Solid Concepts for Cannabis Farmers in 2018
October 6, 2017
There's a lot of talk and confusion about what to expect in 2018, and if you haven't had a chat with your local cannabis attorney and a cannabis consultant you probably should; at least if you plan on staying in the cannabis industry. In this industry the laws change frequently.
Here are a few basic concepts that any cannabis farmer should be thinking and talking about:
Businesses routinely adapt to changes in the markets, the economy, or society in order to stay in business and remain profitable. Cannabis farmers will have to adapt to the coming changes or close their doors. No one can predict exactly how these changes will come about or how long they will take, but they are coming, and the mere willingness to adapt will go a long way.
A solid strategy for dealing with the coming change is to work in cooperation with people that you previously viewed as competition. Working together with other cannabis professionals is a great force multiplier that will give you both access to more resources than if you were doing it solo.
If we are willing to adapt and take the time to educate ourselves about how to adapt before we act, we will survive. The future will be full of people who "used to be in the weed business” but failed to adapt to the new “cannabis industry.” It will also be full of cannabis entrepreneurs who did adapt and will guide the industry to a bright sustainable future. Which will you be?
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Marketing and Branding
Learn how you take your brand to the public to create demand. You should be well versed in marketing and branding techniques. Spend the rest of your career staying up to date on the subject.
If you are growing cannabis and hoping to sell it in the coming years you will have to get used to the idea that your farm and the internal resources that support and manage it is all part of a company now. You will now be referring to your farm and its products, and the people who work for you, as your company. You're going to stop using phrases like "I have a scene" and "I run a grow." Now, you'll be saying, "I'm the CEO of a cannabis company." Start practicing.
Now that you realize you're a legitimate company you must set your company up along already established guidelines for companies like yours. Talk to your cannabis attorney about the best way to set your company up in 2018. You'll want a good business plan. Make sure to have some workable knowledge of the various business types. Google it. Read.
If you don't have a logo, your product won’t have a real presence in the marketplace Your logo is the foundation of your public image that will give the consumer a visual impression of your company. Many times a consumer will choose one product over another simply because that company's logo speaks to them. Your company's logo should be able represent your company for decades to come. Your logo will be out there with the big boys, so get a great logo that will last, designed by a professional.
Most companies, farmers included, are currently self-distributing. Often times that means the same guy or gal who is growing the cannabis, making the product, and running the company is the same person who is knocking on doors to sell the product. This will change because it is just not efficient. If you are the head of a cannabis company, or any company, you should be spending time making decisions and plans to further that company. Every hour of every day that you are doing a task that can be performed by someone else; you are losing ground in the race to the top.
You have to put the products in front of people before they encounter it at the store. Demos are when you take your product out to an event like a cannabis cup or festival and let people make physical and emotional contact with it, often by giving out free samples and swag. Doing this creates a demand with the consumers that they will take with them to the store. If you did your job they will already have a positive relationship with your product. A good distributor will handle things like product demonstrations, customer appreciation days, and other events for you.
A budtender will not push a product they can't speak confidently about. They need proper training on your product if you expect them to recommend it to customers in a way that will make the customer feel that the budtender really does know and recommend that product. While customers may come in demanding a product that they are either familiar with through marketing, or that they already use, for the most part, the Budtenders decide what sells and what sits on the shelf.
All cannabis sold in California will have to be sold in compliant packaging. This is going to be one of the most significant changes for farmers to adapt to. Right now the package manufacturing companies are working to get both pre-existing and new packaging CPSC certified. This certification will be required for all cannabis packaging. A product coming out of a retail store will have to be in a child-proof container that is opaque and hides the product from plain sight. Non-compliant packaging will be removed from the shelves to make room for compliant ones. Don’t forget about the Primary Label and the Information Panel! These two labels will be required by law.
The Old Cooperative Model
There are still many growers and patients clinging to the old medical cooperative model, which will soon disappear. No amount of pleading or rational discussion about "the patients" will divert the politicians from money. In Oregon and Washington medical dispensary numbers have dropped drastically in favor of recreational dispensaries. In California, medical cannabis will become essentially a non-monetized market, run mostly by nonprofits that actually put cannabis in the hands of needy patients. This allows the real medical market to have much more freedom to regulate itself than the recreational cannabis market.
If you are hoping to legally sell your cannabis and your cannabis in any significant quantities, and it doesn't have a presence on social media, you're dreaming. There are a ton of cannabis companies on social media and for many people that will be their primary means of researching cannabis products. Instagram is a powerful tool for the cannabis entrepreneur. Buyers will demand products that are popular on social media.
The Black Market Option
Of course there will be a black market consisting mostly of interstate trade. That won't change until all the other states in America are producing enough legal cannabis to meet their own consumer demand. One has to realize that expensive regulation will force more farmers to the black market. Driving cross-country with California plates will be a guaranteed way to meet law enforcement officers from other states. Law enforcement will also find new ways to interdict the cannabis flow to the East, and seize funds coming West.
The bottom line? Increased risk. Lower profits.
No one controls the market; it is essentially an open platform. Things like regulation and consumer demand guide and sway the market, but at the most basic level it is individuals deciding where and how to spend their money that have the greatest influence over the market. When it comes to cannabis, popular culture has greater influence than directed marketing campaigns. If a famous artist like Snoop or Drake were to come out with a song about "outdoor," the consumers would start demanding outdoor cannabis at the retail point of sale. But for now, the rap songs glorify indoor cannabis and that's what is selling.
If we are willing to adapt and take the time to educate ourselves about how to adapt before we act, we will survive. The future will be full of people who “used to be in the weed business" but failed to adapt to the new "cannabis industry." It will also be full of cannabis entrepreneurs who did adapt and will guide the industry to a bright sustainable future. Which will you be?
Philip Northcutt is CEO of Sierra Gold Distributors, and 420FarmLandUSA. He started out as a guerrilla grower in the late 80's, moving to indoor, back outdoor, and finally into controlled greenhouses. Retired from growing, he now helps cannabis farmers prepare their companies for insertion into the supply chain. Reach him at: SierraGoldCEO@gmail.com