Welcome to Volume 5 of Cannabis Business Times. It’s hard to believe we are entering our fifth year of publication. In that time, our team has produced 32 issues, 3,200 pages of content and hundreds of articles—not to mention the thousands of articles available on cannabisbusinesstimes.com—to help you be successful in your cannabis endeavors.
In honor of Volume 5, I want to share the five biggest things I’ve observed about the cannabis cultivation industry since I first started covering cannabis.
1. It’s dichotomous. This industry’s roots are buried deep in history, counterculture, devastation from the failed drug war, advocacy and passion. These roots have been cultivated through generations, and they are often at odds with the current groundswell of “big money” sweeping in and profiting from legalization. It’s an extreme version of big-box retailers taking over Main Street, only this Main Street often led to incarceration and its aftermath.
2. It’s volatile. Stock share prices, cannabis wholesale and retail prices, zoning restrictions, regulations, compliance requirements and tax laws—they can all change in the blink of an eye.
But another volatile area that doesn’t receive as much publicity is leadership and staffing: It is one of the most significant variables to account for. It’s not unusual to encounter companies who have had several head cultivators in a year. Finding and keeping qualified employees is a huge challenge. As Bloomberg reported Dec. 2, 2018, “The chief executive officer of Aphria Inc. had just hired 50 people to work in the pot producer’s greenhouse in Leamington, Ontario and by the end of the first week all but eight had quit.” And the impact of that mass exodus? Aphria was “forced … to dispose of almost 14,000 cannabis plants in the quarter ended Aug. 31 after they weren’t harvested in time, costing it nearly $750,000 (C$1 million),” Bloomberg reported.
3. It’s a magnet. Everyone wants in. This is good news for those looking for investors. ($718 million was invested in cannabis cultivation and retail businesses in 2017, according to Forbes, and that number will skyrocket when 2018 figures are assessed.) But such an influx of capital draws comparisons to the dot-com era and the California Gold Rush: It makes the industry more competitive and all-the-more volatile.
4. It’s creating jobs. The heavy turnover rates and the challenges they create in many industry segments are caused by a good problem: the increasing number of cannabis jobs. According to the Bloomberg report, “Between them, eight of Canada’s largest cannabis companies are now actively recruiting for approximately 1,700 positions.” On a larger scale, a 2017 “report from New Frontier Data projects that by 2020 the legal cannabis market will create more than a quarter of a million jobs. This is more than the expected jobs from manufacturing, utilities or government jobs, according to the Bureau of Labor Statistics,” per Forbes.
5. It helps our communities. Cannabis legalization has addressed many civil rights issues, and will continue to do so moving forward. The tax revenue cannabis brings to city and state governments is often allotted for initiatives such as combating opioid addiction and funding public education, among other similar programs.
The industry is maturing fast, and its members are proactively choosing to join non-required local initiatives to make positive changes in their communities.
The vertically integrated Verdes Foundation in New Mexico provides funding to many organizations, including: Epilepsy Support & Education Services, Inc., New Day Youth & Family Services, Wildlife West animal sanctuary and Students for Sensible Drug Policy. In Colorado, producer/retailer Lightshade partners with 12 local charities that fight homelessness and hunger, among other initiatives. Vertically integrated Caliva in California partners with and educates local wellness practitioners (doctors, nurses, etc.) to help them expand their pain-solution offerings and increase their cannabis patients’ quality of life. Cultivators, such as Colorado-based LivWell, are sponsoring highways. The Canadian cannabis giant Aurora Cannabis dedicates employees specifically geared toward the company’s corporate responsibility efforts. (You can learn more about Aurora in our cover story this month.) And the list goes on.
Here’s to another year, and even more lessons, in this crazy, but wonderful industry. May your businesses and communities thrive!
Happy New Year!