EVEN AS DEMAND for cannabis continues to expand internationally, consistent cultivation outcomes and profitable growth are increasingly inhibited by inefficiencies of scale, a lack of whole-systems approaches to integrated cultivation strategies and an unmet need for standardized, data-driven processes and analytics tools.
Emerging and aspirational global entrants into the cannabis space often lack trusted pathways to proven, replicable, data-driven cultivation strategies. Such methods are needed to offset increased risk caused by limited availability of talented workers with professional cannabis experience and domain expertise, as well as a scarcity of cannabis-specific cultivation resources. These bottlenecks are hampering success in new markets.
At the same time, stringent regulatory compliance standards and a fractured international marketplace add complexity and uncertainty to the creation of a clear business model for cannabis cultivation. This can muddy the waters for investors seeking to anticipate the fundamentals influencing the return of capital.
Learning As We Grow
Fortunately, the brief history of North American cannabis teaches some very valuable lessons that, if understood and applied correctly, will help mitigate these risks and save both time and money for new cannabis companies entering the market.
Regulatory and price pressures are currently driving a new wave of efficiency innovations across the entire North American cannabis value chain. Successful growers are implementing data-driven cultivation strategies to ensure profitability in difficult and variable conditions. Businesses that have profitably adapted to the current conditions have done so in ways that can be measured, evaluated and understood. This process offers strong guidance for any new businesses navigating an entry into the world of cannabis.
Here are four areas of focus that any international cultivation company should prioritize:
1. Start with simple, proven cultivation SOPs and use data analysis to drive continuous improvement. Our job as cultivators is primarily to eliminate plant stress by providing a balanced, homogenous and consistent environment in which our selected genetics always reach the maximum of their potential.
Here’s how to stay on this mission:
Choose a simple grow strategy based on low-risk, proven “set points” and automate their parameters through a comprehensive cultivation management system (CMS).
Once this strategy produces results, use harvested cultivation data as a guideline for integrating improvements that push the plants a little harder to improve production profiles.
2. Forge strategic partnerships and trusted relationships. Export contracts and international offtake agreements are the primary hedge against local and regional sales variability in countries where both sales channels exist. There is still more demand for high-quality flower than supply in many countries, providing first-mover advantages with second-mover levels of risk to quality cultivators.
Academic and medical research parentships can create additional revenue streams while providing direct benefits to the field of cannabis-based medicine.
3. Plan for a changing future. Some international businesses are wisely planning a hemp-to-THC transition in anticipation of friendlier regulations for adult-use cannabis in more global markets. For growers, these transitions can be smooth and non-disruptive to internal ops—if the right long-range strategies are in place. Use a modular cultivation model to anticipate future scaling needs.
4. Learn from experienced legacy cannabis growers and from traditional crop agriculture. North American cannabis has a rich history of legacy cultivation and is responsible for many incredibly innovative and successful cultivation practices. As the regulated cannabis market matures and consolidates, many of these tried-and-true methods have been forced through the bottlenecks of compliance, efficiency and the ability to scale. Some but not all practices and practitioners have made it through this shale-out period.
Naturally, technologies and cultivation methods from traditional crop agriculture are increasingly integrating with legacy cultivation strategies as market conditions drive the need for innovation and margin protection. A blend of legacy cannabis, modern-era cannabis and traditional agriculture insights should be considered and encouraged as part of any company culture.
Marketplace Earth
The future of cannabis is global. Its continued acceptance across the world is inevitable and its many benefits to society have just begun to be realized. Our industry is exhilaratingly collaborative and fast-paced while somehow also being maddeningly slow and fractured. Innovators are combining exciting new tools with proven methods to deliver profitable cultivation in fluctuating market conditions. These lessons have been hard-won in North American cannabis and offer a strong foundation from which to build the future.
