5 Strategies Used by Winning Cultivators
/Research conducted by the National Cannabis Industry Association (NCIA) earlier this year revealed that more than one in three U.S. cannabis cultivators (37%) are not profitable. The obvious next question is what are the profitable cannabis cultivators doing differently?
While every state is unique and there are a myriad of factors that affect a business’ profitability, there are some things to be learned from today’s profitable cultivators. At a high level, the learnings can be rolled up into the 5 Rs:
Reliable
Repeatable
Reputable
Revenue-driven
Risk-mitigating
Let’s take a closer look at the five strategies that make up the five Rs:
1. Reliable
Reliability is tied directly to consistency. Specifically, it refers to consistent inputs, including your grow media, amendments, and so on. With consistent inputs and processes (see #2 below), you’ll get reliable outcomes, which are critical to generating revenue and gaining a competitive advantage.
Putting the reliability strategy into perspective as it relates to your grow media, all bio365 media is consistent from one bag and one pallet to the next. We know this is true because we test everything with a 41-step quality control process that ensures every batch is consistently the same.
2. Repeatable
To achieve reliable, predicable outcomes, your cultivation processes must be repeatable. This is where standard operating procedures (SOPs) come into the picture. Winning cannabis cultivators have refined and optimized their processes and developed detailed SOPs for every stage of cultivation that practically guarantee predictable, positive, and profitable outcomes.
At bio365, we work with our clients all the time – at no extra charge – to help them develop SOPs. Our grow media is consistent from batch to batch, so we’re happy to help our clients develop SOPs that bring consistency across all processes in a systemic, repeatable way.
3. Reputable
Cannabis cultivators who win in their markets are the ones who prioritize branding and invest in building a brand reputation that is recognizable and trustworthy. When people hear your brand name, what do they think? Have you developed a brand reputation for quality? Uniqueness? Consistency? Reliability? What does your brand promise, and do you live up to that promise in every interaction and experience?
In a competitive industry like cannabis, wholesalers and dispensaries won’t buy from cultivators that don’t produce consistent crops, and consumers won’t buy products from a brand that doesn’t consistently deliver on its promises. See how we’ve come back to #1 in this list – reliability? The 5 Rs are all interconnected, so you need to prioritize and invest in all of them to get the best results and a competitive advantage.
When it comes to your grow media, bio365 media has been proven to increase yields and plant quality, which leads to a quantifiable brand differentiator that can help you gain shelf space, increase wholesale orders, boost new and repeat customer purchases, drive positive word-of-mouth marketing, and more.
4. Revenue-Driven
To be profitable, you have to be revenue-driven, but that means more than just wanting to generate revenue. It means making the right strategic decisions (and some of those decisions can be difficult) to maximize revenue over the long-term, so your business can keep its doors open for years to come.
Matt Stockton from the Department of Agricultural Economics at the University of Nebraska-Lincoln explains that every decision made in a cultivation business has an impact on profitability through one of three fundamental paths: cost (i.e., cutting costs), revenue (i.e., increasing per unit revenue value), and the common link between cost, revenue and productivity. In other words, every decision you make must be framed with these three fundamental paths.
At bio365, we see this strategy at work all the time. When clients switch to bio365 grow media, they quickly realize five revenue-related benefits: improved plant quality, improved yield, savings on nutrients, water and amendments, reduced cycle time, and labor savings. Ultimately, costs go down, productivity goes up, and revenue increases.
5. Risk-Mitigating
No cultivator wants to do anything that puts their crops at risk, and that’s what the risk-mitigating strategy used by winning cannabis growers is all about. Is your business and grow facility set up to mitigate as many risks as possible? Are all of the inputs you use clean and consistent? Is your facility truly clean? Was the facility where your inputs were manufactured truly clean? You need to know the answers to all of these questions to ensure risk is mitigated.
At the same time, it’s important not to be so risk-averse that your business doesn’t have the chance to pursue innovation and find ways to grow, gain a competitive edge, delight customers, and increase revenue. Therefore, review all of your current processes, inputs, tools, and so on to ensure risks are mitigated, but don’t close the door on researching new opportunities.
In addition to developing detailed SOPs that help eliminate risks, many of the cultivators bio365 works with have created specific testing areas in their grow facilities to conduct controlled experiments on variables like amendments, grow media, watering, and more. We’ve learned that it doesn’t matter if you use a table or an entire room for testing. What matters is that you’re actively testing and trying to reduce costs, boost productivity, and increase revenue as well as discover innovative opportunities to gain a competitive advantage in the competitive cannabis industry.
Key Takeaways about 5 Strategies Used by Winning Cannabis Cultivators
Cannabis cultivation is competitive and will only get more competitive in the future. However, with the right strategies, you can position your business to be among the winners. In the not-so-distant future, cannabis will be legalized at the federal level, and the cultivators who prioritize the 5 Rs will lead the way. Will your business be one of them?
The bio365 team can help you bring the best growing media to your facility, develop SOPs, set up trials and tests, and more. Contact us to get started and set your business up to be one of the cannabis industry winners.