Talk to anyone in the cannabis industry, and most—if not all—will tell you it’s rife with challenges. With barriers ranging from financial and regulatory to operational and beyond, operators in this new and federally illegal industry have no shortage of difficulties to overcome.
Since Cannabis Business Times published its first print edition in November 2015, staff and contributors have asked cover story subjects about their biggest challenges in launching or maintaining a cultivation business. Here, we’ve compiled responses from executives across the country to help business owners predict potential hurdles and prepare for operating in this industry.
BIGGEST CHALLENGE IN LAUNCHING OR MAINTAINING A CULTIVATION OPERATION?
Starting Up
- 1. “Winning or obtaining a license in a limited-license state, and getting capital to lease, build out and maintain a facility. It’s also challenging putting together a team with a deep understanding of the business.” –Michael Mills, CEO, Body and Mind, Sept. 2022
- 2. “Capital raise, acquiring the licensing to launch, and then hiring and training a team is the biggest challenge in the beginning. After that, it’s staying relevant and evolving.” –David Holmes, founder and CEO, Clade9, March 2022
- 3. “With a facility as large as ours [licensed for 100,000 sq. ft. in November 2020], we had to figure out how to generate the required power from the grid to support our building’s output. When we realized we couldn’t access those energy assets from the grid, sourcing them became a major hurdle. Because we were facing such an uphill battle to secure power to our facility, we had to pivot. This is where we had the genesis of doing it ourselves and implementing our own energy infrastructure on-site.” –Ed Dow, CEO, Solar Therapeutics, Nov. 2020
- 4. “Raising capital and navigating legal and regulatory issues.” –Jake Van Wingerden, president, SunMed Growers, Nov. 2021
- 5. “There are so many hidden costs with construction and design when building out a cannabis operation. To date, I’ve already paid $1 million in change orders.” –Priscilla Vilchis, owner and CEO, Premium Produce, May 2018
Regulatory
- 6. “The complexity of running a start-up business in an emerging industry that is extremely regulated by many agencies and is presently illegal at a federal level.” –Alex Cooley, co-founder, Solstice, June 2021
- 7. “Regulatory issues, especially with the foreign market. We’re not just dealing with Canadian regulators. We’re also dealing with foreign regulators.” –Melinda Rombouts, founder, CEO, president and director, Eve & Co., April 2021
- 8. ”The biggest challenge we faced in launching was regulatory. Early on, the rules were not very clear both at the state and county levels. It seemed like everything was changing daily. Although there is still a lot of change happening, things have stabilized some, and the waters are now much calmer and easier to navigate.” –Tim Humiston, founder, Canna Organix, Sept. 2020
- 9. “The local taxation and the state taxation, just from a small farmer perspective, is something that is really high on our list.” –Marie Montmarquet, co-founder, MD Numbers, June 2022
Staffing
- 10. “Putting the right team in place and making sure we surround ourselves with the right team to execute.” –Sarah Strickler, co-founder and director of community relations, Grown Rogue, Sept. 2021
- 11. “When we started in 2012, finding people with knowledge and experience in commercial growing was a challenge. People didn’t want to work in the industry, and anyone with a degree thought this would ruin their career. I had to kiss a lot of frogs to find the team we have now. Even though it took a lot of years, mistakes, and money, we have the right people in the right seats now.” –Lilach Mazor Power, founder and CEO, Giving Tree Dispensary, July 2021
Cultivation
- 12. “Genetics. Genetics matter commercially. The hottest, newest strains do better than the tired, old strains that are in your building.” –Jared Maloof, CEO, Standard Wellness, July 2022
- 13. “The biggest challenge is dialing in the environment so you have optimal levels in the facility to grow the perfect plant.” –Al Harrington, co-founder and CEO, Viola Brands, Jan. 2022
- 14. “Aphids, mites, ground squirrels. I got these digger squirrels that are attacking the foundation of my house. We just built three owls’ nests.” –Jim Belushi, owner, Belushi’s Farm, March 2020
- 15. “Complexity. It is complex. What I often say is, ‘It is a weed, and a weed can grow anywhere, but it won’t grow anywhere well.’ So, growing it is not the hard part. Growing it really well is where the magic comes in.” –Angelo Tsebelis, CEO, WeedMD, Oct. 2020
