Question

I’m doing a paper for my Entrepreneurship class on starting a cannabis delivery service company that will be focusing on delivering cannabis and cannabis related products from growers to dispensaries and/or from dispensaries to clinics in the state of California. In other worlds, we are only doing business to business deliveries and not to consumers. I need help addressing and answering everything in the picture (industry analysis) including the STEEPG analysis which includes: social, technology, economic, environmental, political/legal, and global factors.

Industry Analysis As an introduction to the Industry Analysis section of your document, summarize the industry in which your venture will be competing. Next, describe any current and emerging technological factors, economic influences, socio-cultural factors, and political factors/regulatory issues, etc which can/will impact your venture, and add how seasonality impacts the industry sell cycle (STEEPG Analysis). Make sure and size the market that you are entering including growth rates and typical profits. Make sure and size as able the total market, your market segment and the niche that you will use for entry. Discuss feasibility and how you have validated your value proposition. Use data and graphics to support and summarize your analysis.

Answer 1

Introductio Summary

The industry in which this venture will be competing in Cannabis Industry itself. Cannabis has proven to be useful in treatment for various medical conditions and ailments.This market has positive sign of growth in future as Americans spent aroud $6.5 billion on recreational and medical cannabis in 2016.

Factors that will affect this venture (STEEP)

Social Factor

Many social factors including drug related crime , drugs,overdose , government action, and the public’s perception of the medical marijuana movement has its impact..If there is rise in numbers of drug abuse cases or drugs reaction the public may fear to accept in and the perception could change very quickly owing to negative results of the cannabies.

Technological Factor

The use of technology for any industry is now an intergral part. The delivery service needs real time update.If the enterprise fails to deliver the product on time then it will impact the business.The use of social media platforms can boost the sales, creating mobile applications , giving 24/7 customer service helps you to be in competition.

Economic factor

This industry has a positive impact on economy as it creates many creates manufacturing jobs, utilities or even government jobs.But the support from banks are still lacking somewhere. Many financial institutions resists to support as the cannabis are still illigel on federal level but the federal government has given nod to banks to work with cannabis businesses in approved states.

Ecological factor :

The agricultural cultivation of the cannabies will go up as the industry is growing at good rate. The farmers will be benifited.But this growth will affect the environment as there will be rise in streams diversion, unpermitted soil grading,cutting down of trees, heavy usage of fertilizer and pesticide and huge garbage dumps.

Political Factor:

Since you are in Calfornia ,it is legal to deliver cannabis to those who has medical necessity .For this they need to have their legal cards. Cannabis are legalised in 29 states and the District of Columbia for medical purposes .Changing political scenario could affect the industry while framing policies. This will have a strong impact on the business.

Size and Growth

This industry has huge potential and is expected to reach $3.7 billion in 2018 alone,& $5 billion is expected in 2019. It is projected to grow at a compound annual rate of 17%. The legal cannabis market will create more than a quarter of a million jobs.

Segmentation & entry

Since it is an B2B business, the retailers would be the final customer for this business. To enter the market or start the business you will require a license in California.

The licensing process, starting in January of 2018, includes the following stages:

1.Preliminary eligibility determination ( $3,258.00 fees)

2: Initial ranking with a of fees: $701.00

3: Second ranking with a fees of $1,790.00

4: Public Meeting and City Council Final Selection fees $1,937.00

Feasibility

This business is highly feasilble in california. Cannabis delivery services in California can earn exceed $1 million annually. The cultivation of cannabis is increasing ..The positive results of the medicine has increased the acceptance of the people .This business has great scope . The industry has already employed around 1.5 lacs workers and nearly 90,000 are in plant-touching companies.

Following image will show the legal cannabis spendings and projections of North Americans

North American Legal Cannabis Spending 2015-2021 $25 BILLION $20 BILLION 14.9B 10.7B $15 BILLION 7.6B $10 BILLION 4.2B 2.5B $5 BILLION 1.8B 970M 4.0B 2015 Medical S0 4.9B 5.68B 7.0B 7.0B 7.3B 7.7B 2016 2017 2018 2019 2020 2021 Adult Use