How We Started A $1.8M/Year Cannabis Consulting Agency

$150K
revenue/mo
2
Founders
9
Employees
product
American Cannabis...
from Denver
started February 2012
$150,000
revenue/mo
2
Founders
9
Employees
647K
alexa rank
3.21K
followers
market size
$33.1B
avg revenue (monthly)
$183K
starting costs
$17.2K
gross margin
40%
time to build
7 months
growth channels
SEO
business model
Consulting
best tools
Slack, Quickbooks, Instagram
time investment
Side project
pros & cons
35 Pros & Cons
tips
6 Tips
Discover what tools Ellis reccommends to grow your business!
Discover what books Ellis reccommends to grow your business!
Start A Cannabis Business

Hello! Who are you and what business did you start?

My name is Ellis Smith and I am the co-founder of American Cannabis Company. ACC is a full-service consulting firm supporting the industry for over 9 years. We specialize in putting together the pre-application tools needed to raise capital as well as write winning applications in competitive markets. We have designed and built over 1.7 million sq ft of growing space to date with another 60,000 sqft under construction currently.

We are making about $150,000 a month as a company with our sites set on acquisitions of grows and dispensaries in 2021. This will increase our revenue to well over $500,000 a month.

how-we-started-a-1-8m-year-cannabis-consulting-agency

What's your backstory and how did you come up with the idea?

I have been growing cannabis since 1997. I spent 5 years in the specialty cut flower industry which exposed me to large-scale plant production. In 2006 CO passed medical cannabis and I quickly became a caregiver supporting patients with debilitating diseases. In 2009 the state of CO changed the rules for the medical cannabis market and put regulations in place. I had to leave my basements and partner with a dispensary and find a zoned warehouse to continue my pathway in legal cannabis. I partnered with The Village Green Society where I was the head of cultivation. I sold my equity in the company in 2012 to start the American Cannabis Company.

My founding partner in American Cannabis Co. was also a partner in VGS. We saw the new emerging markets opening up and we knew we could help support some of these news businesses coming online like CT, MA, MN, and FL. We were the first consulting company in cannabis so we knew we were ahead of the competition when we started.

Set high hard goals with supporting clear goals to ensure your success.

Since CO was ground zero for regulated cannabis we felt that we had learned from our experiences to go out and assist these new markets that were emerging. We validated our ideas quickly as we started speaking to customers looking to get into cannabis. There was a huge need for help with limited access to professionals that could support the new industry.

I was fortunate enough to be able to grow cannabis at home as a caregiver while starting ACC. This allowed me the financial freedom to focus on developing the business and getting it off the ground. Our web presence was key early on and allowed us to penetrate markets quickly.

Take us through the process of designing, prototyping, and manufacturing your first product.

My partner had a background in SEO marketing so we developed our website with an emphasis on using this to drive traffic to our site. It worked and we quickly began speaking to potential clients in the US as well as CAN. To develop our suite of services we already knew what was needed for the most part.

Since our focus was start-up businesses there is a basic understanding that you need financial models, business plans, etc. We learned that we need to do design work in parallel to ensure we know all costs going into the projects and ensuring the financial models reflect all details required to run the business.

The learning curve for us was learning how to scale someone's cultivation idea and be able to break down all costs. This is basically designing a cultivation facility and all of the details with the fertigation, irrigation, HVAC, etc. This is where true knowledge is needed to support these new endeavors. This is where we shined and outperformed our competition.

Our first large-scale project was in MA where we built out a 50,000 sq ft grow and extraction site. We had to bring in many different specialty service providers for the project. Managing all of these different subcontractors was a challenge. There is a huge knowledge transfer from consultant to build team and vice versa.

Luckily there were few mistakes made and the ones made were great learning opportunities to grow on. This 1st project of ours has now expanded to be 100k sq ft of cultivation and a key player in the MA market. It was a great project for our team to learn and grow from.

how-we-started-a-1-8m-year-cannabis-consulting-agency

Describe the process of launching the business.

Our launch strategy was simple. Use SEO to drive traffic to our website and generate leads through this channel. Since we were the 1st consulting company in the space we quickly got Google rankings and have maintained this ranking for 9 years. Within days of launching the site, we were able to generate leads and find business.

Since we were solely a consulting company our overhead was low. My partner and I did all web development in-house and this cut down on outside expenses. Since new markets were coming online our fee structure was very high. Our first landed clients quickly moved the needle financially for us and allowed us to take salaries within the 1st 6 months of starting.

Some of the lessons we learned took years for us to realize. Our website and SEO worked fine initially but over time as we hired professionals to support this part of the business we realized that these pros could have saved us time and energy on putting together the site and how it functions.

We also began to hire accountants and other service providers that quickly made our lives easier by having professionals put processes and procedures in place. This allowed us to work more on the business vs working in the business which limited our growth… Without a budget to pay these professionals we had to bootstrap it ourselves and use the knowledge we had at the time.

Since launch, what has worked to attract and retain customers?

As your company grows make sure you do not grow too fast where you are unable to keep up. It’s ok to turn down business opportunities if you and your team do not have the bandwidth to support a client. I see businesses make these mistakes and ruin their brand and reputation by taking on too much and putting out a subpar work product.

Make sure your team is capable of expansion and you can onboard resources as you scale. Starting off using sub-contractors is a great way to reduce overhead while supporting your business. Once you can justify an FT employee then you can hire and reduce the overhead of subcontractors.

Our website traffic is what draws 90% of our leads. As I mentioned before early on we established ourselves with our SEO and have maintained our ranking in the top 2 for β€œcannabis consulting”. We still are having a hard time measuring our Social Media success. We do put 6 figures a year toward our online presence but not sure how effective it is. We are constantly looking for ways to improve this area but also looking at reducing our spending on it and not putting so much emphasis on it.

Read a ton of books on the topic you are interested in. But also read books from other industries that will pique your interest so that you can connect lateral ideas from other industries to your industry of interest.

We are lucky to have recurring clients call us with their needs. Whether it’s applying for a new application in a new market to assisting with their existing business and helping solve issues with their current businesses. We have a strong track record and our reputation has been proven time and time again. We get lots of referrals this way as well as repeat business. If you know your craft they will keep coming back.

How are you doing today and what does the future look like?

As a public company, our business information is all publicly available. We had a loss for 2020 as COVID stopped many projects were working on. Since we are public I am unable to share any info for what’s happened with 2021 in the last 3 months as it’s not public information to share yet.

As a company today we are still 100% committed to consulting. The 2020 Election saw new markets come online and this has increased our contracts this year to set up for a sustainable year. We are also making acquisitions of grows, dispensaries, and extraction companies in 2021. This will change our model to include operations. This is exciting for our team as we pivot into plant-touching.

Short term goals are to close the acquisition we have in the pipeline. Another goal is to expand our cultivation management program in new markets across the US. Our long-term goal is to keep expanding our acquisitions into new markets. My high hard goal is to reach 3600 employees within the next 5 years.

Through starting the business, have you learned anything particularly helpful or advantageous?

My biggest learning curve was being able to align all of the resources it takes to complete a multi-million dollar project. There are so many moving parts and vendors involved that being organized is key to success. Knowing that mistakes will happen and how you handle them is what will either make you successful or not.

What has really helped me maintain success is learning from mistakes and setting checks and balances for accountability. I am very OCD now with scheduling project deliverables. Using spreadsheets and Google calendars has saved me from making the same mistakes over and over. Taking time to actually sit and think about all aspects of the project has helped ACC to maintain a strong reputation for getting things done properly

What platform/tools do you use for your business?

We use many different tech platforms for our success.

We use Pipedrive for our CRM tool. This allows us to keep track of all leads and current clients. It holds our team members accountable on how often they contact a lead or client and what the current status is of the relationship.

We also use Slack for our project management with our clients. It allows us to communicate in real-time and share docs more easily than email. For accounting purposes, we manage projects and completion through Smartsheets. Great tool for posting product deliverables and managing the timeline of events and when to invoice once complete. Our auditors use this to ensure we have provided a work product to the client for us to earn the revenue.

There a few more software used internally like DEAR inventory tracking, Quickbooks, etc.

What have been the most influential books, podcasts, or other resources?

I read a ton of books on Flow. Steven Kotler has been writing material around this topic for over a decade. These books are about peak performance in the office and life. I just completed a course through The Flow Research Collective called Zero to Dangerous. Basically learning the tools to be a more productive person at work.

For those of you that are looking for more happiness and productivity from life, I highly recommend checking FRC and the books that Steven Kotler has written.

Advice for other entrepreneurs who want to get started or are just starting?

Read a ton of books on the topic you are interested in. But also read books from other industries that will pique your interest so that you can connect lateral ideas from other industries to your industry of interest. Being an entrepreneur takes Grit.

Grit takes you farther than you think you can go. Tap into the flow and lose track of time and do more in less time.

Creating a daily routine will take you to another level of success. Eat regularly at the same time, go to bed at the same. Find yoga or meditation for mindfulness. Show gratitude. Set high hard goals with supporting clear goals to ensure your success. Be disciplined with your intentions. Move your body with exercise, walking can fulfill this part. Get out in nature to change your mental stimulation, can and will help connect lateral ideas and thinking.

Are you looking to hire for certain positions right now?

We are not hiring currently but I would recommend for anyone interested in working at ACC to view our website and send over a CV/resume with a cover letter explaining the potential position they are interested in and the value they could bring to the position. We are always looking for talented people.

Where can we go to learn more?

-  
Ellis Smith,   Founder of American Cannabis Company
Pat Walls,  Founder of Starter Story

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