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There is an existing and rapidly growing nascent industry with no household names, cemented market leaders or nationally recognized products. The industry has no clear brand, little consistency in product or customer experience and yet it is predicted to exceed $55 billion in 2019 even with a product that isn’t available in all states.
That industry is legal cannabis.
The wildly-enticing, untapped potential of cannabis is often speculated on by those outside the industry who are watching for an opportune time to penetrate the market. Online publications and influencer blogs routinely throw their two cents into the ring, but their perspective lacks immersion.
The truth is, nobody outside the industry has a good enough grasp on the mechanisms at play to speak confidently, and those who have industry experience hold the trade secrets to success tightly guarded.
ONE Cannabis (ONE) is emerging as the exception to that rule and has developed the world’s first extensive cannabis franchise system to usher entrepreneurs into the budding industry. The Denver-based franchisor is making a name for itself as the bridge connecting the two previously disconnected worlds of cannabis and franchising.
After announcing the franchise offering in 2018, ONE Cannabis quickly signed five franchise units and then executed a $12 million transaction that brought together 13 different companies under the ONE Cannabis name.
The company’s access to scalable resources and award-winning, quality product combined with a decade of experience running profitable and compliant legal dispensaries allows it to maintain the level of consistency that is so important in franchising.
The team of both cannabis and franchise industry veterans at ONE Cannabis command the most direct and plausible route into the market for those who lack the personal experience necessary to succeed.
“Franchising in cannabis has never been done before,” said ONE COO Mike Weinberger, who has nearly two decades of franchise experience and a reputation for growing nationally recognized brands.
“That’s a good thing for us, because we’re good at it. Our mission is to create an inclusive company, one that can’t profit unless we bring other people with us. As a franchise, we can create a completely new pathway into cannabis that benefits everyone.”
The true draw of ONE Cannabis comes from its duality of prowess. CEO Christian Hageseth has been operating in the legal cannabis industry since its inception in Colorado, building out Green Man Cannabis, a connoisseur-grade retail and cultivation brand with a devoted customer following.
He’s partnered with others in cultivation and retail ventures in multiple other states and picked up multiple Cannabis Cup wins and an Industry Trailblazer award from High Times, two of the most reputable awards in cannabis.
At his side is Weinberger and ONE’s franchise team, a seasoned collective of franchise pros that have sprouted hundreds of units worldwide.
“There are companies that have a solid franchise record, and there are those who know cannabis,” said Hageseth. “We’re really the only ones who have proven we can do both.”
According to ONE’s financial model, based off previous ventures and state averages; franchisees could potentially land well-above the typical yearly retail revenue. ONE-operated locations average almost twice as much as the $3 million gross sales of the average Colorado dispensary.
The inherent scalability in the franchise model also stands out in an industry that’s notoriously difficult to expand in, adding to the company’s list of differentiators and franchisee benefits. A typical franchisee can expect a level of support that ONE says doesn’t exist anywhere else in the industry.
“Profit margins like this typically aren’t for sale,” Hageseth said. “But we see it as mutually beneficial – a way for us to succeed with as many people as possible, grow the brand, and help people enter the industry.”
On paper, franchising seems like an obvious fit for an industry as fragmented as cannabis. However, the amount of inconsistencies that exist across the nation are as noteworthy and can be nearly impossible to navigate.
Tax regulations alone are enough to make most multi-unit franchisees hedge their bets and turn to safer harbors. There are many hurdles, to consider: product can’t cross state lines, the licensing process is extremely competitive, site selection is a headache and many more. Because of the hurdles, nobody in franchising has had the nerve or expertise to dive down deep enough to pry open the clamshell and get the pearl.
Justin Livingston, ONE VP of Franchise Development, said it’s time to go swimming.
“The difficulties you hear about are very real, but we mitigate the risk our franchisees take,” Livingston said. “Seasoned franchisees are in the best position to grow with us, and they should be doing a lot more than just paying attention.”
Potential franchisees come from different walks of life but share one common attribute— they aren’t experts in cannabis, but they want in. Partnering with ONE Cannabis is their way of tackling the monumental considerations unique to the cannabis industry.
With extra industry considerations comes extra support. ONE Cannabis franchisees are guided through every step of the process, from compliance guidelines and Standard Operating Procedure implementation to banking solutions and employee selection.
Since ONE’s first franchise agreement, the company has expanded its team to around 100 employees and expects to bring on another 30+ by year’s end. With the franchise model in place and an increasing depth of manpower, the company said it’s confident it will make good on its promise to inspire confidence in cannabis for all.
“You can only get this level of understanding through an exhaustive amount of trial and error, which we lived first-hand for the past decade,” said Livingston. “That’s what we really offer — anticipation and understanding you can’t get anywhere else.”
At a glance
Number of franchised outlets: 5
Location of units: Colorado
Investment range: $750,000-2,500,000
Minimum required capital: $750,000
Contact: Justin Livingston – email@example.com – 720-222-0500
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