Executive Summary
Magic Dragon is a start-up company that will spearhead the aspects of creating awareness and eventually bringing the top quality vetted cannabis brands straight to the doorsteps of the customers’ inboxes. It is going to be the one-stop monthly subscription box company that will have several options of different boxes that will cater to the needs of various buyers. The needs will range from wellness, health, recreational, anxiety, first-time users, and general uses. The company has formidable products and services that will endear it to the target customers. Moreover, the marketing plan aims to reach out to the target customers and convince them to become regulars. There is an efficient operational plan, management, and organizational analysis. The financial plan indicates that the company will be profitable right from the first year of operations.
Company Description
Company mission statement
Magic Dragon’s mission is to find a cannabis user in everyone for recreation, health, wellness, anxiety, first-time users, or general use.
Company philosophy and vision
The vision that the company will pursue is the one that focuses on becoming the trusted brand that is going to expand from cannabis care monthly subscription boxes to a brand that provides a source of cannabis information, creates a community, and produces events and experiences.
Company goals
The management team will be looking forward to facilitating the company’s core values that include trustworthiness, quality, boldness, weight, and convenience. Moreover, there are keys to success that will be at the fulcrum of the company’s operations. They include expert brand and marketing strategies aligned to the market, influencer connections, and hyper-targeting quality and vetted products. These are the aspects undertaken by the management, staff, and other entrusted external stakeholders.
Target market
Magic Dragon is a company that will be determined to bring the top quality vetted cannabis brands to the doorsteps of the clients’ inboxes. It will function as a monthly subscription box company that will come up with several options of different boxes that are meant to cater to the customers’ needs. These include health, wellness, recreation, anxiety/depression, first-time users, and general use.
Industry
The company will be operating the cannabis products industry, where the emphasis will be laid on the need to produce, market, and sell various cannabis products to its esteemed customers in various categories based on the extent of the usage of the product at any given moment going forward.
Legal structure
The business will be operating as a limited liability company (LLC). It is a form of business ownership where the shareholders are not held personally liable for the entity’s liabilities at any given moment. It is a structure that has been chosen to provide the entity with a separate legal life that will be different from that of the shareholders. It will have the board of directors and senior management team tasked with the strategic and operational decisions at any given moment going forward.
The ownership is going to be based on the extent of the contribution of the required financial resources. At the beginning of the whole formulation aspects, the owners will contribute capital and liaise with the financiers like the venture capitalists to avail the financial capital. Afterward, it will transition into an LLC where members of the public and institutions will be permitted to acquire shares in the company moving forward. Each stakeholder will thus be receiving dividends based on the extent and number of the shares held and the prevailing market conditions.
Products & Services
Your company’s products and services
The company has the ultimate goal of having several options of different boxes to cater to the buyers’ wants. The products will be targeting users concerned about health, wellness, recreation, and anxiety. The company will also cater to first-time users and general users. There will be various products and services that the company will avail to the market. There will be a wide variety of products. They will include recreation/party, health/healing, sport/muscle recovery, relaxation/anxiety, and amateur/beginner. The products will be delivered in boxes where each will cost $150.
There will be the provision of the aspect of there being monthly subscription services for cannabis lovers, users, and beginners. The sales team at the company’s disposal will be mandated to take the orders that have been placed by the clients online via the website. The orders will be processed then the cannabis products eventually be delivered to the partner dispensary locations via the delivery aspects. The rationale is to ensure that the products are facilitated to get to the customers’ doorsteps in real-time for convenience purposes.
The problem the product or service solves
Cannabis product users have over the years faced lots of restrictions on the extent to which they can consume the products that will help them address their concerns. In most cases, such products have been consumed in ways that have been presumed illegal, thus lending some of the users into trouble with the law enforcement agencies. The decision by this company to come up with a new set of products is two-fold.
First, there is the felt need to have cannabis products prepared, marketed, and sold in line with the confines of the law at any given moment. Secondly, there has been the need to bring everyone on board by ensuring that their needs are addressed by the products that the company is availing to the market.
The products will be targeting users concerned about health, wellness, recreation, and anxiety. Some will cater to first-time users and general users. The implication is that the company is looking forward to taking care of the wholesome needs of the consumers at any given moment and ensuring that they use the products within the confines of the law.
Most companies and their products targeting similar markets have failed to address the two broad concerns covered above. Further, the doorstep delivery mechanism and the online transaction service model are yet to be taken a notch higher by the current companies. It is a situation that gives room for a new market entrant that is determined to take the whole situation to a whole new level.
Any proprietary features that give you a competitive advantage
The company will be looking forward to having different product categories for various needs of the customers. The emphasis will be laid on the need to address the intellectual property rights associated with each product to ensure that rival companies do not necessarily copy them and disadvantage this company in the market at any given moment.
How you will price your product or service
The company is going to focus on the need to have a premium pricing model. It is a mechanism that will ensure that the products availed by the company are priced higher to get higher profit margins than most of the market rivals. The understanding is that the company will be introducing a wide range of beneficial products to the target customers who are supposed to pay highly to consume them. It is a mechanism that will ensure that the products are associated with quality and the demonstration to aim at consistency moving into the unforeseeable future.
Marketing Plan
Market research
The company’s ownership has undertaken both primary and secondary market research to try to understand the dynamics and realities that have to be addressed at any given moment. There has been the identification of the competitors where the emphasis has been laid on the need to understand them properly based on their business models, strengths, and weaknesses to craft a mechanism of having a strong and viable company moving forward.
Various stakeholders in the market and industry have been interviewed, and surveys were undertaken, bringing on board the target customers, regulators, potential competitors, and others. Secondary market research has also been given the priority that it deserves. Journals and magazines have been used to extract the data that has informed this business on what is happening and how best it can carve out its niche and become as essential as possible moving forward.
It has been established that the global legal marijuana market size is going to expand to reach USD 70.6 billion by 2028. It is a market that is going to expand at a CAGR of 25.7% from 2021 to 2028. It is also noted that the increased legalization of marijuana for medical and adult-use and the evident continuous growing of such products for the treatment of chronic diseases will become the key factors driving the market for legal marijuana.
The adult-use segment has continued to dominate the market, where it recorded a revenue of 54.6% in 2020. It is expected to expand at a relatively significant CAGR over the forecast period. It is a situation that is going to be facilitated by the high demand among the millennial and patients who do not qualify for medical cannabis. It has to be also noted that medical marijuana will grow at what can be termed a stable rate throughout the forecast period. It is a situation that is associated with the legalization that has been facilitated in various markets.
Barriers to entry
Most businesses that would aspire to get into this line of operations find it hard to make it due to many barriers to their market entry. First, there is the aspect of the high startup costs that are required. For a company venturing into the cannabis products line of business, there are high levels of regulations that have to be tackled and the costs associated with the other related aspects. Tariffs and quotas make the business costly. The government and its agencies are always determined to ensure that cannabis is used for the right reasons, and in that regard, there are lots of restrictions that are imposed on the activities that the companies undertake at any given moment.
Threats and opportunities
There are several threats that will be affecting the functioning of this company at any moment. First, there are constant changes in government regulations regarding cannabis products and their consumption. The government is under immense pressure from lobby groups and other interested parties from religious contexts determined to have stricter laws on the handling and consumption of marijuana. Any punitive measures by the government and its agencies will affect the business in unprecedented and unexpected ways.
There can be the aspects of the changes in technology that will render the processes and thus products of this company obsolete and thus uncompetitive in the target markets. The implication is that consumers will be opting for the products that are availed by the companies whose levels of sophistication are quite high due to the technological aspects. The implication is that this company may struggle to reach such standards.
There can be changes in the economy that affects the purchasing power of the target consumers. The implication is that the demand for the products will dwindle, thus leading to limited revenues and profits generated at any given moment. There will arise a situation where the company will no longer have sustainable operations, thus leading to the ultimate failure and running out of business completely.
Product/service features and benefits
Magic Dragon has to be regarded as a progressive and futuristic entity that will exploit the digital marketing options to endear itself to the target customers at any given moment. The social media platforms will be part of the elaborate marketing strategy that will be pursued. The company will be looking forward to using such platforms to create awareness, remind clients, and urge them to purchase its products.
The company has come up with products that are meant to benefit various categories of customers. It had already been emphasized that the products will be targeting users concerned about health, wellness, recreation, and anxiety. The company will also cater to first-time users and general users. There will be various products and services that the company will avail to the market. There will be a wide variety of products. They will include recreation/party, health/healing, sport/muscle recovery, relaxation/anxiety, and amateur/beginner.
The implication is that each category of consumers will be fortunate enough to have a company that will be determined to meet their needs. Medical marijuana use has been on the rise in recent years; thus, the company has come up with health products that address anxiety which is part of mental health. Further, wellness and recreation are some of the product varieties offered to the market moving forward.
There will be other viable options, including custom funnels, hyper-targeting, generating new business, and leads to the client retention programs. The bottom line is to have a company focused on having loyal clients that will be integral in its quest to become profitable, competitive, and sustainable in the long term.
The target geographical market for a start will be the North Shore community, mainly Salem in Massachusetts, USA. The target age range is between 21 and 55 years, including daily, frequent, and amateur cannabis users.
Target customer
The products will be targeting various categories of customers. There will be those users concerned about health, wellness, recreation, and anxiety. The first-time users and general users of cannabis products will also have their needs addressed. These are the people aged between 18 and 55.
Various products and services will be availed to the market by this company.
There will be a wide variety of products. They will include recreation/party, health/healing, sport/muscle recovery, relaxation/anxiety, and amateur/beginner. The customers in this context will be the high-income individuals based on the premium pricing model that the company will adopt.
Key competitors
The company will operate in a competitive and dynamic industry in the American market. Some of the leading American marijuana products companies include Green Thumb Industries, Truelieve Cannabis, Innovative Industrial Properties, and GrwoGeneration. Others include Scotts Miracle-Gro and Jazz Pharmaceuticals, among others operating in various parts of the country.
All the above-listed companies are going to be the direct competitors of this business. They have been in business for long periods where they have established their brands and reputations among the target customers. Magic Dragon will be looking forward to taking a huge market share from each of them moving forward.
Positioning/Niche
The unique segment of the market exhibited by Magic Dragon is multidimensional. It will be focusing on various aspects of the market that include anxiety, health, wellness, and leisure, among other aspects. The company will be presented to the customers as concerned about their wholesome needs where the emphasis is placed on taking their consumption to a whole new level while getting the cannabis products under one roof.
How you will market your product/service
The company’s website will form an integral part of the marketing forum for the company’s products. The select social media platforms will also be exploited, implying that the company will entirely focus on using the online advertising strategy.
Promotional budget
A budgetary allocation of $50,000 will be set aside for the marketing and promotional aspects. $20,000 will be used before the startup kicks off, while the remaining $30,000 will be used on an ongoing basis.
Pricing
Prices will be set to cover the costs of production, marketing, and other aspects while focusing on having huge profit margins. It is the logic behind the adoption of the premium pricing model, where the ultimate goal is to make as huge profits as possible at any given moment.
It is a model that will ensure that the prices are higher than most of the competitors. The rationale for such a pricing approach is to make customers understand the quality of the products and experiences associated with their consumption are worth the high price. All products will be paid for before they are dispatched to the customers’ locations.
Location of the proposed location
The business premises will be in the North Shore community. The rationale is that the target geographical market will be the North Shore community, mainly Salem in Massachusetts, USA. The target age range is between 21 and 55 years, including daily, frequent, and amateur cannabis users.
Distribution channels
A requirement will be needed where any interested individual will have to visit the company’s website to place an order. The teams working in the warehouse and the box assembly, respectively, will be required to process the orders. The warehouse teams will be contacted to ensure that the required products are available before the box assembly team is given the go-ahead to prepare the products for delivery.
Operational Plan
Production
The company will produce the products at its premises. There will be an elaborate production procedure for each of the products. The elaborate operational plan will be intertwined with the marketing plan. The company will be operating based on the presence of the comprehensive monthly subscription service. It is a framework that will be meant to benefit cannabis lovers, users, and beginners.
Quality control
Quality control will be an integral part of the production process. The management will focus on ensuring that the products are safe, of high quality, and in the best interests of the target customers. A quality control section will be set up in the production department to address such aspects.
Location
The premises will be housed in a commercial building that will be leased for a long period. It will be within the North Shore community. All production and distributions will start from that location.
Legal environment
There will be one-time expenses that include license fees paid to the Cannabis Control Commission of the Commonwealth of Massachusetts and other applicable government agencies, among other levies.
Personnel
There will be a mixture of experienced and innovative employees with new and fresh ideas. All employees will have at least a high school diploma. There will be the need of 30 employees in total for a start. There will be those occupying the managerial, supervisory, and junior roles. A human resources (HR) consultancy and recruitment firm will be contracted to avail the employees. Some induction will be undertaken for the new employees within two weeks of employment.
Inventory
A warehouse will be in place for the finished products waiting for dispatching to various destinations. Raw materials will also be stored in the business premises awaiting utilization in the elaborate manufacturing processes.
Suppliers
The management will contact various suppliers. A review of the quality, quantity, and pricing of the supplies will be evaluated for the decisions moving forward.
Credit policies
All products will be sold on cash terms. Customers will be required to meet the full prices and additional transportation fees for the products before sanctioning their departure from the business premises. No credit terms will be permitted.
Management & Organization
Biographies
Four senior managers will run the business. They will include Elvis Rogers (the CEO), Keith Adams (Operations manager), and Helen Keizer (Finance). Mike Kingsley (HRM) will also join the team. These are experienced professionals who will have over 15 years each of senior-level management. They hold higher education qualifications like MBAs.
Gaps
Any gaps will be filed by the consultants and independent contractors whose contributions will be evaluated, audited, and rewarded.
Advisors
The members of your professional/advisory support team, including:
- Attorney: John Kylan
- Accountant: Salome Peter.
- Board of directors: Richard Armstrong
- Advisory board: Lilian Presley.
- Insurance agent: Edger David
- Consultants: Tim Watson
- Banker: Mason Greenwood
- Mentors and other advisors: Harry Maguire
Organization Chart
Magic Dragon is a for-profit company looking forward to increased sales and depreciation expenses to have significant and suitable margins. As a start-up, it will focus on exploiting a market that is still in its formation stages. There will be one-time expenses that include license fees paid to the Cannabis Control Commission of the Commonwealth of Massachusetts and other applicable government agencies, among other levies.
The entity will be looking forward to spending $200,000 for the one-time expenses, including leasing the premises, setting them up in terms of the interior design and other related aspects, and acquiring the necessary equipment and furniture, among other related aspects. The monthly expenses will include marketing and promotions, among others whose annual cost will be in the region of $100,000 for the first year of operations and are projected to increase by 20 percent each year for the first three years.
The company will incur labor costs. There will be the need to have a mixture of experienced, innovative, dedicated, and committed personnel at any given moment. The implication is that the qualified individuals will be brought on board to ensure that the company moves in the right direction from inception. The total labor costs will be in the region of $300,000 for the first year of operations.
In terms of revenues, the company is looking forward to having sales that will amount to $1,400,000 with the cost of sales of around $500,000. The implication is that the profit made on the sales will be $900,000. Factoring in the one-time expenses, annualized monthly expenses, and labor expenses ($200,000+$300,000+$100,000) $600,000, the net profit for the first year of operations will be $300,000.