Marijuana Business Magazine September 2019

September 2019 | mjbizdaily.com 121 from the outset as well as clear goals can help to prevent rifts with your partners. Ryan Abernathy started Seattle-based Xtracted Labs with two partners and had a third come in shortly after. At this point, he has bought all of them out and is the only shareholder at Xtracted, as well as his intellectual company, Traction Holdings. He recommends putting in place a clear operators’ agreement with any business partners to protect and prioritize the wellness of the business. “In the beginning, it can seem like everyone is on the same page with the same intentions,” he said. “Time, the required work for a startup to be successful, and situations can change that.” Because of nondisclosure agreements, Abernathy declined to provide details regarding the individual situations. “I will say that over the years it takes to build a stable business, people’s individual hopes, goals and dreams may vary or drift apart from the original mission,” Abernathy said. “It is important to include provisions to address this in your original operators’ agreements.” The provisions should range from how disagree- ments get settled to what happens if a partner wants to move on— or even what happens in the event of the death of a shareholder. “It’s easy to download generic documents and save a bit on a lawyer, but this may end up costing you huge down the road, depending on how your business evolves,” he added. From the start, Abernathy tries to imagine best-case scenarios, worst-case scenarios and anything in between, then address those in writing via an agreed-upon contract, operators’ agreement or other legal document. “Communicating these potential outcomes with individuals can be challenging, but it is always an easier conversation to have when things are going well up front rather than down the road,” Abernathy said. “These days, I am much more prudent when entering into any kind of deal, let alone partnership.” Shawn DeNae, CEO, Washington Bud Co., Arlington, Washington Know how your products stand up to others on the market. Quality does eventually win out over low price, and you must factor in how to make ends meet when the price drops happen. Hold firm if you are a quality-centric brand; it is almost impossible to raise prices if you drop them too low to thrive. Kara Bradford, CEO, Viridian Staffing, Seattle Be careful who you do business with. Make sure they actually know what they’re doing and have a track record of delivering the products, services and technologies your business depends on. While the cannabis industry has a growing number of trusted firms, there is also a proliferation of scammers and fly-by-night operations who tend to target newly legalized states. Jim MacRae, owner, Straight Line Analytics, Seattle Get involved early in your local business community. Join the chamber of commerce, participate in their activities, be a good neighbor and get involved with your local legislators and regulators to get laws and rules that enable your business to thrive while allowing your community to gain the benefits of a vibrant new industry. Jeremy Moberg, founder and CEO, CannaSol Farms, Riverside, Washington Lower your expectations, all of them. There are two groups of businesses in this emerging industry, and each operate very differently. There are those that are well funded and are playing the capital-funding merry-go-round, and there is everyone else. Assuming you are not one of these well- funded operations, then the best advice is to live within your means, lower costs and find your niche to profitability. I have seen many operations fail, and many of them spent too much money before they realized they had failed. Bob Ramstad, owner, OZ. Recreational Cannabis, Seattle Honestly, I don’t recommend to anyone to get in the market at this point. There are so many players that price pressure is ridiculous, and I think all the real money has been made already. I give this advice to friends, family and colleagues who ask for it, so I might as well share it with your readers. JimMacRae. Courtesy Photo