Preparing Your Cannabis Business for the Price Drop

Last Updated on Dec 12, 2017

As marijuana laws across the country continue to change, particularly for recreational use, cannabis prices will inevitably decline. Businesses in some states have already seen prices decrease by as much as 90%. It’s not a matter of if, it’s a matter of when. Smart cannabis business operators must prepare for this reality. Certainly the cannabis market has tremendous potential for growth, but you need to know how to position your business properly to take advantage of it. Here are some steps you can take to ensure your business can thrive over the long term regardless of price fluctuations:

Marketing is crucial to any business. Developing and refining an effective marketing strategy will be part of what separates your business from the competition. Though a lot more people will be buying cannabis products than in years past, they are far more likely to buy from someone they have heard of and trust. Effective marketing is beyond the scope of this post but it is definitely something we can help with. It’s wise to test a wide variety of marketing strategies to see what works best in your market.

The cannabis industry is filled with complex regulations that vary from state to state and even from county to county and city to city within states. The incongruencies between state and federal laws leave cannabis businesses vulnerable to potential enforcement. The legal landscape is regularly changing, and the last thing you need on top of falling prices is legal trouble. Make sure you have a solid legal team in place to help you stay on top of this critical aspect of running a successful cannabis business.

New and more advanced delivery methods for cannabis are on the rise in markets where cannabis is legal. In addition to a variety of flowers, you can also sell extracts, vape cartridges, edibles, beverages, and more.

Alternatively, developing a niche cannabis product in your marketplace may help you to stay ahead of your competition. Focusing your time, attention and resources on developing the very best product you can is a great way to ensure that your business is successful, regardless of the industry you are in.

By collecting data on all aspects of your operation you can make informed cultivation decisions. An experienced cannabis consultant can help you to refine your processes and increase your cannabis yield for all of your future harvests.

Properly designed large-scale cannabis growing facilities utilizing natural lighting, environmental control systems and mechanised technologies decrease the cost of cannabis production. Indoor cannabis operations require tremendous amounts of electricity to operate increasing the cost of production. The average indoor operation spends $983 to produce a pound of flowers, while outdoor and greenhouse crops average between $100 and $400 per pound.

As more states adopt legal marijuana laws the market will open up to the broader public. Develop cannabis products that mainstream consumers entering the marketplace might be interested in trying. Micro-dosed standardized delivery methods have a lot of potential in the new legal marijuana landscape. Also, women have been the fastest growing demographic among cannabis consumers over the past year. This trend will likely continue so it’s important to consider what women want when deciding upon products you will produce or sell. Branding (as mentioned above) is something you will want to pay close attention to. Women like particular colors, styles and textures. Is your packaging attractive enough to influence buying behavior?

Your monthly revenue may be somewhat volatile at first. To ensure that you have the best chance of success, stack the deck in your favor by adding a special touch to delight your customers.

Cannabis flower prices will fall as markets reach maturity but you can be prepared for this inevitability by adopting and practicing any of the strategies above. Just as sound cultivation practices are essential to create quality products in order to thrive in the cannabis industry, sound business practices are vital to the success of your business.

Are you prepared for cannabis prices to drop in the future?