The Culling

The Current Marketplace

For those unfamiliar with the current happenings within the cannabis industry, I’ll give you a brief overview. Overall, things are looking grim, with most recreational companies operating at massive losses and traditional elements struggling to hang on by a thread. On both sides of the market people are hanging up their hats left and right. It seems as if the “the green rush” (oh boy, did I hate that term) is finally over. 

So, what does this all mean for everyone involved in the industry? First, it means increased pressure on smaller operators. Whether traditional or recreational, small growers are feeling the squeeze of oversupply, a glut of subpar mediocrity produced by their larger counterparts. 

Second, it means a flagrant burning of investor money as conglomerates fall victim to their own sunk cost fallacy, attempting to justify the hundreds of millions—if not several billions—they’ve already spent on massive facilities that became their own worst enemy. With larger conglomerates squandering investor resources, it’s safe to say there isn’t much left for anyone else.

So, things look bleak for quite a lot of people. But are they really? 

To answer this question, one of the things I really want to assess is how much of what is being trimmed right now is just the fat. I’ll be drawing parallels to natural processes in my assessment—I am a living organic farmer after all—looking at how nature might be showing us this current reckoning could be the best thing to happen to our industry yet.

The Culling

Let’s start off by rewinding about ten years, right before Colorado went legal. Back then, someone working in cannabis was a rarity and most certainly not the norm. Once legalization began spreading like wildfire though, the amount of people who worked in cannabis, or were invested in cannabis, or were looking to sink their claws into the industry in any way they could, rose astronomically. 

According to all these hopeful green-diggers (term coined by me just now, lol) legalization was the new way to make massive amounts of easy cash. In their minds, “drug dealing” had just gone mainstream. With a new, more accessible market at their fingertips, how could it not be super lucrative? 

The funny thing about drug dealing, though, is its profitability is inflated by its inaccessibility. It’s a simple equation of supply and demand: by making an illegal product permissible, you introduce a whole new kind of competition that just wasn’t there before. Save for a handful of quality-focused brands that can demand a higher price point for the effort they put into making an impeccable product, most producers are motivated by the easiest, cheapest way to make a buck. You don’t have to look at the history of capitalism to know such a narrow focus usually results in dismally subpar products, cheap, nonetheless. 

Fast-forward ten years now into the present, what are these green-diggers to do as the promise of easy cash from an always on-demand product is in fact not easy cash, for a not so on-demand product? 

Well, this is where the culling begins. On the surface a brutal, scary process, it’s really meant to separate those who were in this for the money from those who were always in it for the love. I think it’s safe to say even among the “veteran” trappers and growers, many were just in the game for how incredibly lucrative selling units at $4K+ a pound once was. (It’s why when I hear someone lamenting past price points when dinosaurs ruled the earth, I just shake my head.)

When you take the money out of it, there’s only a select few who are willing to go through the struggle of keeping a cannabis business alive. Fierce competition, slim margins, a need for incredible customer service: it’s now just the same as running any other venture, if not made even more difficult due to stringent regulation and taxation. 

The Seeds Will Sprout

At this point you may be saying to yourself, okay, so the industry is absolutely screwed, right? What’s going to happen? 

Well, here’s where nature can teach us a thing or two. Just as a fire scours a forest of dying trees or a flood ravages a parched valley, so too will the industry be renewed by its culling. Just like the fire clears the most vulnerable trees that have grown too old or too sick, and just as the flood washes away all the old decay in the sun-stricken valley. Left behind are the youngest, healthiest trees and seedlings with plenty of light to grow, able to take advantage of the abundant carbon released from the fire. Animals and plants in the once-parched valley rejoice in the vitality that the flood’s left-behind streams bring to the dried land. 

So too in our industry will the decay get swept away: the unhealthy hulking giants will be most susceptible to the fire and floods they themselves started. It’ll take time, but I assure you there’s only so much capital investors will put in before enough is enough. We see it happening with massive Canadian conglomerates, and it’s happening to a lot of major operators on the West Coast as well. 

Regrowth

What’s going to be left behind by the culling will be the individuals who were drawn to this for all the right reasons. People who believe this is their calling and are willing to fight for their spot in the sun. 

Once the seeds of change have begun to grow and the decay has fully dissipated, I hope for an industry filled with true stewards of this amazing plant. From the individuals working on the production side to the people involved with procurement, all will have truly earned it. The days of gimmicky marketing, knockoff brands, ridiculously shaped mylars, and more will start to fade away. In their place, cannabis as a cherished plant rather than cheap commodity will take center stage.

As passion takes over, we’ll see an increase in the quality of the plant at price points that are simply unseen. In one of my previous pieces, I wrote that craft is the future of the industry, which some readers took to mean I was saying expensive weed will win. In fact, it’s quite the opposite. What you’ll end up with is the best quality products at the most affordable prices as the competition, still fierce as ever, will push producers (large ones too) to create a superior product to maintain an edge.

Keeping Our Heads HIGH

In the end, the struggle will be worth it. We only need to look to nature to see that adversity serves to sharpen and focus. Just as plants develop stronger roots and more resilient stalks from strong winds, our industry will come back stronger than ever, renewed by its culling. Life shines brightest in the face of adversity.

The sea of change will take some time. The big guys are heavily funded, their business plans frighteningly simple. Lose more money than those who don’t have deep investor pockets and snuff them out, one by one.

But I urge all who empathize and resonate with these words to keep your chin up. The best of the cannabis world is yet to come, and by digging deep roots and holding your ground against the winds of change, you will emerge stronger than ever ready to take part in the brighter future to come.

Edited by Lori Arden