Commercial cannabis growers must navigate a market with increasing levels of competition and consumers who are becoming increasingly discriminating in their preferences for quality products. In addition, state and federal regulations for this industry continue to evolve at a rapid pace, forcing commercial growers to constantly adapt. It should come as no surprise that running a profitable commercial cannabis cultivation business has become challenging in this climate.
While the specific challenges impacting your business may vary depending on whether you grow indoors or outdoors and the state in which your operation is located, there are certain issues that all cannabis growers must contend with. These include:
- High costs
- Oversupply in the market
- Difficulty in differentiating your products
Let’s examine the ways in which these issues are impacting commercial cannabis cultivation businesses and explore an effective solution that will help you rise above these challenges to differentiate your business as an industry leader moving forward.
Having the right team is critical to the success of your cannabis cultivation business. You need a highly skilled and experienced team of growers to maximize your yields and ensure your cannabis products are extremely high quality. Cannabis cultivation is a very labor-intensive process, which can drive up the costs associated with a workforce possessing this kind of niche skillset.
For this reason, labor becomes one of the biggest areas where you have an opportunity to cut costs if you’re able to establish a more effective and efficient growing process. Your equipment is a sunk cost – you already own it, and you need to leverage your existing equipment as best you can. But if you’re able to simplify your growing process and lower your labor costs, you can potentially streamline your team and more effectively manage your overall operational costs.
Another item driving up your costs is the nutrients required to nurture your plants. Most growing processes require the use of a variety of supplemental nutrients to improve yield and maximize quality. These nutrients can be very expensive, especially since they must be purchased for each new grow cycle.
Living Soil Can Help You Reduce Costs
One way to lower both of these costs is to grow your cannabis plants in living soil. Living soil is highly nutrient rich, providing everything your plants need to thrive. This allows you to cut down on both your labor costs and the cost of additional nutrients required as part of the growing process:
- Labor costs are reduced because less maintenance is required throughout the growing process. Your team doesn’t need to consistently add nutrients on a prescribed schedule to ensure the best quality products.
- Since all the nutrients you need are contained within the soil, you eliminate the need to purchase supplemental materials to nurture your plants. This further lowers your overall costs.
Oversupply in the Market
As the cannabis industry continues to expand nationwide, we’re seeing a larger influx of growers entering the industry. There are more cultivation operations than ever before, and this is causing the marketplace to get flooded with product. As a result, cannabis prices are dropping to the point where it’s becoming harder to turn a profit.
On average, retail cannabis prices fell approximately 20% between July 2021 and July 2022, marking the largest decline in any 12-month period in the history of the cannabis industry. Keep in mind that this figure represents a national average. In mature cannabis markets such as Colorado, Oregon, Washington and California, the drop in prices was significantly greater. The oversupply issue represents one of the greatest challenges to the profitability and long term sustainability of most cannabis cultivation operations.
Since market conditions make it difficult for commercial growers to dictate the price they charge, they must become even more diligent at controlling their costs. As discussed in the first challenge, this involves utilizing the most effective soil and growing methods to limit labor and nutrient costs, while maximizing the quality and yield of the plants produced.
Difficulty Differentiating Products
Most cannabis cultivation operations have the ability to produce quality flower with interesting strains and terpene profiles. Unless you’re able to go above and beyond this standard, it’s going to be virtually impossible to differentiate from every other commercial grower competing against you in an oversaturated market.
In order to differentiate, you’ll need to provide something other growers don’t provide, such as:
- Organic product
- Clean green growing process
These differentiators have become increasingly important because cannabis consumers are more educated than ever and as a result, their preferences are evolving. THC level is no longer the driving factor behind consumer purchasing preferences. Cannabis users are understanding the ways in which terpenes and cannabinoids work together to create an enhanced overall experience. They also understand that an organic, clean green growing process and product is healthier and delivers a better consumption experience.
In order to make your products stand out, you must now be able to produce flower that caters to the increasingly sophisticated preferences of consumers. Using a living soil product that is certified organic will deliver the quality consumers crave, and a clean green growing process will provide an additional differentiator to help your cannabis plants stand out against your competitors.
SoHum Living Soils® Delivers the Quality You Need to Overcome These Cultivation Challenges
SoHum Living Soils® is an award winning, triple certified living soil product that will help your grow operation stay on the forefront of the organic, clean green cannabis cultivation movement. It can be used for both indoor and outdoor cannabis cultivation applications. As a complete water-only living soil, it allows you to maximize your plant’s genetic potential while delivering the quality terpene profiles consumers demand. If so desired, you can add a few organic amendments to set even higher milestones with cannabinoid and terpene profiles.
Very few living soil products possess all three certifications achieved by SoHum Living Soils®:
- OMRI Listed® – This certification is required for a living soil product to be used in organic cultivation and production under the USDA National Organic Program.
- Clean Green Certified® – This provides the equivalent organic certification for cannabis products as the USDA organic certification provides for organically grown produce.
- OIM Registered – This certification ensures your materials are verified to comply with the California Fertilizing Materials Law and Regulations and the USDA National Organic Program Standards.
You’ll experience a variety of benefits when you use SoHum Living Soils® with your indoor or outdoor commercial cultivation operation:
- Lower operational costs
- Higher yield
- Optimized flavor
- Better product differentiation (organic product, high terpenes, optimized flavor, enhanced overall consumption experience)
When you combine SoHum Living Soils® with an automated watering system such as AutoPots, you can reduce these costs even more.
Talk to American Cannabis Company About a Trial Analysis
American Cannabis Company helps businesses design, build and optimize their commercial cultivation operations. We provide robust consulting and solutions to improve the efficiency and quality of your operation while addressing the challenges that threaten your long-term success – including price compression in the market.
Our team can work with you to design an indoor or outdoor grow operation that meets all clean green certified requirements. We can outfit your entire facility, or just a section for research & development testing.
As part of this trial analysis, ACC:
- Provides you with a guide to help you test the results you achieve from this process compared with your existing process
- Helps you perform a cost comparison analysis so you can see the impact you’ll have on your profitability
- Provides ongoing customer support and coaching to help your team optimize their growing process and get the most out of this trial analysis
If you’re an outdoor cultivation operation, this is the time to evaluate new products and processes for your upcoming outdoor grow season. We can get you set up with your trial analysis now so that you’ll have the results in time for your spring grow.
If you’re an indoor grower, talk to us about setting up a test when you begin your next grow cycle.
Contact us today to learn more about setting up your trial analysis.