As the country begins to get ready for the recreational avalanche next year, Canadian canna entrepreneurs are starting to organize…
Even better, they are also starting to form accelerators to encourage more start-ups in what is going to be a dynamic start up environment, not only nationally but internationally.
On October 4, Leaf Forward became the first Canadian cannabis focussed accelerator but it is unlikely to be the last. The Accelerator also hosted two founders’ classes in which 12 canna start-ups took part. These were businesses across a range of the cannabusiness space, from growers and extractors to ancillary end products. Mentors range from a wide number of fields and companies.
Until now, Israel and U.S. states like California and Colorado were the only places where there has begun to be organized focus on encouraging the cannabis start-up sector. After all, not too long ago, such small businesses were illegal.
Incubators in these states have only continued to grow – even though the cannabis business continues to be without federal legality. And even though institutional investors still shy away.
Canada’s market, of course, is not limited by such issues. And that is no doubt why the backers of Leaf Forward see such potential in launching this kind of effort now.
Why Are Accelerators Important?
Accelerators are vitally important to the growth of new business. Their programs help founders move forward in areas where they may need help or advice. Frequently, after going through such programs, founders also find they are more successful in asking for money. Or finding the right partners. Or even co-founders.
When it comes to cannabis, there is also, particularly now, a sense that the old rules are finally falling away. What the new ones will be, however, is still not set. As that environment formalizes, new business models and ideas will be more needed than ever. Accelerators, and their closely linked twin incubators, also help investors if not the industry find those new ideas, and nurture them towards the market.
What Kinds of Specific Services Do Accelerators Offer?
Accelerators can offer free or reduced cost working space, legal and accounting help, and strategic partner introductions. They can also help with finding the right Angel or early investor. Sometimes the services they offer are indistinguishable from “incubators.”
Depending on the accelerator, such services are either offered for free, or for a percentage of equity in the company. Some accelerators also offer a cash bonus to live on during the period of acceleration.
It really depends on the accelerator. Finding the right one takes work and time. And while it is not necessary to look only for a cannabis-focussed incubator, their growth suggests a new industry is hungry for expertise and guidance.
What Kind of Companies Can Apply?
If your idea is cannabis specific, you believe you have a market, and a passion for what you want to do, the sky is the limit. The vertical is going through a huge growth spurt and all sorts of industry specific services, goods, equipment and ideas are needed.
You do not need a business plan, necessarily. Check the requirements of each organization you apply to. However, the more prepared you are, the better you will stand out from the competition.
At minimum, you need to explain in a couple of sentences why your idea has wings. This is called the Elevator Pitch.
It also helps if you are not starting from scratch and you are targeting an thus far untapped part of the market. And at this point, that territory is large. Do you have an audience on social media? Do you have instant customers? Can you prove you can get them?
A website, with at least a high concept and a list of the team, is absolutely a good idea.
[Image credit: Flickr]