In the legal cannabis markets distributors, retail outlets, value added businesses, and consumers are becoming ever more discerning. They want quality, consistency, predictability of experience and a fair price. On the cultivation side where I focus my professional attention, having a proven, written process to guide the cultivation journey from beginning to end is a must. The transferability of this process helps you scale your business, empower employees to function at a high level, and helps drive the quality and consistency purchasers and end users demand. This piece shares an overview of my core philosophy for competing in an increasingly crowded cultivation space and will be followed by 4 subsequent posts that will outline my process for farming ultra high end flower in detail.
Given equal or similar genetics,
growing highly differentiated cannabis flower is arduous and is largely
dependent on knowledge, experience, resources, process, and environmental
Producing top shelf, differentiated
flower requires sound infrastructure and a winning, start to finish farming
process that differs from mainstream commercial production in some key
The repeatability and transferability
of your farming systems and processes drive enterprise value and facilitate
business expansion. They must be
documented in detail.
Indoor, light deprivation and term
cultivation at scale all offer ripe opportunity for product differentiation and
branding. In terms of light dep, for
example, an overall lack of attention to plant structure, preventative
maintenance, terpene retention, and visual appeal of finished flower currently
offer significant opportunity for brand creation and strength.
All else equal, you finish as you start
in cannabis farming. As such, the
vegetative cycle is of paramount importance and should warrant significant
resources. Special attention to plant
vigor, health, structure, terp content and root development early on serve as
the enabling factors in the quest for high end, high value flower production.
As someone who has engaged dozens of commercial cannabis
farmers through my financial consulting platform and my own work as a farmer, it’s
become clear that many smaller operations could benefit from professionalizing
and formalizing their operations.
For decades farming cannabis profitably and illicitly in the
more permissive states was relatively easy. Because of this, operators never had to bother
with many of the business planning functions so common to other
industries. Things like business plans,
mission and vision statements, target markets and product offerings weren’t
really on the minds of folks operating in the space. Rather than trouble with such unnecessary
things one could buy rural land on the cheap, grow tons of crappy weed, sell it
for high prices, and earn a marvelous living.
There was work involved and risk of incarceration and theft were real,
but it didn’t take a rocket scientist to be successful.
Now that billions of dollars are flooding into the industry,
competition is fierce and farmers must become astute businesspeople if they
want to survive. They must formalize and
professionalize their operations to find lasting success. The first step in this process is creating a
written business plan to help guide the operation forth with clarity. The second is creating an operations plan
that guides day to day workflow in an effort to control quality, improve
outcomes and generate the consistency necessary to build a successful brand and
A business plan doesn’t have to be intimidating. It can
actually be a real joy to create, especially for those who truly love farming
cannabis and competing in the nation’s fastest growing industry. It’s your chance to be creative and identify
how you want to operate and where you want your business to go.
When creating your business plan you must first describe your company in detail. Things like your vision, mission, and value
proposition are included here. What problems
are you trying to solve? What market
needs are you attempting to meet and why/how can you meet them better than others? What do you hope to achieve with your
business, in other words, what is its meaning and purpose?
Your plan should also include a market analysis. Many use a
SWOT analysis here that outlines your specific strengths and weaknesses as well
as opportunities and threats facing you.
In the case of cannabis a market analysis should talk about increasing
social normalization and competition, changing consumer needs and preferences,
product proliferation, price action, and a developing national and global
marketplace among other things.
The business plan should also detail your company’s organizational structure. What type of entity are you, a corporation,
an LLC, other? How about the structure in
terms of employees, management, and outsourcing of critical business functions?
Product focus and
marketing/sales are often the bread and butter of the business plan. Are you competing for shelf space with high
end flower, seeking celebrity endorsements, or growing biomass for extractors
and other value added participants in the supply chain? Are you focused on cannabis as a medicinal,
lifestyle or recreational product, or something else? How will you get your product to market? What distribution platforms will you use and
will they provide acceptable sales velocity and revenue? How does your operation help distributors
fulfill the needs of their customers and do you fulfill them better than
A natural offshoot from this section of the business plan is
financials. Using reasonable figures for production, prices
garnered for product, and a detailed breakdown of costs, how do things pencil
out? At what point during the year will
you break even? How much must you set
aside post harvest to fund the following season’s operation? How profitable is your business? What changes can be made to improve financial
When complete, you will be proud of the plan created. It will guide your organization forward and
can always be adjusted as needed. Once
commercial lending finds the cannabis space and as mergers and acquisitions
pick up steam in the coming years, having a sound plan and a proven track
record of success will show your professionalism and help you stand out from
An operations plan is also critical to your ongoing success
in the increasingly competitive cannabis farming space. This plan should outline your farming process
in exceptional detail. Everything you do
to create product, from start to finish, must be written down. This not only helps improve consistency and predictability,
but also allows you to transfer your knowledge efficiently to workers or
potential suitors. I personally use a
weekly calendar that documents all necessary tasks all season long. I build the calendar each Sunday and actually
enjoy the process as it clears my head and allows me to farm more confidently
than I otherwise would. It is enormously
beneficial in terms of dictating workflow, improving efficiency, and creating
accountability. Was the work done or
not? If not, why not? Calendaring helps avoid distraction and helps
prevent overlooking important details. Many
farmers are paranoid about documenting their “trade secrets” and workflow, but
failing to do so will inhibit your ability to scale or grow your
operation. Transferability of your
winning systems will help drive enterprise value and will become increasingly
valuable in a growing marketplace dominated by M&A.
While somewhat time
consuming, professionalizing and formalizing your operation is a must. Failing to do so, I argue, will only hasten
your demise and facilitate the transfer of wealth from your pocket to larger
As I’ve shared in other posts, the operating environment for
cannabis farmers is challenging. It also
offers significant opportunity for astute, highly skilled operators.
It’s no surprise that competition in the space is
increasingly rapidly. An estimated $18.5
billion was raised in the industry last year alone and I expect 2019 will
surpass that figure significantly as corporate interests eye their prize and as
social acceptance globally continues to improve. According to data provided by Veridian
Capital Advisors, U.S firms have already raised over $3 billion as of early
March, most notably a $1.6 Billion investment by Altria in a Canadian firm.
As with any industry,
increased competition drives margins lower.
Excess “rents” or profits go away quickly as we have seen with flower
and distillate prices. Less efficient,
lower quality market participants go out of business or are swallowed up by
someone better if they’re lucky. Such is
the capitalistic paradigm. As we have
seen to the north and to the east, mom and pop operators struggle to find a
lasting foothold when things get tough.
Another challenge for farmers is price volatility. Throughout the year cannabis prices swing
quite significantly based on supply and demand.
Late spring and summer see the firmest prices, but few small producers
are able to hold out that long without getting paid. Many are forced to “dump” product at low
prices in the fall and winter in order to make land payments, pay employees,
and support their own lifestyle. Skilled
growers with desirable product, though, can use developing forward markets to
improve certainty. These contractual
arrangements lock in prices pre-harvest and are a nice tool to consider if more
predictable cash flow is desired.
Farmers are also challenged by the relationship between
demand, scarcity and input prices. On a
local level here in Humboldt for example, increased demand for services like
consultants and well contractors has led to upward price pressure and
significant delays in availability of service.
Theft and fraud also challenge the farming landscape as does
the “milk the cow” mentality many have when serving the industry. I’ve heard several lines of business such as construction,
consultancy services, landlords and others speak blatantly about “dope grower”
rates that can tack on 50-100% or more on service fees normally charged to
other customers. Because everyone
assumes growers are shitting money, they knowingly and willingly feed at the
trough with exorbitant prices. As one
alleged insurance scandal recently showed, some desperate to fill their own
coffers are not afraid to steal from farming operations.
Taxation, fees, and a constantly changing regulatory
background also complicate things for farmers who have less time to spend on
admin. With the piecemeal and fragmented
regulatory environment in California, moving compliance hurdles are simply too
much for some to bear.
Despite a host of challenges, significant opportunity also
awaits cannabis farmers. For the first
time ever, farms can create a brand and proudly tell their story to the world
via social media and some advertising outlets.
Through quality, differentiation, authenticity, and story-telling, farms
of all sizes can connect with a consumer base in an intimate way. Awards, accolades, product mentions,
interviews, print media, and instructional videos are just a few ways to get
your farm on the map and your product on dispensary shelves.
Product diversification also offers many viable outlets for
farms to investigate. CBD, raw acids,
extracts, breeding, tourism, and nursery operations are just a few areas you can
explore to find a market for your product.
Information and technology advancements also offer
opportunity for farms to get educated and improve the efficiency of their
operations. Technological advancements
can improve farm output and quality while information platforms like Green
Flower Media, cannabisbenchmarks.com, Cannabis Business Times, and Marijuana
Business Daily can help farmers understand business trends, pricing, and other pertinent
Farmers also have a huge opportunity in helping to further professionalize and legitimize the industry. Thru compliance, stewardship, compassion, and charity, farmers can position themselves well to capture business from conscientious consumers, while playing a role in facilitating the push to create safe, barrier free cannabis access worldwide. In so doing, they can capitalize on ever increasing markets while making lasting social and environmental improvements through their work and charitable efforts.
The cannabis business is
tough. Competition is increasing,
consumers are demanding higher quality products, and prices are falling
significantly. Many operations are
struggling with sales velocity, compliance costs are rising, and with new tax,
labor, environmental, and regulatory requirements, many operating in the
farming space are failing, fast.
This piece will summarize an oral
presentation I give designed to help farmers achieve financial success despite
the challenges listed above. This 9
point plan, if taken seriously and executed well, can help you not only
survive, but thrive in what promises to be an increasingly crowded space. Subsequent posts will flush out these topics
in greater detail.
Understand the Operating Environment – the farming space entails significant risk, but offers significant opportunity as well.
Conduct a Feasibility Study – given your skill set, expenses and production parameters, can you operate in the new financial paradigm?
Professionalize and Formalize Your Operation – Create your mission and vision statements, and determine your target market and product offering appropriately
Focus on the Profit Function – Clearly understand revenue and costs
Understand Developing Resources & Stay Connected and Informed – Get plugged into industry data and developing resources
Work Smarter (and maybe harder too) – Create farming and business systems and put in the time necessary to be successful
Be Thankful and Honor The Plant – Working with the plant is a blessing, remember that always and behave according
Care For Yourself Physically and Mentally – Farming cannabis is not for the feint at heart, physical and mental strength are important for longevity and success
Manage Business and Personal Finances Prudently – Solidify company financials and undergo a personal financial planning process as well
It’s estimated that 9% of those who use cannabis regularly will develop some level of physical dependence or addiction to it. For alcohol and harder drugs, the number is closer to 20%. As an avid fan of cannabis and a professional farmer myself, I wish I wasn’t in that camp, but I am.
I remember first coming to terms with my cannabis addiction at age 17. It was during my senior year of high school, approximately two years after using for the first time, that I began needing cannabis to get my day going. All my friends “waked and baked,” but I was the only one who became anxious and nauseous without it.
I pleaded with my folks to purchase me enough grass each week so I could stay focused on school and sports, but the concept of “functional” addiction was lost on them, despite that being their personal m.o. As a result, cannabis became quite disruptive until age 20 when I met a few grower buddies who would keep me in product at no cost. I subsequently entered college and earned straight A’s throughout two undergraduate degrees and an MBA while using copiously.
The current literature on cannabis addiction tends to downplay its severity. Cannabis withdrawal has been compared to quitting coffee and is normally associated with loss of appetite, moodiness, and trouble sleeping.
Having experienced cannabis withdrawal five times over the past two and a half decades, each experience was much more severe for me. Despite a weaning off period where I decreased my use for a couple weeks prior to abstinence, each episode was both trying and disruptive. When I stop using, I don’t sleep for the first two or three days. I have severe nausea and anxiety and lose approximately ten pounds due to loss of appetite and occasional vomiting. Sensory overwhelm is near constant and I simply need to be alone as conversation and work are just too much. After seven days or so I become more human, but am plagued by nightmares for several weeks following.
While I consider myself the exception, not the rule, I can strongly attest to the fact that cannabis addiction and withdrawal are real. Because I believe addiction is hereditary or genetic at some level, I encourage those with serious family histories of addiction to tread cautiously when considering whether or not to use cannabis. I share with my children that they got a crappy roll of the dice in relation to substance abuse proclivity, so advocate they abstain from recreational use. I’m a strong advocate for medicinal use regardless of patient age, but have shared the risks for my kids outweigh potential benefits as far as adult use is concerned.
For those struggling with cannabis addiction I recommend first changing your method of consumption to break the habitual side of things. I also advocate for a reduction in use prior to going cold turkey. Chamomile tea, ginger ale, easily digested foods, and in severe cases, sedatives can help you through the temporary, but very uncomfortable adjustment your body makes. Share your experience with family and friends and try to stay away from others who use for a few weeks while you build resolve and start feeling better.
The good news is that after going through withdrawal, I feel great on the other side. Energy levels improve, strength and fitness (despite a very active using lifestyle) improve, as does my physical appearance, especially a reduction in eye circles. I tend to become more optimistic, more outgoing and more social as well.
While cannabis tends to enhance my empathy and creativity while reducing headaches and chronic pain, withdrawing from what I largely consider to be a life saving and life improving substance is important for me every several years. It allows me to sort of reset or recenter myself and often allows for different perspective and improved levels of interpersonal relationship.
Conversely if and when I become too self centered, too hard working, too moody, or just not quite at ease with myself or the world, returning to cannabis can also have very similar positive impacts, at least for a time.
is on the rise globally. Interestingly,
baby boomers and women make up the fastest growing segments of the market. Whether seeking relief from pain, menopause,
stress, or a host of other ailments, individuals across the world are increasingly
seeking cannabis as a form of medicine or as a recreational tool. Because the industry is rapidly evolving, a
plethora of new products are now available to consumers. This piece will touch on different methods of
consuming cannabis so that you can make a more informed choice about what works
best for you.
information on this topic or to learn more about growing cannabis and the industry
at large, I strongly encourage you to check out Green Flower Media. I recently took the Cannabis Fundamentals
Course through their online Academy and was amazed at how much I learned about
this topic and others, even as a professional in the industry.
Smoking or inhaling cannabis is what
traditionally comes to mind when thinking about weed. Inhaled cannabis is enjoyed by many as their
preferred method of consumption.
Cannabis can taste really amazing and many folks simply enjoy firing up
a bowl or a joint. The process can
become somewhat ritualistic and for me personally, I always derived
satisfaction from handling the flower, smelling it, putting it in my pipe and
watching it burn. Many also prefer the
effects of inhaled cannabis as it hits you really quickly, often on the exhale
for strong flower and extracts. Effects
tend to last from 1-3 hours for experienced users, longer for newcomers.
though, isn’t the healthiest of activities.
Cannabis burns hot and can be irritating to the throat. Some research also shows that compounds found
in cannabis can become carcinogenic when heated. While no direct causal link has been found
between cannabis smoke and cancer diagnosis, the plant does contain certain
chemicals deemed harmful. Smoking cannabis
also produces a very strong odor that some find offensive and smoking is also a
terribly inefficient way to get cannabinoids into your system. 50% of the active compounds are lost directly
to flame, and another perhaps 20% are lost upon exhale.
Vaporizing is another form of inhaled cannabis
that more and more consumers are adopting.
When vaporizing at lower heat, plant resins and oils melt without burning
plant material and without allowing tars and burning embers to enter your
mouth. Because vape devices burn at
lower temperatures, fewer potential carcinogens are associated with this
method. This method is also essentially
odorless and can be a very discrete way of consuming. Vaping is also a far more efficient way to
consume cannabis that preserves over twice as many cannabinoids as smoking.
be taken though. Vaporizing, especially
cannabis oils, can be a very powerful delivery method not suitable for novice
users. Additionally, research is now
showing that not all vape devices are created equal. Some include metal alloys and plastics
inappropriate for heating, and some cartridges have shown to contain other
contaminants as well. Using high quality
devices with medical grade inputs is important.
Edibles refer to cannabis products that we
eat. Because smoking is associated with
certain social stigma and heath concerns, many find edibles to be an
appropriate alternative. Unlike inhaled
cannabis which goes directly to the central nervous system, edibles must be
digested by the stomach and metabolized in the liver before effects are
felt. As such, depending on your metabolism
and what’s in your stomach at the time of consumption, the onset of effects can
take between 30 minutes and 2 hours. A plethora of products are coming to market
and I personally find that those made with distillate (an odorless, tasteless substance)
are the most enjoyable as some foods have a strong cannabis taste…most
pronounced in chocolates I find. The effect
of edibles lasts quite a while, up to 6-8 hours for some, longer for the less
experienced or if a very high dose is taken.
Those with chronic pain and sleep issues find a nighttime edible to be
stronger than inhaled forms of cannabis and need to approached cautiously. I overshot one time on a brownie. Damn thing tasted like ganja sludge and I frankly
should have known better. I got sick,
was an odd sort of green/yellow for several hours, and the effect lasted all
day. When edibles are broken down by the
body the THC (active ingredient that gets you high) converts to a stronger form
which explains the increased potency. I
have also heard several stories of children and pets accidentally consuming
edibles, so for those with families, extreme precaution must be taken to keep
products safe, secure, and away from unwanted hands (or paws).
Tinctures are cannabis infused liquids made
from alcohol or oils most generally.
Tinctures are designed to be used under the tongue and are administered
with a dropper. With this sublingual
delivery, active compounds enter the bloodstream and the onset of effect is
much quicker. Duration tends to be
around several hours. Were you to swallow the tincture instead, it would essentially
become an edible with slower onset.
I enjoy the
effect of tinctures but have found homemade versions disgusting as I don’t like
the taste of alcohol or oil. For many though,
this discrete form of consumption is a go to method.
Topicals are another interesting method of
consuming cannabis. Creams and salves
are becoming increasingly available and with this method, cannabis will not
show up on drug screening tests if that’s a concern for you. Topicals are being used for skin
beautification, localized pain management and therapeutic massage namely. This method of consumption will not get you
high and has a relatively rapid onset of effects around 30 minutes. Duration tends to be around 2-4 hours. Like all things, specifics matter. Understanding how much active ingredient is
in each product is important and will indicate how much relative value a
Transdermal Patches, akin to a nicotine patch, are
growing in interest and availability. With
a patch, medicine is released slowly, providing ongoing relief for those who
need it. It’s important to note that
unlike salves or balms, a transdermal patch will show up on drug screens.
deliver of active compounds can be somewhat limited through a patch, they should
be placed on venous tissue where there is less fat and softer skin. Research is underway in this area to improve
delivery, so we can expect to see further developments in months and years to
Raw Cannabis is being labeled as a super food by some in the industry. Cannabis acids like CBDa and THCa are available in raw plant material that has not been heated, so folks usually juice cannabis or eat it as an ingredient in salads. Full of antioxidants, omega’s and amino acids, raw acids have been shown to improve immune function and serve as anti inflammatories. Raw consumption is non-psychoactive so it will not get you high. Cannabis trichomes can be a bit hard to digest, so some practitioners recommend eating only immature cannabis leaves, while others believe that eating both leaves and flowers is the way to go. Raw cannabis can also taste bitter, so complimenting with another tasty fruit or vegetable can make your experience more enjoyable.
Having spent a fair amount of time in conversation with both white and black market purchasers of the discerning kind, I’ve learned a bit about what constitutes top shelf flower. Many farmers believe (d) that if it gets you high, it’s good stuff. Not the case, at least not on the West Coast.
cannabis flower is large, chunky, naked, white, stinky, potent, and consistent
to the extent possible for your grow type and level of environmental control.
As I look
around at farmer friends and consulting clients in total desperation, I feel
sad. Good friends who made a great
living for decades are being upended quickly.
Many who thought they were good growers are learning (far too slowly and
begrudgingly) that such is not the case.
demands and competition intensify amid a proliferation of indoor and greenhouse
flower and amid increasingly availability of extracts and derived products,
much of our Humboldt County sungrown flower – even light dep – is failing to
impress. Outdoor is now largely treated
as “biomass” and the type of market flower largely produced in Humboldt across
all grow types currently is commanding very low prices…go out of business type
prices for smaller, poorer, and less efficient operators. While some white and black market trades are
still very firm for the highly skilled, average prices are falling fast, down
significantly over the last 14 months after tanking the year before. What was once considered killer stuff is now
relatively leafy, larfy, and twiggy in relation to expertly grown outdoor, much
less greenhouse or indoor flower where tremendous capital inflows now support
operations of both scale and reasonable quality.
definition of good flower seems lost on so many who are failing, it seemed
warranted to pen a few words on the subject.
For flower sales, the market tends to want them big and showcasey…one
bud or partial bud eights have more bag appeal and illicit a more wow type
experience to discerning consumers. If
your flowers are small (which most are), learn about plant manipulation, living
soil, organic feed regimens, and pest prevention.
should also be chunky, that is filled out and podded out versus the hollow and
hairy flower now dominating our local scene.
If your flowers are failing in this area, learn to thin and learn about
should be trimmed naked, that is leafless.
What should remain is a solid bud structure, with contour. This will only be accomplished through the
use of skilled, human trimmers that care about the plant and the beauty of
(regardless of the strain and its particular color profile) should appear white
because they are completely caked with outer trichomes. If not, check environmental exposure like
temperature, humidity and UV. Learn
about phosphorus loaded garbage weed and think natural in your approach.
should be stinky, really stinky. Your
buds should be so terped out they cause mild nausea, dizziness or sensory
overwhelm with prolonged exposure…say in an enclosed harvest or drying
area. Learn about artful stressing,
terpene production and retention, organic feed, and lower and slower drying and
order to compete with the effects of oil and extracts, should also be potent. Rampant
and rapidly growing demand for hash shows demand for potency. Many distributors won’t even purchase flower
testing below 20% THC, so the trend for high powered products seems
increasingly entrenched. Use known,
clean genetics of exceptional quality and grow them with extreme love and care
and this should not be a problem.
extent possible, flowers should also be consistent. While your early versus late run dep may well
boast different characteristics and color profiles, your flower should be identifiable
as your flower…uniquely awesome, delicious, and profitable, not because you say
so, but because the market does. For
those looking to have staying power or to build a brand, differentiation
matters and most farmers assume growing a unique strain is enough…it’s
not. Your finished product must be truly
exceptional to compete in the flower market, which many argue is going away
quickly. If you are struggling with consistency, seek to implement tighter
environmental controls to the extent possible for your grow type. Work with clone stock or sifted seed stock
and implement a sound, repeatable, written farming process to increase
predictability of outcome and improve overall business results.
watched a piece by Mr. Steve DeAngelo from Harborside while taking a course
through the Academy at Green Flower Media (which I highly recommend to those
wanting to learn more about cannabis).
He noted that sales of oil and extracts were less than ten percent of
their business just a few years ago.
The number is around 30% now and he joked that in another ten years,
only old geezers like him would be purchasing flower in a very small corner of
their dispensing facility. You getting
shelf cannabis, the only kind of retail flower the market really wants anymore,
isn’t all that complicated. It’s work.
That’s the problem for most. On
many “farms” it seems the plants are actually an afterthought. Lots of attention is paid to infrastructure
and farm operations, while plants, especially in the light dep space, receive
amazing little attention other than keeping them alive. Plants are often force fed and perhaps
blasted a few times for bugs or pathogens, but that’s about the extent of
things. Some work is done each day, but
the loving and meticulous details required to produce stellar cannabis go
grows are no different. Plants are so
big and unruly that broken down flower from 8-14 pound monsters often has
little bag appeal. Even leg sized colas
tend to end up spongy as few actually rock them up for fear of bud rot. It’s hard to maintenance spray really tall
plants so many have festering bug problems that bronze flowers and lead to
looser buds with funky odor. While
strict organic and “no spray” regimens can be effective, they are generally not
full proof and have been shown to be less successful over larger operations.
At the end
of the day we now produce a lot of crappy weed in Humboldt County and the
broader Emerald Triangle. It’s time we
step up. Rather than try to convince
people of the quality of our product thru hype and marketing, it’s time to let
the flower do the talking. When buyers
audibly gasp when seeing and smelling your product, you’re getting
somewhere. Even then you might not fetch
the exact ticket you desire, but at least your stuff will sell, fast. Average white market transactions are now
just over three pounds a shot according to cannabisbenchmarks. Distributors (like end consumers) are searching
for that magic bullet, and they now have plenty of product to shop. But
trust me when they find the right stuff, they scoop it up fast. Not to toot my own horn, but this past year’s
product of mine was being requested in fifty pound lots and I could have moved
boatloads more than produced.
Instead of growing pinner, poisonous, sterile shitweed, we must return to artisanal production more in line with market needs. We can and must do better in order to maintain relevance and capitalize on the nation’s fastest growing industry.