We work with many large cannabis businesses and many small ones too. It’s fun to talk up the bigger fish, but I have a soft spot for the little guys. I really enjoy small business at the end of the day. I like seeing financial statements of disciplined, privately held companies doing maybe $5m to $20m in annual sales; where the owners are getting good margins in a low-ego, no-drama environment; where the workforce is relatively stable; and where they only call me when it’s time for something sensible. Those are great little businesses.
These well run, profitable companies are also somewhat rare in the cannabis industry. Due to intense competition, heavy taxation and other business challenges, I don’t see as many of them as I’d like. Instead, the headlines are gobbled up by larger outfits that may or may not be run very well.
So, how are some of these cannabis businesses thriving? Here are five hallmarks of a successful, privately held cannabis company.
They control expenses
Controlling costs is important in any line of business, but it’s especially important for cannabis businesses where nothing beyond direct costs of goods sold (COGS) can be deducted from taxable income. We
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