Surviving Legalization: Four Strategies-Get Big, Get Better, Get Together, or Hide

 

bud in the sun

[By Kym Kemp]

As marijuana growers search for ways to stay afloat on the stormy seas of legalization, Leafly, one of the largest cannabis websites in the world, is publishing a series of articles on the four possible strategies they see. They write,

From what we’ve seen in California’s medical market, as well as in the four adult-use states, California’s cannabis farmers will have to choose one of four potential career paths. They can:

  • Scale up to industrial-size commodity production
  • Build a high-end craft-scale niche brand
  • Form or join an agricultural cooperative
  • Retire or remain underground and feed the illicit market in non-legal states.

In other words, get big, get better, get together, or hide.

The Leafly series immersed itself in the first three strategies.

The first article explains the reasoning for dividing into these four strategies and then dives into growing big with the story of Jai Malloy who began as a trimmer in the Emerald Triangle and now co-heads a company that is “breaking ground on a $9 million, 108,000 square-foot greenhouse with a full acre of plant canopy. The article examines this strategy. One point it makes is that

by producing cannabis (or anything) in great volumes, you can reduce your per-pound production costs by spreading your expenses (the cost of a greenhouse, say) over a greater number of pounds. These per-pound savings mean you can wholesale each pound at a lower price, which keeps your retailers happy.

The second article in the series goes deep into craft cannabis–making a superior product. This piece focuses on Sam Edwards, on the Sonoma Coast, who not only grows the flower but extracts it and produces a high-end vape cartridge that sells for around $50. One of the many points it makes is that craft cannabis cultivators can produce a unique product. The author points out,

Where large-scale cannabis producers wanted the flexibility to grow cannabis anywhere, the boutique model goes the other way, exploiting the complex links between product and place. “Every valley and micro-climate has cannabis farmers who have learned what works best in their areas and what doesn’t,” says Edwards. Ultimately, he says, California could see a cannabis variant of terroir, the French concept that links specific agricultural specialties to specific locations.

The third article navigates what happens when marijuana growers band together. This article looks closely at Emerald Grown founded by Amber and Casey O’Neill in Mendocino. Some of the many strategies the article highlights are:

By sharing seeds, expertise, and other resources, for example, co-op members can significantly boost their individual yields.

By pooling their cash, they can afford attorneys and consultants to navigate local regulations. And, most significantly, by coordinating harvests and pooling their crops, co-op members can deliver the large bulk shipments that California’s cannabis wholesalers increasingly demand.

The fourth strategy, hide, is also looked at in the third article.

Just how many of California’s tens of thousands of small farmers will end up taking this fourth option is impossible to know right now. But if the numbers are as large as some industry observers fear, it could have a huge, and not entirely positive, effect on the success of legalization in California and beyond.

For anyone interested in the cannabis business, this series will fill in gaps in your knowledge and help you understand the decisions marijuana growers face.

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21 comments

  • On to the next one

    Cartels who primarily had control of marijuana imports and distribution in United States until recently Have lost there juggernaut and moved there focus on to a more lucrative trade. which is destroying our country.I care far more about this epidemic than concern over Wall Street money taking over ” legal pot”.

    http://www.nbcnews.com/news/us-news/mass-casualty-event-ohio-county-now-tops-u-s-overdose-n773936

    Overdoses are the leading cause of death for Americans under 50 — they now claim more lives than car crashes, gun deaths and the AIDS virus did at their peaks.

    In recent years, the synthetic opioid fentanyl been flooding Dayton and other American cities, trafficked by Mexican cartels who have turned the extremely potent drug into a money-maker.

    • Ummm…there isn’t one cartel that makes fentanyl. It’s made by pharmaceutical companies. If cartels are distributing it they’re getting it wholesale from the same people from the same people making the legal brand

      • Not true, chemical variants and synthetic isomers are produced in several countries, not as pure but still quite dangerous. And unpredictable.
        Which begs the question, what will be next? Will we have a new drug? Who’s going to make it?
        GW pharmaceutical presently working on synthetic cannabinol, which could conceivably replace your local product.

        Might be time to bail, the fifth strategy!

        Get a job, get out now!

      • Chemistry is chemistry, no matter where the laboratory is located or how small it may be. Portable labs have been a proven model ever since home-made LSD came around. And now, meth. Check out “Breaking Bad” for a demonstration. I don’t understand how you concluded that “there isn’t one cartel that makes Fentanyl” mystifies me.

  • Option #5 Get a government or special utility district job

    Previously acquired skills easily transfer to your new career.
    -Drive around in a brand new truck
    -Easy work, lots of breaks, plenty of vacation days.
    -You can still belong to the mob (union).
    -You can still make money on a side job (political favors).
    -And last but not least, you still get a fat pickle barrel full of cash for retirement every year (CalPERS).

    • Ha Ha! True words!

    • Thatsauceisboss

      “Easy work, lots of breaks” not at my spot homie. Bet u wouldn’t last two days at my spot. Growing ain’t easy. Maybe if you got like ten plants in your backyard it’s easy.

      • So true, nothing but work.

      • Feel u growing is a shit ton of work. Its year round and never stops. Only somebody that has never done it would make a statement like that. Because they see growers in big trucks and think they didnt work for it. But trust me that shit is hard work.

      • Triniboldticino

        He’s talking about option #5, getting a job with the government and slopping at the taxpayer trough, not growing. I have to agree with him. I have friends that retired fat and happy from government with more cash than they know what to do with. The tough part for me is to keep biting my tongue because they feel they “deserve” it.

        • Dale Norwood (Cutten) local

          Why don’t you apply to your local fire department or become Eureka police? Let’s see how easy your fucking paycheck is then [edit]. You wouldn’t cut it one shift.

  • The Hermit of Grizzly Mountain

    Steve Martin warned us against getting small:

    “I like to get small. It’s a wild, wild drug. Very dangerous for kids though, because they get really small. I know I shouldn’t get small when I’m drivin’, but, uh, I was drivin’ around the other day, you know [whistles tunefully] and a cop pulls me over. And he goes, ‘Hey, are you small?’ I said, ‘No, I’m tall, I’m tall.’ He said, ‘Well, I’m gonna have to measure you.’ They’ve got a little test they give you; it’s a balloon, and if you can get inside of it, they know… you’re small. And they can’t put you in a regular cell either, because you walk right out.”

  • Pot blocks: obstacles keep small business owners from a multibillion-dollar market

    https://www.theguardian.com/society/2016/dec/31/legal-marijuana-pot-cannabis-dispensary-small-business-regulation

  • Jorge Cervantes

    Upon listening to this evenings weed program on KMUD. Sounds like even Tim Blake feels somewhat let down with all this new frontier of legalization that he was part of lobbying for. He spoke in disappointment of Steve’s 47 acres of Commercial Greenhouses in Salinas Valley that have been harvesting dep for months now. He spoke of his hopes and visions for a possible future to survive this over supply of commercially produced product. It didn’t sound very promising for ol’ Tim. I like Tim Blake i think he genuinely had the community in mind as he lobbied for legalization. I think he know realizes he handed the keys over to corporate America.

    • I know the situation well enough to say, he may have cared for the community, but he cared far more for himself. He knew he was giving the keys away, he thought he would get to at least ride in the backseat. Now he gets he was played.

  • or how but get a job you lazy assholes. oh and stop lying about your income and picking up medi cal and welfare.

  • Over here in the valley and Sierra/Cascade foothills, only option 4 exists because of the bans.

    That’s bad for struggling folks who made ends meet with herb, but it’s also creating perverse incentives to ship out of state.

    Local control was sold as the cornerstone of Prop 64, but it looks more like its Achilles’ Heel to me.

  • I wonder where the 215 patient ends up in all of this. I know for legality right now you must grow for medical use. It seems to me that if you represent a medical patient by using their 215, you should be providing them with something. A couple of collectives used my 215 and I didn’t get anything. No how are you doing. No do you need any medicine. I personally think it is fraud.

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