How to Grow a New Cannabis Business Amid a Pandemic

How to Grow a New Cannabis Business Amid a Pandemic

Original Post: Cannabis Industry: How to Grow a New Cannabis Business Amid a Pandemic

[Canniseur: Not to sound cavalier, but the COVID-19 crisis has shaken things up, creating voids. Where there is a business void, there is opportunity. In addition, we need regulators to revisit cannabis regulations and put rules into effect that better support small businesses. Read these business tips on how you can adapt to this fast changing business environment.]

By understanding where the challenges and opportunities lie, cannabis businesses can thrive. Using sound marketing, PR and e-commerce tactics can be the key to weathering the storm.

The COVID-19 crisis is plunging the global economy into recession, changing consumer behavior and the world of business. Cannabis businesses are no stranger to operating in a challenging landscape. The constantly evolving legal status, regulatory hurdles and social stigma has forced founders in this space to be nimble and more financially wise with their capital.

While the market has experienced a seismic shift that has already attracted investors to inject capital into the cannabis industry and seen neighboring industries, including tobacco, alcohol and pharma, come into the fray, COVID-19 will change key industry structures and operations. To succeed and cultivate value, cannabis companies must adapt to the new realities of the marketplace to be well positioned for continued growth after the pandemic subsides.

With social distancing guidelines suddenly forcing brick-and-mortar retailers to move their businesses and customer experiences online and disruptions to the supply chain due to international travel and business directions, some businesses will struggle to stay afloat.

As consumer behaviour and online shopping patterns adjust to a new way of living (affecting B2B sales, online ordering, deliveries and manufacturing), leadership and strategic thinking will be paramount.

By understanding where the challenges and opportunities lie, cannabis businesses can thrive. Here are some focus areas and tactics to consider:

  1. Targeted consumer segmentation through social media

When starting a cannabis business, it is key to understand who your core consumers are and what they want from their products. This has become even more acute because of the pandemic with consumers flocking to all sorts of health-focused products including CBD.

With everybody spending more time online, social media use is on the rise. Executing a social media plan to include influencer outreach can increase brand visibility, build a solid consumer base and create brand advocates.

Instagram is essential to a cannabis business building an online presence but it’s important that it doesn’t become a “hard sell, please buy me” channel. Plan and make Insta-worthy content that educates and entertains followers to increase engagement, click-through rates and leads. Brands may want to pair with an influencer on either a gifting or paid-for basis which will mean the brand appears in a potential customer’s feed as they interact with their favourite accounts.

PlugPlay, a California cannabis brand, stays relevant with creative posts like these.

The art is finding key influencers whose audience is one that you would like to interact with. This type of positioning will allow cannabis businesses to reach a new audience or group of people.

  1. Marketing and PR

In times like these, many companies choose to pull back on communication activities and expenditures for fear of spending too much for what they perceive as little return, however, marketing and PR, when executed well, can be the lifeline of any business.

With so much noise in the market about the “next best thing in cannabis”, effective marketing and PR can distinguish brands that are credible and offer a strong value proposition to those that are all smoke and mirrors.

The current needs of businesses and consumers are much different than they were just a few short months ago, so it’s important to understand these needs and spending habits while combatting negative perceptions of cannabis.

As cannabis companies are not able to advertise like mainstream companies, a strong public relations and marketing strategy will enable firms to communicate their identity, build trust, shift perceptions through media coverage, enhance reputations and reach customers, partners and investors.

  1. Cost cutting

Businesses in every sector are cutting costs to keep their businesses afloat. This needs to be done strategically and requires senior leadership teams to explore cost reduction strategies and streamline non-essential costs.

This may mean further consolidation of cannabis companies and supply chains to manage cash flow and maximise resources. Companies may even look to create strategic partnerships with complementary businesses in the industry or push some firms towards mergers and acquisitions.

Business models will evolve as cannabis companies identify inefficiencies and reconfigure their operations and messaging. This could range from assessing their R&D capabilities, agricultural assets, manufacturing chains or route to market.

  1. E-commerce capabilities
Pivoting to e-commerce is nothing new, but getting creative with product offerings and marketing initiatives will set you apart from the typical CBD retailer

The postponement of countless CBD Expos, trade shows and cannabis conferences are creating new demand and opportunities for businesses. To reach prospective wholesale clients, investors and connect to their customer base, firms are entering the digital marketplace. Digital events, Zoom investor pitch panels and email marketing and sampling is on the rise and expected to grow over the coming months.

CBD brands should work in parallel with their retail partners to influence product samples in digital offers and create a touchless transaction. Buying products online is going to become a permanently entrenched habit, even when restrictions are fully lifted so it’s worth looking at how technology can support and enhance sales while offering a smooth customer experience.

  1. Industry Relationships

Everyone in the cannabis industry will be affected by COVID-19 so maintaining positive relationships is vital in these tough times. Calling investors or partners to tell them what is going on with your business or checking in on others in your ecosystem means information can be shared to iron out any issues and help generate ideas to future proof the business. “A problem shared is a problem halved!”

COVID-19 is creating incredible business challenges. As we navigate the new normal, it’s important to adapt and grow. As more products come to market and brands/services develop distinguished offerings, expectations will change so cannabis businesses need to be ready for greener pastures.

The Hottest Edibles Brands in the United States Right Now

The Hottest Edibles Brands in the United States Right Now

Original Post: Cannabis Industry: The Hottest Edibles Brands in the United States Right Now

[Canniseur: I’m not into edibles very much, except on long international flights. These days, I’m not on those long ocean jumping flights. COVID-19 has changed my travel completely, so I haven’t consumed much in the way of edibles lately. Back then, a 10mg Indica gummy was just the thing to knock me out for 8 or so hours. I know that many consumers love edibles and sometimes it’s good to know which brands consumers like best. I’ve consumed several of the brands on this list and consumers know best because these brands are at the top. The only problem with this list is consistency from state to state because the products need to be crafted locally.]

The Brand Marketing Byte showcases highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies.

In this week’s Byte, we’re taking a look at the top edibles companies in the country. Using a scoring methodology that factors in a wide variety of data sets, Pioneer’s algorithm tracks brand awareness, audience growth and engagement. Using more than 80,000 relevant data points per week, they analyze business activity across social media, earned media and web-related activities.

For April 2020, here are the top 25 hottest U.S. edibles brands:

  1. Kiva Connections
  2. Wyld
  3. Tyson Ranch
  4. Wana Brands
  5. Serra
  6. STIIIZY
  7. 1906
  8. Kushy Punch
  9. Coda Signature
  10. Kush Queen
  11. PLUS
  12. Theory Wellness
  13. Incredibles
  14. Kikoko
  15. Dixie Elixirs
  16. Fairwinds
  17. Deep Roots Harvest
  18. Willie’s Reserve
  19. Chalice Farms
  20. Care By Design
  21. Beboe
  22. District Edibles
  23. Bhang
  24. Satori
  25. Betty’s Eddies

The post The Hottest Edibles Brands in the United States Right Now appeared first on Cannabis Industry Journal.

Comparable to Organic:  How This California Company Aims to Certify Cannabis

Comparable to Organic: How This California Company Aims to Certify Cannabis

Original Post: Cannabis Industry: Comparable to Organic: How This California Company Aims to Certify Cannabis

[Canniseur: OK, cannabis crop growers who are growing for adult use or medical use cannot put a “USDA Organic” label on their product. Given the Schedule 1 state of cannabis, there’s no reason this company couldn’t set up a list of regulations, get together with other states where medical and/or adult-use is available and make a set of regulations for growers that would give them a “PGA Organic” certification along with a little label to put on packaging. Just ask me what PGA stands for if you can’t figure it out.;-) The point is this could be an almost national certification, done privately.]

Cannabis that contains more than 0.3% THC is not eligible for USDA organic certification, due to the crop’s Schedule I status. While some hemp farmers are currently on the path to obtain a USDA organic certification, the rest of the cannabis industry is left without that ability.

Growers, producers, manufacturers and dispensaries that utilize the same practices as the national organic program should be able to use that to their advantage in their marketing. Ian Rice, CEO of Envirocann, wants to help cannabis companies tap into that potential with what he likes to call, “comparable to organic.”

Ian Rice, CEO of Envirocann & co-founder of SC Labs

Rice co-founded SC Laboratories in 2010, one of the first cannabis testing labs in the world, and helped develop the cannabis industry’s first testing standards. In 2016, Rice and his partners at SC Labs launched Envirocann, a third-party certification organization, focused on the quality assurance and quality control of cannabis products. Through on-site inspections and lab testing, Envirocann verifies and subsequently certifies that best practices are used to grow and process cannabis, while confirming environmental sustainability and regulatory compliance.

“Our backyard in Santa Cruz and the central coast is the birthplace of the organic movement,” says Rice. California Certified Organic Farms (CCOF), founded in Santa Cruz more than 40 years ago, was one of the first organizations in the early 1990s that helped write the national organic program.

“What we came to realize in the lab testing space and as the cannabis market grew, was that a lot of cannabis companies were making the organic claims on their products,” says Rice. “At the time, only one or two organizations in the cannabis space were making an attempt to qualify best practices or create an organic-type feel of confidence among consumers.” What Rice saw in their lab was not cannabis that could be considered organic: “We saw products being labeled as organic, or with certain claims of best practices, that were regularly failing tests and testing positive for banned chemicals. That really didn’t sit well with us.”

Coastal Sun Farms, Enviroganic-certified

At the time, there was no real pathway to certify cannabis products and qualify best practices. “We met with a few people at the CCOF that were very encouraging for us to adopt the national organic program’s standards for cannabis. We followed their lead in how to adopt the standards and apply a certification, building a vehicle intended to certify cannabis producers.”

Because of their background in lab testing they added the requirement for every crop that gets certified to undergo a site inspection, sampling, as well as a pesticide residue test to confirm no pesticides were used at all during the production cycle. One of their clients is Coastal Sun Farms, a greenhouse and outdoor cannabis producer. “They grow incredible products at a high-level, commercial scale at the Enviroganic standard,” says Rice. “They have been able to prove that organic cannabis is economically viable.”

The Envirocann certification goes a bit beyond the USDA’s organic program in helping their clients with downstream supply chain risk management tools (SCRM). “Because of the rigorous testing of products to get certified and go to market, we are getting way ahead of supply chain or production issues,” says Rice. “That includes greater oversight and transparency, not just for marketing the final product.”

A good example of using SCRM to a client’s advantage is in the extraction business. A common scenario recently in the cannabis market involves flower or trim passing the pesticide tests at the lab. But when that flower makes it down the supply chain to a manufacturer, the extraction process concentrates chemical levels along with cannabinoid levels that might have previously been acceptable for flower. “I’ve witnessed millions and millions of dollars evaporate because flower passed, but the concentrated final product did not,” says Rice. “We’ve introduced a tool to get ahead of that decision-making process, looking beyond just a pass/fail. With our partner labs, we look at the chromatograms in greater detail beyond regulatory requirements, which gives us information on trace levels of chemicals we may be looking for. It’s a really rigorous audit on these sites and it’s all for the benefit of our clients.”

Envirocann has also recently added a processing certification for the manufacturing sector and a retail certification for dispensaries. That retail certification is intended to provide consumers with transparency, truth in labeling and legitimate education. The retail certification includes an assessment and audit of their management plan, which goes into details like procurement and budtender education, as well as basic considerations like energy usage and waste management.

Fog City Farms, Envirocann-certified

While Envirocann has essentially adopted the USDA’s organic program’s set of standards for what qualifies organic producers, which they call “Enviroganic,” they also certify more conventional producers with their “Envirocann” certification. “While these producers might not be considered organic farmers, they use conventional methods of production that are responsible and deserve recognition,” says Rice. “A great example for that tier would be Fog City Farms: They are growing indoor with LED lighting and have multiple levels in their indoor environment to optimize efficiency and minimize their impact with waste and energy usage, including overall considerations for sustainability in their business.”

Looking to the future, Ian Rice is using the term “comparable to organic” very intentionally, preparing for California’s roll out of their own organic cannabis program. The California Department of Food and Agriculture (CDFA) is launching the “OCal Comparable-to-Organic Cannabis Program.” The program is obviously using the same language as Envirocann. That’s because Envirocann is going to be one of the certifying affiliates under the agency’s new program. That program will begin on January 1, 2021.

The post Comparable to Organic: How This California Company Aims to Certify Cannabis appeared first on Cannabis Industry Journal.

Optimizing Your LED Spectrum for Leaf Surface Temperature

Optimizing Your LED Spectrum for Leaf Surface Temperature

Original Post: Cannabis Industry: Optimizing Your LED Spectrum for Leaf Surface Temperature

[Canniseur: Leaf surface temperature? Really? Yes, even though this might seem a bit granular, it’s a thing when growing indoors. Obviously you can’t control this when growing outside where it really doesn’t matter because a grower can’t do anything about the sunlight falling on a plant. But inside, every single aspect of optimally growing cannabis is important. So yeah, I guess leaf surface temperature does matter.]

Every detail counts at an indoor grow facility. Indoor growers have complete control over nearly every aspect of their crop, ranging from light intensity to air circulation. Among the most important factors to regulate is temperature. While ambient air temperature is critical, growers will also want to measure leaf surface temperature (LST).

To illustrate, let’s say you keep your living room at a cozy 76 degrees. Then, if you place a thermometer under your tongue – your body is (hopefully) not at 76 degrees but is likely between a healthy temperature of 97 to 99 degrees.

A similar story can be told for cannabis plants grown indoors. A grow facility’s ambient air is often different than the plants’ LST. Finding an ideal LST for plant growth can be complex, but modern technology, including spectrally tunable LED grow lights, can simplify monitoring and maintaining this critical aspect.

Why Should Growers Care About LST?

Temperature plays a pivotal role in plant health. Many biochemical reactions contributing to growth and survival only occur within an ideal temperature range. If temperatures dip or spike dramatically, growers may witness inhibited growth, plant stress or irreversible damage to their crops.

The leaf is among the most important plant structures as it’s where most metabolic processes happen. Therefore, finding an optimum LST can improve growth rate and the production of metabolites such as pigments, terpenes, resins and vitamins.

Because many plants rely on their leaves for survival, it makes sense that leaves have their own temperature regulation system. Evaporation through pores in the leaf – known as stomata – can cool the plant through a process called transpiration. Up to 90% of water absorbed is used for transpiration, while 10% is used for growth.

The efficacy of transpiration is determined by the vapor pressure deficit (VPD), which refers to the relative humidity in the ambient air compared to the relative humidity in the leaf. If relative humidity is low, the VPD can be too high, which may cause plants to have withered, leathery leaves and stunted growth. On the other hand, a low VPD correlates to high relative humidity, and can quickly result in disease and mineral deficiencies. Higher humidity often results in a higher LST as transpiration may not be as effective.

When it comes to LST, growers should follow these basic guidelines:

  • Most cannabis plants’ LST should fall between 72 and 86 degrees – generally warmer than the ambient air.
  • LST varies depending on individual cultivar. For example, plants that have evolved in colder climates can generally tolerate cooler temperatures. The same can be said for those evolved in equatorial or temperate climates.
  • CO2 availability also plays a role in LST; CO2 generally raises the target temperature for photosynthesis.

How Does Light Spectrum Affect LST?

We know that CO2 concentration, specific genetic markers and ambient temperature all play an important role in moderating LST. But another important factor at an indoor grow is light spectrum – especially for those using spectrally tunable LEDs. Growers will want to optimize their light spectrum to provide their crop with ideal conditions.

A combination of red and blue wavelengths is shown to have the greatest impact on photosynthesis and, thus, LST. Photons found along the green and yellow wavelengths may not be absorbed as efficiently and instead create heat.

solsticegrowop_feb
Indoor cultivator facilities often use high powered lights that can give off heat

Optimized light spectrums – those with an appropriate balance between red and blue light – create more chemical energy instead of heat, thereby resulting in a lower LST. Using fixtures that are not spectrally tuned for plant growth, on the other hand, can waste energy and ultimately contribute to a higher LST and ambient temperature, negatively affecting plant growth. Consequently, measuring LST doesn’t only indicate ideal growing conditions but also indirectly illustrates the efficiency of your grow lights.

LED fixtures already run at a lower temperature than other lighting technologies, so indoor growers may need to raise the ambient temperature at their grow facilities to maintain ideal LST. Switching to spectrally tuned LEDs may help growers cut down on cooling and dehumidifying costs, while simultaneously improving crop health and productivity.

What’s the Best Way to Measure LST?

There are several tools available for growers to measure LST, ranging from advanced probes to specialty cameras. However, many of these tools provide a reading at a specific point, rather than the whole leaf, leading to some inaccuracies. Temperature can dramatically vary across the leaf, depending if parts are fully exposed to the light or in the shadows.

Investing in a forward-looking infrared camera (FLIR) gives indoor growers a more accurate picture of LST and light efficiency. That being said, growers should not only measure leaves at the top of the plant, but across the middle and bottom of the plant as well. That way, growers receive a complete snapshot of growing conditions and can make changes as needed.

At an indoor grow facility, it’s not enough to only measure ambient room temperature. Of course, this aspect is important, but it will paint an incomplete picture of plant health. Measuring LST gives growers nuanced insights as to how plants respond to their environment and how they can better encourage resilient, healthy growth.

Using spectrally tunable LEDs makes achieving LST easier and more cost-effective. Lights with optimized spectrums for plant growth ensure no energy is wasted – resulting in superior performance and efficiency.

The post Optimizing Your LED Spectrum for Leaf Surface Temperature appeared first on Cannabis Industry Journal.

The CalCannabis Appellations Project Is About to Spark a New Chapter in Place-Based Branding

The CalCannabis Appellations Project Is About to Spark a New Chapter in Place-Based Branding

Original Post: Cannabis Industry: The CalCannabis Appellations Project Is About to Spark a New Chapter in Place-Based Branding

[Canniseur: In the wine business, provenance (where the wine is from) is everything. Where the grapes were grown should be an indication of the character of the wine, if not the quality. Why should cannabis be any different? While the jury is out on cannabis appelations (place names), it will be very interesting to find out if cannabis follows the same rules as Vitis vinifera (wine grapes like cabernet are all in this genus and species) as far as place, growing, flavor and effect. Will you be able to tell that a particular bud is from Humboldt by its taste and effect sometime in the future?]

Connoisseurs know that pairing a fine cut of steak with a Napa Valley cabernet sauvignon is a sure winner. But how many are aware that pairing strawberry cheesecake with a certified Santa Cruz Blue Dream cannabis strain creates an equally delicate palatal synergy? Thanks to the California Department of Food and Agriculture’s CalCannabis Appellations Project (“CAP”), premium cannabis regions will soon have the potential to capitalize on such newfound awareness among discerning consumers.

For decades, cannabis connoisseurs have been willing to pay a premium for flower said to have been grown in certain regions or with certain techniques, but because of cannabis’ legal status, supply chains have been opaque. As a result, cultivators of distinct cannabis strains struggled to capture the full market potential of their products. That has begun to shift with implementation of California’s Cannabis Track-and-Trace System. The costs associated with implementation of the METRC1 system have been bemoaned by many in the industry, but there is also tremendous potential value in having the most transparent supply chain in the world. The CalCannabis Appellations Project is the vehicle through which brands will be able to harness that value.

The underlying premise behind the CalCannabis Appellations Project is that the distinctive qualities of a cannabis product are often attributable to where and how the plant is grown. Through this project, CalCannabis is developing a statewide appellations system2 that will allow qualifying licensed cultivators to effectively communicate information about their cannabis crops (i.e., the standards, practices and/or varietals used) through labels, advertisements and other marketing techniques. It will also prevent disingenuous cannabis cultivators from making inaccurate claims about where and how a product is grown, which protects the integrity and value of the appellation.

What is an appellation?

In general terms, an appellation is an identifying name, title or label that can be legally defined and protected. Appellations are most commonly used in the wine industry to geographically identify the origin of grapes in a particular bottle. This place-based identification system comes from an understanding that certain regions have unique environmental and growing characteristics, which result in a product that cannot be produced from other regions even when the same varietals are used. Famous wine appellations or American Viticultural Areas (AVAs) in California include the Napa Valley and Santa Ynez AVAs, and sub-AVAs such as the Russian River Valley AVA, located within the larger Sonoma County AVA.

Recognizing there are also growing regions that produce uniquely distinctive cannabis, CalCannabis is developing a process for:

  1. Establishing an appellation (i.e., identifying regions that produce distinctive cannabis and defining standards, practices and/or varietals that must be used in those regions to qualify for an appellation); and
  2. Qualifying to use a particular appellation once they are established (i.e., determining the cannabis cultivators that can legally label or market themselves as belonging to a particular appellation).

While the state has not released program details, it’s likely that cultivators will have to demonstrate their outdoor-grown cannabis is distinctly unique.3 CalCannabis has until Jan. 21, 2021,4 to establish these processes, but a draft is expected to be released by early January 2020.5 This is an opportunity for cultivators to organize and participate in the process to define and create unique local appellations.

What are the benefits of an appellations system?

Napa wine country
Image: James Faulkner, Flickr

Appellations benefit both cannabis cultivators and consumers. It allows small farmers to capture the value that consumers place on unique and local cannabis products. Allowing for product differentiation through an appellations system will prevent cannabis from becoming a commodity—a situation that could result in indistinguishable products and a single market price for cannabis regardless of how or where it is grown. Thus, an appellations system protects not only local economies and farming communities, but also consumers that care about the origin and growing practices of their cannabis.

A criticism of appellations, particularly in the wine industry, is that they can disincentivize innovation and industry growth when strict growing practices and standards are required to be a part of an appellation. This will be an important consideration as CalCannabis establishes its appellations system.

County of Origin

In addition to setting up an appellations system, the CalCannabis Appellations Project will expand upon current county of origin regulations. Unlike an appellation designation, the county of origin designation is designed to be much more inclusive—it can currently be used on any cannabis product as long as 100% of the cannabis is grown within the designated county.6 Whereas an appellation will communicate information about the quality of a cannabis product and how it was produced, a county of origin designation is more like a “Made In” label. For example, a county of origin designation can be applied to indoor cannabis whereas an appellation will likely only include sun-grown cannabis.

There is also a desire to allow city of origin designations in addition to county of origin designations, which would enable products grown wholly within the political boundaries of a city to further differentiate themselves.7 As the legal cannabis landscape changes nationwide, it may also be important to have a statewide appellation allowing products to be marketed as “Grown in California.

What should cannabis cultivation regions be doing now?

After CalCannabis releases a draft process for establishing an appellation, the next steps will be clarified. However, not everyone is waiting. For instance, growers in Mendocino County have already started to organize.8 The Mendocino Appellations Project divided the county into 11 unique subregions based on regional growing conditions and practices that could potentially be turned into appellations in the future. The goal of the appellations outlined by the Mendocino Appellations Project is to protect cannabis products coming out of Mendocino County and preserve the region’s growing heritage.

A group in Sonoma County is also discussing the establishment of appellations with the hope that it will help differentiate their cannabis and draw attention to the unique microclimate and soil structure in parts of Sonoma County.9 The groups involved in these discussions also believe it will allow cultivators to develop strict growing standards and to protect certain strains, while creating new jobs and encouraging agritourism. Appellations will become increasingly important as sophisticated consumers begin to select quality cannabis that aligns with their preferences.


References

  1. METRC is the third-party-owned software contracted by California authorities to implement the commercial cannabis track-and-trace system “from seed-to-sale.”
  2. Passage of Senate Bill 185 calls for the use of the term “appellations of origin” instead of “appellations.”
  3. Based on comments made during the October 23 Cannabis Advisory Committee Meeting.
  4. Business and Professions Code Section 26063.
  5. Based on comments made during the October 23 Cannabis Advisory Committee Meeting.
  6. Business and Professions Code Section 26063(a).
  7. Based on comments made during the October 23 Cannabis Advisory Committee Meeting.
  8. https://swamiselect.com/mendocino-appellation-project/
  9. https://www.sonomacountygazette.com/sonoma-county-news/cannabis-appellations-the-small-cannabis-farmers-elyon-cannabis.

The post The CalCannabis Appellations Project Is About to Spark a New Chapter in Place-Based Branding appeared first on Cannabis Industry Journal.

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