Growers evolve with the rapidly changing industry

As we approach spring and another summer growing season, things are looking better for the cannabis cultivation industry. Yes, there are still plenty of supply/demand issues in the business, but it’s going to be a few years before that gets completely worked out.

The good news is that the cultivators who are hanging in there are rapidly getting their houses in order: inefficient indoor grows are being replaced by modern greenhouses; experienced agriculture professionals are replacing “master growers” who really didn’t have the skills to run a commercial farm; bad business models and products are going away; and smart business people are “doubling down.”

The last point might sound nuts to some, but business, in many ways, is like the stock market: When everyone else sells in a panic, the folks with intestinal fortitude buy and stick it out. The same thing is happening in the cannabis industry.

Prices for good flower are way down in the established, legal rec states, and lots of people who thought this would be a cakewalk are running for the hills and abandoning their investments. That’s good for the folks with staying power.

Doubling down now could pay off in a few years when the supply/demand issues stabilize and the pendulum swings back toward a more favorable place for cultivators. That’s when the players who expanded in the downturn are going to see big profits from economies of scale, smart acquisitions and expanded production.

On another note, I’m also seeing a lot of growers moving in a direction I’ve been a proponent of for several years now: focusing on a core competency and sticking with it. Farmers are traditionally good at growing crops, but almost always leave marketing and sales to others with a much better handle on those skills.

For most cannabis growers the same thing is true. However, because of the nature of the formerly illegal business — in which most growers did sell their weed directly the end customer — many producers who transitioned to the legal market simply had no idea how deficient they were when it came to operations, packaging and sales.

Sometimes, I’ve felt sorry for the folks who have shown me their amateur logos and packaging designs. Oftentimes these companies are destined to fail, but I didn’t want to be too harsh on good people who meant well, but had little to no experience in mainstream consumer goods.

This part of the business is evolving rapidly. Farmers are focusing more on good business fundamentals. They’re planting the right cultivars for their region and moving away from silly stoner names for the “latest and greatest” strains. Packaging designs have improved dramatically. And the smart money is focusing on getting good at a core competency instead of chasing the latest cannabis flavor of the month.

Things are looking up for growers learning to focus on their strengths and sticks to their guns.


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