‘Baked-in Market Separation’

Special Report - 2022 Breeding & Genetics Market Report | Executive Letter

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Having come to cannabis from the world of fresh produce, I see an industry nearing a familiar crossroad. It’s the turbulent but formative young adult years: production capacity is still right-sizing and prices stabilizing, but market maturity is on the horizon. Consolidation and specialization will be real themes in the coming years. There will be room for a handful of vertically integrated players, but most will need to figure out what they do best and stick with it. Breeders will breed, nurseries will grow high-quality plants, cultivators will make great flower, and processors will create new and exciting product formats for an increasingly diverse set of consumers. Discussion will soon be centered around topics like product differentiation, commoditization (and how we avoid it), and—as new markets emerge—where we go next.

The easiest way to combat commoditization is product differentiation. And it’s during these young adult years, as industry participants find their place and market imperfections still abound, that we can gain ground most quickly in the battle. Differentiation can (and will) happen at the category level, but as the industry matures, genetics will emerge as the most important driver of expansion and diversification in our product catalogs.

We at Occo believe that genetics will dominate tomorrow’s cannabis conversations. Whether it’s because you savor the familiar aroma and feel of a legacy cultivar, or you want the latest and greatest cannabinoid and terpene profiles, you’re talking about genetics. Empowered by the scientific principles common to mature crops but revolutionary to cannabis, we can drive the evolution and variation of our cultivar mix in a way that creates baked-in market separation. And it won’t just be about higher THC; many other traits, like yield, disease resistance, and reduced photosensitivity can boost production economics for players big and small.

To this end, we are thrilled to help bring you Cannabis Business Times’ first-ever “Breeding & Genetics Market Report.” The research done here brings cultivator needs into focus and informs the targets that Occo and other breeders should incorporate. We found useful polestars to help guide our program, but the discussion is just beginning. We want to hear more from growers, nurseries and retailers about how new cultivars with enhanced traits can improve their business and create the product differentiation we need to continue the evolution of cannabis.

– Casey Whelan, Vice President, Genetics Business Development, Occo Innovation, a division of Aurora Cannabis