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Problems Selling to the Expanding Cannabis Industry

Normally we focus on the compliance issues, however we are trying to launch a new series of products and found something quite interesting. The ancillary cannabis industry has a real lack of professional sales people to market their products to all of the new Cannabis Related Businesses (CRB).

As someone who has been involved in a number of businesses, including the Medical Equipment industry, use of manufacturers’ representatives can provide national exposure with a limited sales staff.

A manufacturer representative is the most widely used type of agent in many industries. These reps are self-employed, independent businessmen and women who sell the goods and services of several different companies that do not compete with one another. In many cases, the products are sold to the same customer.

Manufacturer reps are normally used when a manufacturer does not have the resources to establish a direct sales force or if they are introducing a new product to the market where the sales potential may not justify the cost of using the company’s own sales force.

In its basic form, a manufacturers’ representative is any individual who agrees to represent a company and sell their products or services on a straight percentage fee, which is automatically added to the selling price of their product or service. This is commonly known as straight commission selling.

There are several companies selling ancillary products into the burgeoning cannabis industry. However, we have found that almost all of these companies selling to the cannabis market are using a direct sales model.

This might be fine when there were only a few states with significant cannabis businesses in their area. Unfortunately, now with thirty states, that have passed some form of legal cannabis, it is going to quickly become quite expensive for smaller manufactures and suppliers to support this expansive growth of potential customers.

In my experience in the medical industry, manufacture reps were an integral part of smaller manufacturer’s efforts to sell their products by sharing sales expenses with other small ancillary suppliers. So how can we find or start developing this powerful sales approach?

That may not be as difficult as many would assume. Rather than recreate the wheel, why not convert current independent reps in other industries to start representing the cannabis ancillary industry?

The first step is to find other ancillary companies that sell related or complementary products, but not competing items for a rep to sell. It would be kind of like a quiver of arrows, so the rep can have multiple items to offer.

The second step is to locate experienced reps who have already learned the powerful skills of cold calling and network building.

Several reps have indicated that trying to sell to the cannabis industry is akin to pulling out your own teeth, yet there is no one tougher to sell into than a doctor’s office or clinic. So medical reps already have the skills necessary to open up this new industry.

What is good news is that with all the consolidation of doctors’ offices and medical facilities the potential market for experienced sales reps is dwindling rapidly. In fact, one of my prior reps in medical has already contacted me about becoming a rep for this reason.

With the Marijuana Business Conference & Expo opening in Vegas on November 16, we have a golden opportunity to start this process. We suggest that the 300-plus ancillary companies attending this show start talking about how to open up the market to independent sales reps and give us a way to penetrate this exploding industry.

Just as we find in regulatory compliance, it is going to take a professional approach towards enlarging sales by pulling professional sales people into our industry. This is a discussion that we do not see very often in all of the marijuana based publications; yet, it is going to be a critical element in the success of this industry.

Thomas Smith

Thomas Smith

Thomas M Smith Chief Innovator CannaScore.

Smith has 33+ years experience in the insurance industry, risk management and government regulatory compliance. His experience includes owning and head of Sales and Marketing of a Commercial Insurance Brokerage and was owner and publisher of an industry leading electronic regulatory compliance suite of products, which included Federal/State OSHA, EPA and DOT rules, directives and interpretations. Most publications were a result of agreements with the regulatory organization where Smith’s company actually maintained regulations for those agencies and selling subscriptions to these electronic regulation products to the end users who had to comply with those regulations.

Smith’s business development activities also included designing an Internet site for US Department of Transportation, a HAZMAT compliance software product for UPS, assisting two international organizations to publish their regulations electronically.

Smith completed several insurance related schools and was part of the initial startup of the XML committee for ACCORD, an insurance industry organization that provides forms design and management systems for the industry. He also started and sold a company that market and sold medical supplies and products to Government Agencies.

This Post Has One Comment
  1. It’s like you are talking about me. I have been contemplating when the right time would be to take on additional help. Now is not that time, but it is approaching. The packaging machines that we sell appeal to the top 2% of the cannabis industry. There may need to be a little growth and consolidation in the market first before we bring on more sales force. The growth is happening now and we love it.
    Chris Helm

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