Cannabis startup incubators play an important role in shaping the industry ecosystem, and this can directly impact consumers and patients treated with medical cannabis.
In today’s blog, iCAN Director of Acceleration, Hayim Raclaw, discusses the importance of incubators for cannabis startups and explains what a good quality incubator should include in its services.
What is an incubator?
Incubators are dedicated to steering newly created businesses towards sustainable, long-term success. They do this by offering technical services, mentorship, and expert guidance. Many first-stage startup companies lack the resources, experience and networks necessary to scale up in a competitive market. Incubators help startups gain leverage by offering services and capital to propel businesses forward.
Another important role of incubators – especially in the cannabis space – is their contribution to the culture and environment, or ecosystem, of the sector. While building and accelerating sustainable businesses benefits the entrepreneurs and their investors, a healthy ecosystem benefits the entire industry.
For cannabis startups, incubator services will accelerate success but will also ensure quality control and sustainable scaling.
A Four-Pronged Cannabis Startup Incubation Model
Not all incubators are created equal. Cannabis startup incubators offer ongoing mentorship and work in partnership with budding cannabis businesses. By focusing on bespoke service models tailored to each venture, incubators accelerate success while protecting long-term health and viability.
Quality cannabis startup incubators offer four spheres of assistance to propel startups towards sustainable profitability:
1. Know Your Markets
Incubator ventures receive exposure at global events, industry conferences and investor meetups. Through attendance and participation in premier, world-leading cannabis industry conferences, incubate companies gain an advantage over competitors with facilitated market presence. Incubator mentors assist in defining markets and resolving marketing pain points for maximum growth.
2. Develop Your Business
Incubator ventures collaborate with a select group of experts from sectors across the cannabis industry. Professionals with proven track records provide guidance from initial business planning and financial modelling, to key recruitment and revenue strategies.
3. Build Your Product
Incubator ventures access development, technical, and production expertise to identify and select supply chain partners in accelerating development. This stage incorporates clinical validation with relevant partners. Regardless of the development stage of a cannabis startup, a quality incubator will ensure cost-effective delivery, enhanced profitability and product appeal.
4. Find Your Capital
Incubator ventures receive guidance in financing strategy, valuation setting, and pitch readiness from cannabis market veterans seasoned in securing funding for companies in relevant sectors. Assistance includes meeting with key cannabis executives and thought leaders to offer insights, contacts and credibility to the venture.
Structured Cannabis Startup Incubation Process
Any good incubator vets potential ventures prior to entering into an agreement. By focusing on high-value ventures, responsible cannabis incubators reserve services for a select number of quality prospects rather than accepting a high volume of low-potential businesses that require more resources.
Once a new venture is on-boarded, the incubator will initiate an objective-focused process:
Step 1: Venture Assessment
Prior to becoming part of an incubator, ventures undergo a preliminary assessment. Venture assessment considers the venture’s management, product, legal and IP, sales and marketing strategy, and financial situation.
Step 2: Incubation Objectives
At this initial stage, it is critical to articulate desirable, feasible and measurable objectives along a reasonable and attainable timeline.
Step 3: Incubation Action Plan
Incubator and venture management work hand in hand to develop an action plan with a set of deliverables designed to meet the objectives outlined in the previous step. At this stage incubate mentors are assigned to the venture.
Step 4: Incubation Impact
Impact based on successful reaching of objectives is continuously evaluated. Corrective action and next stage planning are implemented as needed to ensure ongoing growth.
The question of whether or not startups in the cannabis space should join an incubator is a critical one. Even more critical is the question of how to choose the right incubator. iCAN Incubate’s structured incubation process guides and supports cannabis ventures with a thorough range of services. We believe in our method, and the proof is in the proverbial pudding: iCAN Incubate is propelling innovation and excellence in the cannabis industry by guiding high-potential ventures to long-term success.
For more information about iCAN Incubate, visit our site and sign up for the iCAN Incubate Newsletter.