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