It’s time for financial, actionable industry advice from The Successful Canna-preneur author and Navy veteran JM Balbuena. Balbuena is an author, filmmaker, advocate, and entrepreneur focused on empowering the generation of leaders in the rapidly growing legal cannabis space. Balbuena has been awarded the “Cannabis Educator of the Year” by the 2021 Las Vegas Cannabis Awards and “100 Latinas Shaping The World” by The New Latina.
Today, Balbuena serves as CMO for Prime Harvest Inc., a technology-focused full-service cannabis corporation horizontally diversified across various segments of the cannabis value chain including licensing acquisition and compliance management, direct-to-consumer operations, and parent company of Jaxx Cannabis, a San Diego-based retailer. Her sage wisdom spans consumer products from food to fashion and multi-media.
Balbuena has now written the official guide on how to thrive in the legal cannabis space. “My editor said, ‘girl, you’ve been in weed for 7 years, you should write about that.’ It was an exercise they gave me,” says Balbuena. “They had me look up stats about how many women of color had written books about cannabis. I said, let me see if I have a book in me.”
Here are ten tips for aspiring entrepreneurs who may want to enter the cannabis industry from Balbuena:
1. Seek to problem solve
One key piece of advice from “The Successful Canna-preneur” is to seek to solve a problem instead of simply to make money. “This is a new industry. Looking at it from that perspective, things are going to change. People creating laws that have never before for cannabis, so things are bound to be rocky at the beginning. The mindset of having that creative vision, of ‘what’s a problem I can solve,’ is an ideal place to start.”
2. Bring your strengths
In the B2B world, there are a lot of companies struggling with certain issues. One prevalent example, Balbuena says, is accounting. “Coming from an all-cash industry, counting for all cash is complicated,” says Balbuena. “You need accountants that know how to manage 280E. Anybody managing a business with a federally legal illicit substance, they have to go through that process, and that’s unique. If you know how to account and run books, you may have a lot of business in the cannabis industry. That’s an example of how you can solve a problem that would give you business because people are looking for that.”
3. Find partners
Do research and find money-making partners or connections with in-demand brands. “If you’re in business, you want to make money. It’s your livelihood, don’t lose sight of it,” Balbuena says. It’s wise to make a deal with an existing producer. “Look for somebody who is creating something you really admire, and offer them some value,” says Balbuena. “Make a long-term partnership.”
4. Have heart behind your brand
Heart and authentic storytelling behind the brand offers a great value. Boycott Shitty Weed is Balbuena’s passion project, an advocacy lifestyle brand for cannabis. In the 3 years since its inception, Balbuena says the brand has released 3 different collections that are all about different time periods in cannabis and how they influence the culture. “The first collection is called OG and it was meant to bring info to the people about quality cannabis and why it matters,” says the founder. “Knowing your grower, growing your own cannabis. The quality of cannabis is not just about consumption but about the state of the industry.”
Highlighting cultural touchpoints, Propaganda is the second collection. “We focused on the prohibition era, on people who were on the wrong side of history in cannabis, also drug abuse. But keep in mind, drug abuse is not a criminalization problem but a healthcare problem. We focused on that information in the products we put out on Instagram, which shut us down by the way. The third series is called Vipers. During the Jazz and Blues era, there were people who would use cannabis for mental health and creative purpose. The subculture was developed called Vipers, because of the snake that makes the noise when you’re smoking.”
5. Veterans are welcome
Balbuena is more than an entrepreneur. She’s a former member of the U.S. Navy. She offers advice to inspire more Veterans to enter the cannabis industry and to safely seek out cannabis for their individual health. “The healing aspect of cannabis is always at the forefront of my work,” says Balbuena. “I’ve personally dealt with PTSD. I was in an accident, and from that accident, I had a TBI (traumatic brain injury). There are a lot of vets across the world coming from that system and dealing with the transition to civilian life, it’s challenging. I do believe that cannabis does have those healing properties and the science is there to back it up. If you’re dealing with mental health issues, I would say, cannabis can be just as good if not better than narcotics that they force-feed us both in the military and outside of it.”
For Balbuena, her diagnosis of a TBI meant a sleeping disorder for which cannabis is the remedy. “You don’t have to smoke it if you’re not a smoker. It can be a patch, a gummy, a chocolate, or whatever you’re into. Beyond consumption, I think it’s a great opportunity as far as business goes. I think veterans should also have that opportunity to claim their stake in that industry. Within the pages of the book, I try to convey that message.”
6. The industry is for you, regardless of your race or gender.
“To anyone interested in cannabis wanting to learn how to enter the space, it’s for you,” says Balbuena. “I am a woman of color, Latina, black, veteran, LGBT, and immigrant, so I want to make sure that those people who can relate to me can see an example of somebody who belongs in their community and who is also doing it.”
“I point out other folks doing it in the industry,” says the author. Overall she says cannabis is “super diverse. Every race, gender, and background, everyone enjoys cannabis at the same rate. I do think we need more POC to be a part of the industry. But this book is for everybody anyone who’s looking to be an entrepreneur in the space, or how to be an investor.”
7. Crowdsource your investments
The author offers some money tips: “For cannabis companies looking to raise capital, in a scaling position, there is no way to raise capital. It would be a form of crop funding and Regulation A. It’s regulated by the CSE. You have to have an audited accounting for it, and there 2 tiers. Tier 1, where you need unaudited accounting, you can raise up to $20 million in one year. You are able to raise money from accredited and nonaccredited investors. You’re able to raise capital from whoever wants to invest. Tier 2 is up to $75 million in 12 months, and Tier 2 has its benefits. For example, people are not required to register or qualify their offerings with state securities regulators.”
Balbuena’s company is opting for a Tier 1 Regulation A funding round. “You can invest directly in our company in exchange for shares,” she says. “We’re opening it up to the community. We reached out to our customers first, they were the first round who invested in our company. You’re creating the lifecycle of keeping the business in the community. The customers are the investors, and creating that ecosystem. High Times did it, Gage Cannabis has done it. Some people have been successful so we’re jumping on that train.”
8. Focus on a merch or ancillary business to start
The author has some actionable advice for folks who want to start in the ancillary world. You don’t need too much cash upfront for this option, she says. When it comes to designing merch, entrepreneurs could begin right away for clothing, accessories, and ancillary products like glass.
“When it comes to smaller scale businesses, for instance, somebody who wants to start a merch brand, I would suggest starting with the drop-shipping model,” says Balbuena. “That allows you to not have inventory. People can buy the product, you invest in a Shopify account, a printer, and you pay when people buy the product. You pretty much split the money with the drop-shipper. You get your cut for creating the graphics and picking the shirts, and when people order, it’s made on demand. You get your cut right away.”
9. Stabilization is coming
“In 5 years, I think we will definitely be closer to some type of federal change in the status, either rescheduling or legalization,” says Balbuena. “When you talk about legalization, you’re talking about regulation. It takes a lot for me, a lot of people discussing, and a lot of people who may not have the best interest in the cannabis industry as a business model. We may decriminalize and deschedule in the next 5 years, that’s more feasible.”
Patience and endurance will allow entrepreneurs to witness the stabilization in their respective markets. “I’m advocating for that and hoping that’s what happens,” says Balbuena. “I think the industry will be more stable, as I was saying earlier, the people making the laws, this is their first time regulating cannabis people navigating the space. It’s also our first time actually navigating a regulated cannabis industry. In California, in Colorado it’s been longer so they’re a little bit more stable. Overall, well have more precedence to have a stable foundation or the industry it’s something to look forward to.”
10. Set your sights on new markets
The expansion of access to new marketplaces across the country offers unique, unprecedented possibilities for people who want to work in conjunction with the industry. Balbuena says she is excited about the cannabis market potential of her home state of New Jersey. “They have advocates involved who are super vocal about the things that didn’t work in California,” says Balbuena. “I love that for the East Coast.”
“They took social equity very seriously,” she says. “Again, it’s very new, there may be some hurdles to circumvent, but I’m very excited to see that program excel. The East Coast has a special place in my heart. Shout out to Happy Munkey, they got their license last week, I’m excited to see that move forward.”
