While the landscape of licensed cannabis producers is expanding at an incredible rate, the number of businesses that are thriving in the industry remains quite low. This is due to a lack of expertise when it comes to laying down a solid foundation to scale a business on.
Rather than carefully considering a strategy and patiently deploying its constituent elements, competitors are more concerned with entering the market quickly and aggressively, this at the expense of costly and avoidable miscalculations along the way.
Holding steadfast to business fundamentals may not be the most exciting option at times, but it’s always the most effective way to put the probability of continued success on your side. With this thought in mind, here are four pillars every licensed cannabis producer can adopt to gain a sustainable foothold in the market.
Perhaps the most important way to give your cultivation operation a long runway is to have a system in place that helps you comply with cannabis regulations. Because The Cannabis Act is a complex piece of legislation, it can be difficult to abide by it without cutting into the time you’d otherwise be spending on moving your business forward.
In the interest of reclaiming this time, you should consider partnering up with a cannabis compliance software provider like Ample Organics, whose seed-to-sale software can track your plants throughout their lives and enable you to supply regulators with all the information they need.
The data points regulators care about fall under the umbrella of Good Production Practices, which are rules in place to ensure that the quality of your cannabis products lines up with their intended uses. Data points include:
- Methods employed to keep within THC and CBD variability limits in your cannabis products
- Pest control and microbial and chemical contaminant reduction management
- The details of your sanitation program covering every stage of production
- All documentation related to your up-to-date cultivation license
From a broader perspective, it’s your responsibility as a licensed producer to also follow Good Manufacturing Practices, which exist to ensure that all drugs are produced to rigorous quality standards.
The result of all this meticulous work is increased transparency and trust with governments and fellow producers, setting the stage for new ventures and partnerships that will establish your longevity in cannabis production.
2Profitable Market Share
Establishing dominance in a burgeoning industry means little if it proves detrimental to the sustainability of your business. Racking up debt and diluting existing shareholders as a means for growth cannot carry on indefinitely. At some point in the near future, your operation will have to back up brand awareness and market share with tangible earnings.
The bar for determining a winning product can be easily forgotten when your business is experiencing massive growth, and seems to be on the tip of everyone’s tongue, so it merits a mention: your return must exceed your cost of capital and have favorable prospects to continue to do so into the future. Passing this bar, over and over, is the only way to influence the industry on your own terms without compromising cash flow generation.
As you attract new clients, onboard more patients, and transform into a meaningful employer in your community, you’re going to need data analytics capabilities to keep up with demand and maintain your leadership position. That’s where business intelligence software enters the picture.
You can’t serve your clients without having a clear sense of their ever-evolving needs. The key is to have a readily accessible way of tracking and monitoring these needs to improve the quality of your business decisions. To this end, consider reinforcing your business with a cannabis management software platform capable of providing you with the market and product-level data.
That way, you’ll be able to compare client histories in every region of your operation and adjust your inventory as needed. You’ll also get a head start when it comes to planning for the future and getting ahead of your competition by making investments they simply don’t have the software-enabled power to see.
Allocating capital without a plan may work for a while if you’re lucky, but you’re less likely to make sound decisions due to resulting. Your best bet is knowing your business by the numbers, formulating a strategy based on them, and keeping to it in spite of short-term difficulties because you’re confident in the path forward.
4A Patients-First Mentality
Beyond producing a simple commodity, your responsibility as a cannabis cultivator is to provide patients with easy access to medicine that will ease their pain and allow them to live more fulfilled lives.
Maximizing margins may increase a venture’s bottom line in the long run, but the motivation behind it must transcend commercial interests to make a real difference. This is why, to improve your relationships with governments, clinics, and health agencies, the technology you use to onboard new patients must comply with high ethical and security standards.
You can exceed them by focusing on cannabis management software that encourages collaboration across industries, and inspires a sense of community among those you serve, by minimizing data errors and wait times, and having redundancies in place to make sure patients are matched with the right products to treat their respective conditions.
Given the extreme levels of excitement surrounding cannabis legalization and the growing number of cultivators to meet demand, it’s easy to believe that a rising tide will lift all boats and extend this belief indefinitely into the future.
Unfortunately, this is no more than a pipe dream, unless your business rests on a legal and technological foundation that allows it to flourish with integrity, efficiency, and meticulous regulatory compliance.
Rushing in to a new venture when the market is hot qualifies as herding behavior, the equivalent of buying high when fervour is at its peak, leaving little room for a satisfactory return. Instead of following the crowd, be bold and adopt a contrarian stance, one where careful deliberation and the efficiencies of software carve out your legacy over the long term.