When a cannabis testing company with three labs wanted to expand its operations, it faced a daunting challenge. The federal ban on interstate marijuana shipments meant they must open their labs in each state, requiring time and money. But that wasn't their only option. Instead, they decided to license their processes, name, and technologies to partners already operating in different states.
The cannabis testing company has licensees with branded labs in Alaska, Hawaii, Maryland, Pennsylvania, and Washington DC and recently announced license deals in Los Angeles and Arkansas. They focus on training and support to ensure the consistency and quality of testing results across all their licensed labs.
Cannabis is one of the fastest-growing industries. The US cannabis market within the legalized states is estimated to exceed $14 billion. It is projected to grow to over $30 billion by 2025. But unlike most industries, it isn't legal in many parts of the US. The industry is highly fragmented because of the regulatory environment, with many companies operating in limited geographic areas.
That's why licensing is a perfect strategy for the cannabis industry. Since most legal cannabis products can't cross state lines, it must be manufactured and distributed within a specific territory (state). Licensing lets you craft agreements to fit the exact geographic regions where your cannabis products or services are legal. Your cannabis business can grow on a “national scale” and generate royalty revenue from individual licensees within their legal territories.
As global demand for cannabis products increases, more companies are pursuing licensing agreements to capitalize on the fast-growing markets. It's also the only way to grow and remain competitive in a highly regulated and fragmented market such as the US. Developing and acquiring intellectual property is one of the most critical strategies for cannabis companies. IP gives you more than just market protections and a competitive edge. IP also allows you to scale your cannabis business “nationally,” generate more revenue, attract investment, and enhance your company valuation for an exit.
So the question is, how do you use licensing to scale your cannabis business? Learn how by signing up for the free workshop replay, IP Licensing Strategies for Cannabis Companies. During this workshop, you'll learn what cannabis IP is, why the demand for cannabis IP is growing, and how to use licensing to capitalize on market opportunities to expand your cannabis business.
Click this link to sign up for this free workshop.
Rand Brenner is an IP professional whose passion is helping inventors, startups, and businesses of all sizes use licensing to turn their IP into income-producing products, services, and technologies. His decades of experience run the gamut from medical devices to food technology to consumer products. He's licensed some of the biggest Hollywood entertainment blockbusters including the Batman Movies (1 and 2), and the number one kid's action TV show, the Mighty Morphin Power Rangers. Rand speaks about licensing and is a featured speaker at investment conferences, trade shows, colleges, and startup events. His first book, Hidden Wealth: The Money Making Power of Licensing was released in 2019 and is available on Amazon.com. He's also a published writer with articles appearing in several prestigious trade magazine including The Licensing Journal, Intellectual Property Magazine, and License India. Rand also mentors at the Cal State Fullerton School of Business and Economics and is a judge for their startup business plan competitions.