Farm Report—Cannabis Growing Pains

Cannabis farmers are in trouble this year.

Not the old kind of trouble, with anonymous tips to the authorities. No, this kind of trouble is called market saturation. Weed supply is outstripping demand. Welcome to legalized business, noobs.

Let’s be honest, a lot of people who started up cannabis businesses under the new regs got their start as black-market renegades. A whole different set of skills is needed to stay under the radar.

Now you need to conform to GAAP accounting?

Larger operations can hire their way out of this learning curve, but what about the little ops? They have got to adapt or die, just like the rest of the business world.

Luma California Farms smells rich, with a citrus bouquet from bud towers rising like skyscrapers from the no-till beds. Hanging out with my new best friend, co-owner Curtis Wall, I get a stark picture of the current state of the market for farmers.

“How are we supposed to survive? We’re always getting dicked around,” he points out.

While prices have dropped from $800–$1,000 per pound last year to $500 per pound anticipated for this year’s crop, hash makers want as much as 50% of revenue, and distribution wants 25% more. That math sucks.

“I think it’s going to be very difficult for a lot of folks,” Wall says. “If you don’t have a brand, if you’re not vertically integrated … you’re going to be screwed.”

The classic marketing answer is to differentiate your brand.

For example: The first thing he said to me on the tour of the farm was, “We care about the environment.” In California, that means water use.

Luma didn’t want to use reverse osmosis to purify the water on site like most cannabis farms. Too much water evaporates and is lost in the process. Instead, the company invested $70,000 in a water system that softens and purifies the water at a much more efficient rate.

As another differentiator, the farm is also exploring options in direct-to-consumer online sales to bypass distro.

The next part of MBA Marketing 1A is to get the message of how you are different out to the market. Here’s where Wall’s natural panache comes in—YouTube content.

Partnering with musicians and comedians, Luma’s YouTube channel(s) will treat viewers to hella-baked reaction vids, comedian-fueled policy banter and product profiles of Luma signature rosin pens and hash blends.
The YouTube shows are already being filmed in a professional live studio and—from the clips I saw—they are full of yuks. Stay tuned.

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