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How to Spot a Legitimate Cannabis Company

The marijuana industry could generate over 21 billion dollars in revenue by 2021. This makes legal cannabis one of the fastest growing markets worldwide. These rapid growth rates are attracting entrepreneurs and investors alike. New businesses are entering the space daily. No doubt, it is an exciting time in the cannabis world. While the industry still poses major challenges, thanks to the Internet, it is easier than ever to start a cannabis company. But knowing the difference between a real business and a scam designed to take your hard-earned dollars is crucial and everyday new cannabis companies are popping up. Find out how to spot a legitimate cannabis company and not get fooled by impostors.


Are they transparent?

One way to spot a scammer? A lack of transparency. As soon as you head to a business’s website, it should be clear who they are, what they do, and how to contact them. Suspicious companies will often try to hide these important details. A legitimate cannabis company will offer multiple forms of contact. For example, a phone number or email address. If you notice either of these elements is missing, it is a red flag. Another red flag would be if you email them and call them and never receive a response. Also, pay close attention to the text written. Are there numerous spelling mistakes or awkward phrases? If so, it could indicate that the website was completely outsourced by a foreign company. While not necessarily a scam, be cautious. A legitimate cannabis company will make it easy for you to contact them.

How old is the company?

When assessing if it is a legitimate cannabis company, you will want to consider how long they have been in the business. If a business just launched last week, for example, be a little dubious. Granted, the cannabis industry is new. The recreational cannabis market in Colorado didn’t even exist ten years ago. So the majority of businesses in this space are still going to be less than five years old. However, a company’s track record is telling. The cannabis industry is moving quickly. A company’s actions over the course of even a year can provide valuable insight. As you are assessing a business’s history, take notice of any lawsuits or litigations. These are major red flags and will require further research. In other words, do your homework. Otherwise, you risk jeopardizing your own operation.

What does a Google search reveal?

Take a few minutes and see what pops up on Google. This will help you better assess whether or not a it is a legitimate cannabis company. Pay close attention to what the first few search results reveal. For example, how many outside sources are linking to the business’s website? If a website has other credible sources referring to it, it’s more likely to be the real deal. On the other hand, if the only search results are from that single company, it is best to be precautious. Also, see if you can locate any bad reviews. While illegitimate companies will try and hide negative reviews, they can be found with a little digging.

Does their background add up?

Individuals from all backgrounds enter the cannabis industry. In fact, cannabis seems to attract people with eclectic backgrounds. This is part of what has made this industry what it is today. However, be wary of anyone who does not have a clear past. While there may be a few legitimate reasons why someone could not name a former employer, there should still be a clear track record. For example, if a business owner has said they worked years in the cannabis space but can’t name specific companies, be cautious. Unfortunately, some people in this space will try to hide their past. If you cannot find a clear work history, it is a red flag.

Are they offering outrageous claims?

Is it too good to be true? Companies who are out to make a quick buck will try and lure you in with bold claims.  Beware of businesses that are advertising something they cannot support. With the Internet, it’s easy to write any kind of label that may help sell a product or service. A bold claim could be accurate. However, it should also be verifiable. Ask for concrete examples or sources if you are unsure of the legitimacy of a claim. Any marijuana business operating with integrity will be more than happy to help you.

What do their social media accounts show?

A business’s website is only one reflection of their organization. One way to better gauge a company’s legitimacy is by visiting their social media accounts. Referencing a business’s social media history can reveal a LOT about their operation. For example, how large is their fan base? How long have they had the accounts? Do they allow users to post reviews? Are they active on social media? Be cautious of cannabis companies who have generated thousands of followers but lack a real track record or any activity on social media. Buying likes or followers is unfortunately rampant throughout the industry. Engagement is more important than vanity numbers. See if real humans and businesses are interacting with them on social media. If so, that’s a good indication they are a legitimate business. However, if a business has thousands of followers but was just created last month, steer clear.

Never go into business with someone without doing your homework. The cannabis industry is already risky; don’t put yourself in an even more vulnerable situation. If you feel like you are being scammed, listen to your gut and assess the situation. Save emails and ask for items in writing. Above all, stay vigilant! There are many wonderful, credible companies in the marijuana industry. You just need to be able to identify them. And with these tips, you are well on your way!