Challenges: One Constant in a Dynamic Industry

Not much in the cannabis industry is consistent, with changing regulations and more states coming online with medical or adult-use programs. However, the primary cultivation- and business-related challenges for cannabis operations, according to participants, have remained unchanged for the past three years Cannabis Business Times has conducted the “State of the Cannabis Cultivation Industry Report.”

The top three cultivation-related hurdles cited again this year by participants are: “insect pest/disease prevention/control” (37%), “increasing yield,” (31%) and “achieving desired terpene/cannabinoid content” (28%). Other challenges noted included “humidity control” (21%), “maintaining consistent yields” (19%), “finding suitable genetics for growth environment” (15%) and “weather” (13%).

As far as business challenges, “competition/declining prices” again ranked as the No. 1 challenge among cultivators, with “compliance with local and/or state regulations” in a close second, and “finance management” ranking third. In addition to the top three business-related challenges, other highly cited options included “securing capital/funding” (23%), “uncertainty regarding federal law” (21%), “production costs” (20%), “marketing/brand building” (19%) and “product sales” (19%).

Cultivators Diversify

More than half of all study participants (54%) are vertically integrated companies, either manufacturing retail products and/or operating dispensaries. This year’s study took a closer look at companies that process/extract cannabis (42%), examining which methods were most prevalent. Of the 42% of cultivators that operate cannabis processing/extraction facilities, the top three extraction methods used included ethanol (45%), CO2 (40%) and solventless (36%).