Is There Room for Craft Cannabis?
With mega weed corporations emerging, will there still be a place in the industry for craft cannabis producers? If the craft beer vertical is any indication, craft cannabis will have to walk a very fine line to survive. Kent Gruetzmacher explains.
Craft cannabis is carefully produced with originality, creativity, and zeal. It’s the true representation of the horticulturist turned artist. Craft growers infuse a carefully balanced mix of environmental control, irrigation procedure, and genetic manipulation into their creative processes. They produce exceptional flowers that are unique to specific locations and methods. These flowers are singular in their existence, like a rare bottle of wine. Craft cannabis products are virtually impossible to create on an industrial scale and attempting to reproduce craft methods in mass production dilutes the integrity of the process by removing the intuitive touch of the master gardener.
Looking at the increasingly industrialized cannabis industry in 2018, one must wonder how exactly craft cannabis producers will survive in increasingly competitive markets. To illustrate, massive business conglomerates, such as Canada’s Canopy Growth Corporation and America’s MedMen Enterprises, cast an ominous shadow of doubt across a cannabis industry originally founded on artisanal craft. To put this into perspective, Canopy Growth is currently valued at about $5 billion, while Medmen has been raising hundreds of millions of dollars in the private sector. While this sort of market growth is undoubtedly exciting for marijuana investors and advocates alike, it raises several questions as to viability and sustainability of craft cannabis production. Along this line of thought, many fear that small-scale growers will have to sacrifice the quality of their product—which many liken to sacrificing an artform—to stay financially competitive with corporate interests in marijuana.
States like California and Colorado are already seeing a paradigm shift in cannabis production as cultivation businesses streamline operations to compete in a legal capitalist marijuana economy. Unfortunately, as profit margins become slimmer for these businesses, craft cultivation practices are often the first to go. These practices include the use of organic soils and fertilizers, proper curing techniques, and the preservation of low-yielding, high-quality genetic lines.
There is hope, however. Look at the beer industry, where many craft breweries have been purchased by corporate giants but left alone to continue operating as they were. For craft businesses, being bought out by giants can be an advantage as mega corporations can provide resources to navigate the administration-heavy world of restricted consumables and advocate for more favorable legislation.
Wine and Cannabis
As the cannabis industry continues to evolve, marijuana entrepreneurs are looking to similar industries for guidance in navigating the marketplace. For many, the wine industry’s business model serves as an excellent example of how the marijuana market will finally settle and mature. The wine industry has both its industrial producers and its craft brands, and each of these market segments are supported by their own unique market demographics. Dedicated wine enthusiasts continue to support the efforts of artisanal viticulturalists, paying high prices for wines that are wholly unique to certain climates, regions, and cultivation practices.
As seen with wine, craft cannabis producers must depend upon a populace of connoisseur cannabis consumers to ensure the sustainability of the craft market. While credible information on cannabis buying patterns is rather difficult to locate, studies show there are a few segments of the modern cannabis consumer demographic that can theoretically sustain a craft cannabis industry.
As seen with luxury markets for food, clothing, and automobiles, there is always a segment of the consumer population that demands unique and expensive goods. Why should cannabis be any different? There are several cannabis brands, mainly in California, that have sprung up to serve the luxury marijuana market. Some variety boxes of luxury cannabis products that are delivered in a custom apothecary humidor or genuine leather scent-free purse sell for $1,000-$2,000. On a similar note, a dispensary in Seattle, WA, reportedly sells luxury cigars packed with craft cannabis and oil for a retail price of $3,600.
While California and Washington may be ahead of the rest of the US in their refined taste for cannabis products, the West Coast’s burgeoning luxury marketplace presents a viable option for the sustainability of craft cannabis production.
The concept of cannabis tourism presents another market segment that has the potential to sustain a thriving craft cannabis industry. Colorado is already enjoying the spoils of a cannabis-based tourism industry. There’s the new business model of “bud and breakfasts” springing up in response to market demands for marijuana-friendly lodging. Many vacation rentals also indicate if they are 420-friendly.
Moreover, many Colorado locals compare the cannabis business to that of the microbrewery business, where artisanal craftsman brew beers localized to specific towns scattered throughout the state. Indeed, the cannabis tourism vertical has many things in common with the beverage industry. Looking again to the wine industry, regions like Sonoma and Napa counties in Northern California bring in millions of tourist dollars each year. People don’t just want to sample the goods, they want to see where those products are grown. If the thousands of artisanal wineries in California’s wine country are any indicator of the future of craft cannabis, artisanal growers should rest assured that they will have a place in the future.
The rapid expansion of the cannabis industry, combined with its history shrouded in the dark confines of the black market, leaves the future of the business wide open for speculation. As things continue to change, the brave entrepreneurs who put their time and money on the line to develop the industry are those who seem to learn the hardest lessons. To illustrate, and in a somewhat ironic twist, craft cannabis brands in places like Oregon seem to be the only ones holding their value, as a rapid influx in industrial, outdoor grows has driven commercial prices down to as low as $50 per pound. Whether or not this trend will continue remains anyone’s guess. However, the most pressing concern relating to the preservation of craft cannabis production is safeguarding the creative processes entwined with artisanal production. Oddly enough, and in true capitalist fashion, this horticultural artform is more than likely dependent upon consumer demographics in luxury brands and tourism to survive and thrive.