How to Find Your Niche When Starting A Cannabis Business

Gregg Greenberg is the co-founder and co-CEO of Everything But The Plant, a B2B ancillary eCommerce marketplace that sells everything you need to build, run, and grow your cannabis business. 

There’s no longer any question about it — cannabis is big business. In 2018, the U.S. cannabis consumer spending eclipsed $10 billion, with projected revenues for 2022 expected to top $23 billion. Gains like this mean you get to sell in a diverse market with a variety of enticing products and services. 

And, all this growth comes despite the continued federal prohibition of the industry’s staple product. As more states come around to legalizing cannabis and with Congress now debating the end of the federal ban, the industry’s prospects continue to brighten.


It’s definitely time to break into the cannabis industry. 

If you’re struggling to get started or just looking for inspiration, you can use the following steps in this guide to find your cannabis niche:

  1. Identify the cannabis facet that best exemplifies your business model and/or product line
  2. Find your niche within this facet
  3. Narrow your focus to ensure your marketing efforts effectively target the right audience
  4. Avoid common mistakes
  5. Review the top niche markets and leaders for inspiration

Facets of the cannabis business

Source: Unsplash

Before settling on a specialization in the cannabis industry, you should be familiar with the two primary types of businesses in the field: cultivators (dealing with the growth of the plant) and dispensaries (which do the selling).

However, these two are far from the only facets of the businesses operating within the industry. It includes:

  • Laboratories that deal with product testing
  • Value-added producers who create concentrates and edibles
  • Industry-specific data platforms
  • Extractors
  • A litany of professionals, such as marketers and attorneys

Suffice to say you can broadly break down the industry into two spheres, referred to as “plant-touching” and “ancillary”:

  • Plant-Touching Businesses — If you are passionate about the medicinal properties of cannabis, you will probably want to work within a sub-sphere of this category. Professionals in this sphere, handle the cannabis plant itself, through cultivation, processing, distribution, or sales. These are the businesses that most people closely associate with and think about whenever they imagine the cannabis industry. They are usually subject to strict government and industry regulations, and they must navigate complicated licensing processes to get started.
  • Ancillary Businesses — These are all the other businesses that support the actual growth, processing, and distribution of cannabis products. They include data platforms, point-of-sale systems, Ag-Tech companies, digital marketers, accountants, attorneys, payment processors, and more.


Depending on numerous factors, but especially your passions, skills and interests, your niche will lie in one of these two broad spheres. Finding your niche can allow you to reap the benefits of a low competition market. 


Find your cannabis niche

As an entrepreneur looking to enter the lucrative and promising cannabis business, you need to figure out where you fit in the industry. The key to any small business’s success is identifying a niche to exploit. By doing so, you avoid a common mistake many business owners make: going too broad with your products and market appeal.

In case you’re scratching your head or still having a hard time “finding your niche”, you can use the following steps to get on the right track:


  1. Determine your passions and interests — It’s simple — make a list of your top 10 interests. For example, cooking, music, nature, movies, etc.  
  2. Find problems you can solve — Make a list of problems you can solve. Next, you need to try to discover if there is an overlay between cannabis, problems, and interests. To do this, you need to understand your target audience. How old are they? Do they smoke? Maybe your audience loves to smoke flower but hates the way their hands smell afterwards. Your passion in chemistry inspires you to make a hand lotion that removes the smell of marijuana from skin. Get the idea?
  3. Learn about your competitors — To find your unique specialization in the cannabis industry, you’ll want to analyze the competition carefully. Is there room for you to grow? Be sure to check out the social media accounts of cannabis businesses in your target area to get a better understanding of the market. Remember, competition isn’t necessarily a bad thing. In fact, it’s indicative of a profitable market.


And, for further inspiration here are a few examples of cannabis companies that found success by finding their niche:


  • EazeEaze is a California-based company that created an innovative app in 2014 to help residents procure marijuana more easily. Today, it is referred to as “the Uber of Weed.” It has expanded to serve users in more than a hundred cities across California and Oregon.
  • KushCreams — Featured in Time, and National Geographic, KushCreams has tapped into a niche cannabis market by selling medicated lotions and creams for sensitive skin. Handcrafted in Gig Harbor, Washington, this unique product is intended a) for people who want a lotion b) people who want a medicated product c) who have sensitive skin. Notice that KushCreams has narrowed their niche 3 times — they’re not just selling a lotion, they’re selling a medicated lotion, and it’s not just for the average person, it’s intended for people with sensitive skin. 
  • Badfish Extracts — Okay, so you’ve probably heard of lotions before — but how about beef jerky? Founded in 2014, Badfish Extracts initially discovered its niche selling premium concentrates. Today, they have an eclectic product line that includes the popular infused beef snack. Their success can be attributed to their commitment to both quality and diversification. Medicated jerky ftw!
  • AuBoxAuBox, is a luxury cannabis subscription service that delivers premium and unique products to your door every month. Boxes may include THC infused bubble-gum, intimates, edibles and more. 

Reef Jerky Source: Badfish Extracts, Palm Desert, CA

The examples used above found success because they were not afraid to think outside the box. If you can narrow down your focus, you might discover a new THC delivery method or fun product line. Using its delivery service as a starting platform, Eaze has expanded to offer other services such as EazeMD, which provides users with resources as well as medical marijuana card guidance. 

Finding your cannabis niche does not mean that you cannot experiment or venture into other areas. It also doesn’t mean that you cannot change your area of specialization if your selected field does not seem to be working out. Instead, a niche is your starting place. Think of it as somewhere to begin building your foundation.

Once you’ve found your niche, it’s time to turn the dial and really narrow your focus. 


Narrow your focus

Suppose your chosen area is recreational marijuana. Who will be your target audience? Millennials or baby boomers? Smokers or nonsmokers? If you are passionate about cooking, you might like edibles or extraction.

Beyond the services or products you offer, you can base your niche on a variety of other factors including:

  • An area of operation (local, national, state-level, etc.) — For example, let’s say your store is the only cannabis business in town that sells infused gummies — that’s a niche within your area of operation. Depending on the uniqueness of your product, there could be an exploitable niche cannabis market within a town, city, state, etc. And be sure to stay abreast of any state or federal changes. If you know that cannabis laws are about change in a proximate area to your business, there could be an opportunity to seize the market. 
  • Your target audience (specific ages or interests) — There are certain products that are intended for specific age groups. For example, the company nectarbee sells a wide range of topicals and creams designed to alleviate joint and muscle pain. These products are targeting older people who are more prone to suffer from such ailments. Other businesses focus on selling products to alleviate menstrual discomfort. 
  • The price point of your products (high-end, affordable, budget-friendly) — The quality and pricing of your product is vital to targeting the right demographic. Are your products for high-end users? Average people? Take Shine Papers for example — their specialization in the cannabis industry involves selling 24K gold rolling papers intended for the super wealthy (or those who wish to appear as such). Northern California brand, on the other hand, is all about affordability — they sell 8ths of flower for $22.99. 
  • How to sell or offer your products or services (e.g., via subscription or membership) — Lastly, you need to determine how you are going to sell to your audience. Is your operation brick and mortar? Are you running a delivery service? Do you intend on conducting online business? Maybe you want to sell edibles from a bakery or food truck? CBD treatments at a spa? Believe it or not, how you sell your product is directly linked to your target demographic. The same person that shops for baked edibles around the corner does not necessarily want to buy from an online vendor. 

One of the best ways to narrow your focus is to ask questions — of yourself, the industry, your target audience, the future of cannabis, etc. 

Additionally, you should be looking at non-cannabis markets that can be complemented by marijuana products. 25 years ago, few people would have thought that cannabis spas or beef jerky would be a thing. Look at popular markets and ask yourself, Is there a cannabis niche opportunity here? It’s amazing how many industries can mesh with cannabis. 


Avoid common mistakes

Having a niche means less competition. But it’s easy to get distracted along the way. And if you’re not careful, you may fail to sidestep the various legal and business pitfalls of the industry. 

To help you stay on track, avoid the following mistakes when finding your niche in cannabis:

  • Failure to change/adapt to market trends — Given the market saturation, choosing a specialization within the cannabis industry is vital to success. But this does not mean that your business is a rigid, unchanging entity. On the contrary, you need to be ready to change and adapt to market trends. For example, let’s say your niche is selling infused gummies in an area saturated with concentrates and flower. Suddenly, everyone else in town starts selling gummies too. You need to gage the success/pricing of your competitors and adapt accordingly. Maybe your gummies are vegan or gluten free. Or maybe you expand to lollis, mints, and chocolates.  
  • Narrowing your target audience too much — Starting a niche cannabis brand requires research and patience. While it is true that you want to narrow your focus, if you overdo it, you may end up hearing crickets instead of cha-ching during your grand opening. After choosing a sub-category within a facet of the cannabis business, you need to do your own research about potential niche markets. First and foremost, you must answer this question: Is there a need and/or want for your intended cannabis product/service? A good way to find out is to engage with your target audience directly. You can use social media, your blog, or Reddit. Be careful however, that you do not divulge your “secret sauce” while interacting with potential customers. Remember, your competitors are likely using the same  channels as you. 
  • Failure to network — Finding your cannabis industry niche does not mean that you should isolate yourself from other marijuana business owners. Instead, you want to form a network of cannabis entrepreneurs, educators, enthusiasts, etc. This can provide many opportunities to cross promote products, learn from others, and attract new customers. If, instead you choose to be a lone-wolf, you may find yourself struggling to gain exposure for your unique product. And you will still have to compete with the rest of the pack. 

One of the keys to starting a successful cannabis business is finding your niche. However, if you go too broad or too narrow, you risk losing customers. Instead, you must carefully find a balance, and be ready to adapt to market changes on the fly.

If you’re still feeling unsure about your specialization, don’t panic. Let’s look at the top niche markets in the cannabis industry for further insight. 

Review top niche cannabis markets 

Source: Unsplash


When in doubt, consider what other successful entrepreneurs are doing. Since new products, trends, and services are constantly being discovered, be sure to keep your eye on developments that arise in the industry. 

And, you can review the following top niche cannabis markets for inspiration:

  • High-end concentrates — For smokers, there’s flower and concentrates. Over the years, the variety and potency of concentrates has increased substantially. High end concentrates like wax are becoming more popular with the prevalence of dabbing and dabbing tools.  
  • Vegan or organic cannabis — While some consumers do not care where their cannabis comes from, there is a growing demographic that only wants organic cannabis that is certified pesticide free. Similarly, when it comes to edibles, there are vegan and gluten free markets you can also exploit.  
  • Unique edibles (cakes, candy, hot sauce, etc.)Edibles have been around forever. But instead of making the same old brownies, gummies, and chocolate bars, why not branch out and create something new like THC infused edible crickets? Or Hot sauce? 
  • Discounted bulk cannabis products — Maybe instead of selling the next new lotion, tincture, or edible, your angle is becoming the CostCo of cannabis in your area.  
  • Spa services that target women — An emerging niche cannabis market that’s definitely worth looking at is cannabis in spa centers. Whether used in facials, massages, or other treatments, infused oils are quickly becoming the next big trend in the wellness industry.  
  • Distribution — Alternatively, your business may revolve around the supply and demand aspect of the cannabis market. 
  • Products for cultivators — When the gold rush hit, some people risked it all to pan for treasure, while others sold the screens for sifting. Maybe your angle during the current green rush is to sell grow tents, nutrients, etc., to cannabis growers. 
  • Industry-specific consulting services and cannabis company advice — If you have a background in pharmaceuticals, business, or law, you may find an exploitable niche by offering cannabis specific consulting services. For example, the American Cannabis Company focuses entirely on helping cannabis startups and seasoned veterans alike navigate industry pitfalls and find success. 
  • Specialty packaging solutions such as protective or childproof — For cannabis products, a major concern for many retailers and families is safety. Edibles, lotions, or tinctures can be difficult to safeguard. Maybe you have the next best cannabis safety package or lock box?

If you’re still niche-less, relax. Write down the above list and create a mind map for each market. Branch off ideas and interests as they come to you. And remember to give it time. Walk away from it, ignore it — you’d be surprised at just how quickly inspiration can strike when left to rest. 


Final thoughts

Finding your cannabis niche is integral to the success of your business. Remember, the more refined your product, the narrower your focus, the less competition. But, don’t narrow your focus too much or you won’t have any customers! 

If you feel intimidated, overwhelmed, or unsure of where to start, remember the 5 key points in this article:

  1. Identify the cannabis facet that best exemplifies your business model and/or product line
  2. Find your niche within this facet
  3. Narrow your focus to ensure your marketing efforts effectively target the right audience
  4. Avoid common mistakes
  5. Review the top niche markets and leaders for inspiration

The cannabis industry shows no signs of slowing down anytime soon. The market is exploding, with new products and services popping up every few months. And as regulations and laws change across the country, even more opportunities lie just over the horizon. While you may be eager to get started, doing a bit of research now can mean the difference between success and failure in the future. 

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