Over the past six years, we’ve seen the cannabis industry evolve tremendously – from the products available to the technology used to make those products, as well as the business acumen of the individuals and companies serving this continually growing industry. These changes and shifts are expected in an emerging industry like ours, and change means new opportunities for most cannabis companies. Taking full advantage of the opportunities available will depend on the successful partnerships that your company develops along the way.

Choosing a partner for any aspect of your business is important for success. Those who create the best relationships with other innovators and cooperative businesses will have the best chance of influencing the future of the space. The cannabis industry has been built upon camaraderie and connections, but there should be thought given when taking that camaraderie into a mutual business arrangement. Successful growth in this industry means choosing partners that help develop and maintain your business model.

Here are some best practices to consider when deciding to work with a partner in the cannabis industry:

• Know who you are as a company. Having clearly defined goals and objectives is a good first step. If you don’t already have these guideposts, sit down with your leadership team and brainstorm ideas, and then formally put them down on paper. Outside branding experts can help you craft these important statements if you need help. These points are extremely important to have solidified before you start the process of building partnerships. Find others that have a similar ethos to yours, who will ultimately bolster progress toward meeting your own company goals. The partnership arrangement should give you another player on your side, supporting your objectives.
• Do your research first. Even though the cannabis space is growing and changing, we all tend to know one another to a certain degree. Word travels fast when a company is doing a good job and innovating; word travels even faster when a company is falling short. Talk to your peers and colleagues, do some good old-fashioned Googling and see what the chatter is about your potential partner. Seek out references that you trust. Do they have positive endorsements from reputable clients? You don’t want to end up in a partnership with a company that could potentially degrade your own reputation or occupy your time unnecessarily.
• Determine the level of acceptable risk. Depending on the type of relationship you are considering, there can be a certain degree of risk – both to your own company and to your partner. Try to structure your agreements so there is minimal risk to both parties. Depending on your business model, you can find partners whose complementary areas of expertise will ultimately benefit your own clients, and vice versa. You can get creative with things like determining whether to build in terms surrounding minimum thresholds or exclusivity. When it comes to partnership agreements, there is usually not a “one size fits all” approach.
• Can the partner extend your brand? We all know business success is directly connected to who you know. Partners with vertical brand relationships outside of your primary market can act as an extension of your own team, building brand awareness and sales with clients in sectors that you may have not otherwise engaged. These partnerships can be invaluable in boosting company reach and sales, especially when it comes to the international market.
• Will the relationship be mutually beneficial? This may seem like a no-brainer when entering any kind of partnership, but it’s worth calling out. What efficiencies does the partner bring to the table that will directly benefit your own clients? What benefits does your product or service provide that will directly benefit your partners? The partnership must be mutually beneficial to the core business of both companies, and leave both companies more successful than they would be without the partnership.

These are some of the basic considerations to keep in mind when you are selecting new business partners. With the rapid movement of the cannabis industry, those who develop dependable and mutually beneficial relationships with other businesses will have the best chance of continued success. Choose wisely.