The Shift

Across the West Coast cannabis growing regions, a major shift is underway.  Cannabis production, and the economic benefits traditionally associated with such, is going from the hands of many to the hands of few.  Small mom and pop operators are struggling to compete with well capitalized corporations and more skilled producers, and this trend will only intensify.

While the Craft industry (small batch, high end production) offers lasting hope for small family farms, the challenge is that many folks operating in the space don’t possess the knowledge, husbandry, resources, or even basic farming skills required to compete successfully in high quality flower markets.  In other words, it’s not just that small operations lack the capital, business prowess or proximity to major metropolitan markets as many argue.  It’s that many simply aren’t producing a product desirable enough for increasingly discerning and judicious consumers.

In the farming space, small has become synonymous with craft and nothing could be further from the truth.  Most small operators in Humboldt County I’ve worked with are really bad at pot farming.  Tiny buds, poor trichome production, terpene sloughing, powdery mildew, mold, bugs, and terrible drying and curing processes plague the many dozens of farmers I’ve met over the past five years.  And to be very clear, every one of these operators told me they grow killer stuff and the vast majority are holders of temporary cultivation permits.

The remote locations, the somewhat inward or isolated lifestyles of many sungrown farmers and the lack of exposure they’ve had to true top shelf flower has led to outsized and unwarranted confidence around production and skill set.

Sadly, I’ve lost friends (and perhaps gained a few adversaries) as I’ve shed light on the subject for consulting clients.  Cannabis farming has been a very ego driven business and we know that males derive personal satisfaction and a sense of self worth and accomplishment from their work, so I completely understand the angst.  Many find it hard to accept that they have learned little about producing high end product over the past decades and struggle with how ill equipped they are to compete in the current marketplace.  Coming to understand that their livelihood was based, not on skill, but on the fact that there was relatively little weed around is a tough pill to swallow.   Many are exiting the industry while others are barely holding on. 

In defense of the less skilled, we must not forget that until two or three years ago old, brown shit weed still fetched a fair ticket in the illicit marketplace…now those units are being purchased by folks from Arizona and elsewhere at $100-150 a pound.  Given that long-time operators are suddenly competing directly for shelf space with corporate money and those who actually exhibit admirable cannabis farming skills, overconfidence has been largely replaced with fear, anxiety and depression. 

Economically speaking, small communities across the west coast are beginning to feel the pinch as excess rents (profits) go away.  Fewer lifted trucks and less spending on fancy attire, boats, firearms, ATV’s, vacations and dining out are hitting small businesses hard.  With less disposable income and with the corporatization of cannabis markets, money is changing hands quickly.  Corporate producers spend less on local consumption and this trend has only just begun.  Over the coming year it’s estimated that 90% of California cannabis companies will fail and the pain felt by industry participants, local merchants, and ancillary service providers will be significant.

It’s time small farmers quit whining and start executing at a higher level.  The reason many permit holders are struggling with distribution isn’t because the market sucks, it’s because they do.  The quicker growers can step up, hone their craft and begin producing something of value, the more they will realize that opportunity is ripe.  It’s the first inning of the regulated cannabis marketplace and to assume things are over is ridiculous.  Skilled farmers are inking deals with celebrities, building brands of their own, and capitalizing on the rapidly growing industry and the fervor for high quality Humboldt product.  The cannabis industry is now our nation’s fastest growing and there’s a place in it for skilled participants across the operating spectrum.  The ability to meet consumer needs, adapt to their changing preferences, and stand out among increased competition will separate the winners from the losers.

Unfortunately out west, many long term producers are losing and will be wiped out in short order.  Pockets of economic strength will remain and wealth creation will be significant for some, but not many.  Local economies will struggle and must be nimble and adaptive in order to succeed in this new paradigm.  Will you do the same?

Jesse Duncan

Blue Cookie

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