Canopy Growth, the 800 pound gorilla of cannabis, recently furthered its impressive slide into oblivion. After minting, then ousting the first corporate cannabis billionaire, the global firm announced last week it would shutter approximately half of its cultivation capacity.
Canopy, like others, is realizing that growing weed people actually want to consumer is harder than expected. As I’ve long argued, with a proliferation of very high THC products like dabs, live rez carts and others, people now know what it’s like to be high. After consuming hash or ultra high quality cannabis flower, shit weed becomes a real waste of time. Harsh, flavorless smoke is no longer en vogue and most producers, including those in my beloved Humboldt, are coming up shy of the mark.
Growing truly premium cannabis (not crappy flower placed in pretty packaging) is arduous, and is dependent on genetics, knowledge, process, inputs, and environmental exposure. Subjecting your plants to more extreme conditions really glosses flowers over. Operating on a razors edge between spectacular success and utter failure, like mountaintop growers, produces larger glandular trichomes, which in turn house far more cannabinoids.
Mass Corporate failure and increasingly discerning consumer palates have put a lot of wind in the sails of artisanal producers – both small and mid-sized. Real artisans in my circle of friends garnered fantastic prices for AAA flower this past season and 2020 promises the same. $1,800-$2,000 deps was a real thing, although the less skilled among us earned a mere $1,200 a unit and are barely hanging on.
The capitalistic fervor that washed large cannabis firms in enormous liquidity is waning fast. M&A activity has slowed meaningfully, headline deals are falling apart, and firms that were engaging in massive expansions and hiring sprees just one year ago are sending employees packing. Like the tech bust in 2000, investors now demand more than just acquisition driven earnings growth. Like other industries, cannabis investors now demand sound execution, coherent business strategies, and profitability. Huge quarterly losses will no longer cut it…time to put up or shut up, and most firms are struggling in this regard.
As a mid-sized commercial producer with ultra high level farming skills, I’ve never been more confident, or more excited about a year in the dirt. Prices for the right product are firm and will melt upward in the coming months. Artisanal producers will continue to clean house and stack solid profits. Deps with a 2 handle and ins north of 35, while rare, are out there for the taking. Go get yours!!!