The Crying Game

Lots of West Coast pot farmers are crying afoul right now – cursing the corporatization of cannabis markets and rapidly declining wholesale prices.  As a cultivation and farm manager myself, I certainly empathize with challenging market conditions.  Sun grown farmers are struggling and it’s hard to see.  Suicide rates among the cultivation community are rising, people are going out of business and many Legacy farmers are left with little to no ability to replace the higher-than-average incomes growing cannabis historically provided.

That said, I shy away from the negativity and protectionism that has collectively gripped Nor-Cal and other Legacy producing regions.

As a financial practitioner for many years, I understand supply and demand.  My home state of California, like our neighbors to the north and east, produces far more weed than people consume – at least with respect to the regulated marketplace.  As we know from high school economics class, if supply of a good or service outpaces demand, prices fall.  In the case of cannabis, they are falling a lot.

After a brief reprieve from the price collapse of 2017 and 2018, prices cratered in the late spring and early summer of this year.  With increasingly large farms coming online, with many operators producing year-round in climate-controlled greenhouses, and with other states like Oklahoma now producing tons of flower, times are tough for many operators out west.  Legacy farmers, many of whom operate in the mountainous regions with short growing seasons, are grumbling vociferously.  While the loss of one’s livelihood is never fun, I’m not pleased to see the response among Legacy operators – many of whom are my friends.

Calls for a moratorium on cultivation licenses and taxes, acreage caps and bad mouthing “clueless” dispensaries, bud tenders, and consumers have become increasingly regular.  Even my hard right republican grower buddies are calling for protectionist measures – go figure!

During these conversations I remind friends about supply and demand.  If there was “true” demand for someone’s flower, there wouldn’t be a race to the bottom in terms of price.  Farmers wouldn’t be begging people to take their pounds and they wouldn’t be driving to hell and back trying to move a few units.  On the contrary, were their flower in true demand, their phones would be ringing, the internet would be abuzz, dispensaries would be bidding for product and prices would be moving up, not down.  It’s not that we need to educate budtenders or consumers about sun grown cannabis (yes, I’m aware of terpenes and the entourage effect), it’s that we need to deliver something people actually want.

If indoor flower is so popular and so much more expensive there’s a reason for that – it’s not because dispensaries and consumers are stupid.  It’s because the beauty, flower structure, cannabinoid content and taste of high quality indoor flower is hard to replicate outdoors and is in high demand in the legal market.  I, like many farmers here in the Emerald Triangle, grow really beautiful, really greasy outdoor, but I have yet to produce a term or dep flower that was as snow white or candy-like as my indoor SFV OG, for example.  Additionally, I know many consumers who don’t like sun grown flower as it gives them an allergic reaction when consumed.  While recent evidence suggests cannabis pollen, and perhaps THC itself can trigger allergic reactions, outdoor flower is fully exposed to the elements.  Just as our cars are dusted with pollen from surrounding vegetation, such is the case for outdoor grown flower as well.   

Legacy farmers trying to prove the marketplace wrong are barking up the wrong tree in my view.  Instead, we need to find our niche market (hopefully one other than dirt cheap flower for extracts and derived products), then capitalize on it through effective marketing, distribution and product placement.  Were we successful in identifying a niche and marketing our products effectively, pricing power would follow.  Complaining about the situation and trying to change the rules legislatively by blocking access/entry into the cultivation space are not the answers. 

Improving product quality via better flower structure and outer trichome production/preservation is one answer.  Another is getting aggressive with marketing, branding, and distribution.  Piggy backing on well-known West Coast brands like Cookies and Jungle Boys is a cost-effective way to showcase product and earn better tickets for pounds.  Selling one’s own farm and serving as a cultivation manager or lead cultivator for a larger corporate entity is another way to stay in the game and earn and fair wage.

The United States will ultimately open up to interstate commerce and most assume prices will rise for West Coast flower when sent to more lucrative markets.  Unfortunately, many Legacy cultivators will be out of business before then, especially those who think their weed is much better than it actually is.  Becoming highly proactive in terms of sales while radically increasing production and quality thru advanced cultivation principles can save your farm and allow you to capitalize on better times to come.

Kindly,

Jesse Duncan

My Sun Grown Ice Cream Cake Dep – 2021

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