, and business support through will help you to:

From that point, all you need to do is make sure that you work with your vendors closely in order to accomplish key performance indicators, make sure that you develop a plan for success for your team ahead of time, and ensure that you do your due diligence by reviewing the products, documents and decisions being made along the way. With this strategy in place, you are set up to succeed and we are so excited to see you do so!

About Leafsheets

Leafsheets is a cannabis business support and acceleration platform that is breaking the barriers to entry and success in cannabis business by simplifying cannabis entrepreneurship.  Leafsheets provides vital operating plans, business information, and answers to the most pressing questions --- all of which are usually hard to access and require spending tens of thousands of dollars on consultants.  Not anymore!  Get everything you need to be 10 steps ahead.

Leafsheets is an experienced business advisor and not a legal advisor. For legal advice, consult with a licensed legal practitioner in your state.

Get Started Now

Leafsheets has you covered. Whether you're just getting started on your startup journey, are prepping a business plan for investors, or are up-leveling your operations game - Leafsheets has you covered. Find the operating documents you need to set a solid foundation for your cannabis business success. Start now!

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