Special 4/20 Anniversary Edition: 20+ Tips to Help Your Cannabis Business

CBT has come a long way in this past year since its acquisition — it launched a national print magazine and is getting ready to publish its fourth issue; it launched a digital edition of its print magazine so readers could access it online anytime; and it launched free mobile apps for the iTunes App Store and Google Play.  

 

So, to celebrate CBT’s one-year anniversary under its new ownership, the editors have pulled 20+ tips — on everything from business management/strategy to cultivation to security and marketing — from CBT’s print magazine editions help you as you advance your own business, whether you’re just starting out, celebrating your own one-year anniversary or hitting a two-decade milestone. 

  

 

“And utilize resources that are there for you. Groups like Women Grow are great, bringing together people in the industry. Taking a CEO to coffee and asking if you can ask five questions. There are many people in this space who would be willing to look at your business plan or CAPEX [capital expenditure] projections,” says Meg Sanders, CEO, Mindful. 

 

Good Chemistry’s Matthew Huron recently hired a director of compliance whose job it is to make sure both dispensaries and the company’s four cultivation facilities are doing everything right when it comes to meeting the standards set by the regulatory bodies.

 

Laura Davis, the newest member of Good Chemistry’s executive team, previously served five terms on the Colorado State Board of Health from 1995 to 2015, and brokered public policy and regulatory initiatives that benefited both businesses and the regulatory bodies. “She brings over 30 years of experience in regulatory compliance, public policy development and strategic planning to our leadership team,” said Huron.

“There's new rules, there's emergency rules, ... things that pop up all the time,” he says, adding that having over 100 employees to oversee makes it “a lot to digest.”

 

Tip 3: Plan and prepare for the long-term.
“I'd say detailed planning for the things you can know about. Not going too far in debt. Given an unknown market, it's hard to make solid projections,” says Steve Walser, co-owner of Tier-3 cannabis cultivator Buddy Boy Farm.

“I visit with a lot of people, and they tended to have stars in their eyes about what this was going to be. Everybody thought it was the green rush, as they like to call it. As we've all found, it has been in some sectors. Many retailers are doing pretty well, some not so well. For producers and processors, it's a dogfight out there, so it's not a green rush by any means.

 

“You've just got to have an attention to detail, and follow up on it by watching everything you do and where you spend your money.

 

“The other thing is just to ask a lot of questions. Visit with people who are already doing it, because there's a vast difference between growing it in your closet ... and growing 30,000 square feet. The way you do it and how well you do it has a big impact on whether you're going to stay in business or not.”

 

“One of the biggest factors in accurately evaluating your business, whether for an investor or for a potential sale, is having a full financial picture of your business,” writes Morgan Paxhia, founding partner and managing director of investment advisory firm Poseidon Asset Management LLC. “Make sure you have: an accurate profit and loss (P&L) statement that outlines all of your expenses and all revenue; a balance sheet, which details your assets, liabilities (debt) and capital; and a capitalization (or cap) table, detailing the business’s owners and percentage ownership for each, and any shareholders or investor equity in the company. You should have a full financial picture available.”

 

 

“Everyone has a different way of doing things — especially growers — and often, your commitment to that decision is what makes or breaks it, not because it’s the best one. Commit to a plan and interpret data. If your grow team has never operated in a large space (say, 20 lights vs. 400 lights), there is a massive learning curve. The bottom line, this is science. Data wins,” says Sanders. 

 

“Many changes can have adverse effects if not implemented properly. For example, adding equipment without accounting for environmental parameters or power consumption can create problems. Also, a grower should never test new grow techniques on an entire crop — use a sample test crop instead. He or she should never implement new techniques without understanding any additional workflow or labor needed to make it successful,” says Brett Eaton, director of horticulture for American Cannabis Co. in Denver, Colorado.

 

“Consistently high carbon dioxide levels — about 1,500 parts per million — can boost your yield by up to 30 percent if done correctly. The plants use the carbon dioxide to photosynthesize light into plant energy and sugars, which increases bud size and density,” suggests Scott Lowry, chief operations officer for Global Organiks in Tecumseh, Ontario.

 

“Low stress training, or LST, is probably the safest, most risk-averse method to increasing top colas, the part of the plant on which buds grow together tightly. It involves bending unruly branches and using gardening wire or soft ties to hold the branches where you want them. A combination of topping, super-cropping, pruning and bending can achieve the goal of having several top colas to maximize yield. The majority of growers using LST are trying to keep their plants short and wide to take advantage of grow lights or the sun. Branches need to be bent down and secured away from other branches, creating a wider canopy with many colas from which the bud can grow,” says Lowry. 

“I would say the tendency is to maximize space and stuff as many plants as you can into the space you have. What a lot of people don’t understand is that has to be balanced with maintaining a really healthy environment for the plants, one that is less prone to pests and disease. The goal is to balance efficiency and the health and vigor of the crop overall: balancing adequate airflow, while at the same time maximizing the light you’re using as well as the space,” says Devin Liles, vice president of production for The Farm in Boulder, Colo. 

 

“One of my golden rules is that I want my growers to be able to put their eyes on every single plant on a regular basis. We have multiple operations and tens of thousands of square feet, but I want my guys to have an intimate relationship with every crop,” Liles adds.

 

“I’ve seen some grows where they just stack a room, and they can’t get to the back corner, and unbeknownst to them, back in that dank corner they’ve allowed a microclimate that’s conducive to powdery mildew, for instance. And they get an outbreak, but they don’t know it until it’s spread to the front of the room, or they don’t know it because they don’t have that expertise to know scouting is a big part of integrated pest management.”

 

“Many growers employ commercially produced fertilizer lines that come with ‘feed charts’ prescribing what to use, how much and when to feed. This is convenient, but it obscures understanding of the plants’ nutritional needs, which in commercial fertilizer lines are boiled down to products with catchy names,” say Nic Easley, CEO, and Adam Koh, chief cultivation office, of Comprehensive Cannabis Consulting (3C) in Denver, Colo. 

 

“In many cases, the amounts prescribed by feed charts are higher than what is necessary. The educated grower who understands the roles of nitrogen, phosphorus, potassium and the various micronutrients required for plant growth — in addition to applying those nutrients in the proper amounts and with the right timing — can tweak pre-made feed charts to his or her great advantage.”

 

“A few years ago, there were a few growers in Canada taking short clones and putting them into vertical aisles. I’ve also seen a grow with a setup that looked like a Ferris wheel. They had a circle that was 10 feet long [in circumference], but when you set it up in a circle, it [took up only] five feet. It rotated through irrigation and always got light from a light in the center. It was a very productive system. These may produce a good-quality product, but I don’t see them as efficient,” says Kenneth Morrow, founder of Trichome Technologies in Northern California.
 
“A vertical grow can become, at the end of the day, more of a logistical nightmare. For a hobbyist or home grower it can work fine, but for the larger scale, if you’ve got $30 million at stake in your facility and you need to have forklifts moving things around and then equipment to decontaminate, the system itself can kill you with inefficiency,” Morrow explains. 

 

“Efficiency needs to be planned for and incorporated into your facility from the beginning. Cannabis-specific, purpose-built, high-tech green houses will be the industry’s future. They afford the lowest cost of production, and cannabis does very well in greenhouses. But you must incorporate lean processes by using various mechanized technologies to create an efficient workflow,” writes Morrow. 

 

“The more energy you can save, the lower the production cost. Always look for ways to conserve energy,” advises Morrow. 

 

“While a lot of the cannabis workforce has grown the plant themselves at one time or another, they seldom have much large-scale work experience. When you need to explain the importance of hand-washing to people before you can let them into your operation, you begin to understand how much the successful operation needs an effective employee manager,” write Kurt and Kerry Badertscher, co-owners of Otoké Horticulture LLC.  

 

“Many operations we have seen have had to invest more than they imagined to get the productivity of their teams up to snuff. This is the result of not knowing where to find qualified personnel and how to educate a constantly changing stream of new employees and managers so that the operation does not skip a beat every time personnel changes. Finding people is a matter of advertising or networking, but educating your staff requires a significant effort; this directly affects your staff’s productivity and, yet, it is seldom considered. Create a ‘how to’ reference by documenting every activity in the operation. These are commonly known as Standard Operating Procedures, or SOPs.”

 

 

Tip 15: Do your due diligence on prospective contractors. 
“To make the construction process go as smoothly as possible, do your homework on contractors you hire. Ask for and contact their former clients to gauge their performance on previous jobs. A bad contractor can delay your expansion by months or longer, leading to unplanned, skyrocketing costs,” write Easely and Koh of Comprehensive Cannabis Consulting (3C). 

 

 

Tip 16: Set and stick to a timeline.
“Establish a detailed timeline for construction with specific goals and deadlines to be met, so that progress can be monitored and evaluated. (Gantt charts, which illustrate project timelines and milestones, can be very useful for this exercise.) An independent project manager is ideal, if possible, so your cultivation staff can focus on their own tasks and an experienced professional can be focused on the construction project,” advise Easely and Koh.

 

“Once construction is winding down … you had better have plants prepared to fill all your new rooms. Otherwise, your expansion could sit empty for weeks or months, delaying your return on investment. …To prevent such situations, an expanded propagation plan is necessary. If you haven’t already constructed a regular schedule of which strains are to flower in which rooms, you should do this during planning. The schedule also should include when the plants are to be cloned and from what plants the cuttings will be taken. There are a number of different ways to go about this, including cloning from mothers and cloning from your vegetative plants themselves, and the ideal approach will be contingent on a number of variables unique to your facility and the varieties of cannabis you are growing,” write Easley and Koh. 

 

“Our [location is also our] biggest challenge. We are 40 minutes from town and two hours from Denver, the biggest market for us. All of the resort towns are a minimum of three hours away. And our location has made it difficult to find reliable and consistent workers,” say Brett Sprau, head of sales, and Keith Sprau, owner and head grower, of Colorado Leaf LLC in Pueblo County, Colo. 

 

 

Security systems should focus on early detection to prevent someone from breaking in, suggests founder/CEO Noah Stokes of CannaGuard Security. Exterior cameras should send real-time notifications to multiple people, including an off-site video-monitoring company.

 

“Most criminals will scope out a building to see what kind of response they get,” Stokes says. “If someone comes out and tells them to go, they leave and don’t come back.”

 

Denver-based cultivator Colorado Harvest Company uses a spreadsheet that tracks all inventory through the growing and processing phase, with the goal of eliminating shrinkage.

 

How does it work? Only production managers are allowed to cut plants down. This person weighs the plant and enters all vital data. After the trimmer breaks the plant apart, the separated parts are weighed again and must equal what was entered originally. This level of record keeping, checking and back checking continues through the process — drying, bud trimming, curing and packaging.

 

“We never have one person who is in control of the product all the way through the process,” Tim Cullen, CEO of Colorado Harvest Company, says. 

 

 

“State regulation of cannabis production places a unique and heavy responsibility on owners and operators. To avoid the need for a defense lawyer, get good legal counsel upfront and make sure that your operation is compliant with all applicable local, state and federal laws,” write Kurt and Kerry Badertscher of Otoké Horticulture. 

 

“This is no business in which to take regulation lightly, and risk management plays a key role in protecting investments. Besides the obvious cannabis regulatory compliance issues, you are building/launching a business in an industrial setting, and worker safety and protection is going to become a part of daily life. Accidents can close an operation as surely as a pest outbreak.” 

 

 

Other cannabis companies “might have a bigger grow or more locations,” Mindful’s Meg Sanders notes, “so it’s very important to us to make sure we nail that [brand awareness] now. There’s a point in time where you have to nail it or you miss it.”

 

“To create your brand’s identity, you must first understand that a brand is much more than a logo; an effective brand evokes emotion and imagery in consumers through an integrated, calculated approach. … For your brand to be strong, all supporting aspects must consistently work together to reinforce the brand image and identity. This includes, but is not limited to, your product line, social media content, website, sales team, marketing materials and customer service. Ultimately, consumers trust brands that consistently deliver the same (positive) experience, and that is how we build brand loyalty,” write Olivia Mannix and Jennifer DeFalco, co-founders of marketing and branding company Cannabrand.