Tag Archives: fat

Don’t Go Down with the Ship: How to Create a Cash Influx for Your Cannabis Business During Hard Times

By Adam Benko, Brian Mayfield
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It takes a lot to hack it in the wild world of cannabis.

To dip your toes in this game and open your own business, it could cost you between a quarter to three-quarters of a million dollars after licensure and other start-up expenses – and the battle doesn’t end there. Recent data supports that the turnover rate for the cannabis industry at large is extremely high when compared to other industries, coming in at a whopping 40-60% within the first 2 months.

Oh, and let’s not forget: we’re not living in the easiest of times in general. The Bureau of Labor Statistics now reports that inflation has hit 9.1 percent, the highest ever recorded level of inflation since records began. We know that people are struggling all over the place – and those struggles are even more amplified for cannabis operators and business owners. It’s no secret that amid these struggles, many legacy operators, MSOs and mom-and-pop brands alike are making the tough decision to take on costly loans, seek funding or even ultimately close their doors.

Every time a customer abandons their cart, your business is leaving money on the table.

But, in times like these, you have to remember what brought you to the table to begin with. The cannabis industry is still projected to hit a valuation of over $33B by the end of 2022 and despite the blood in the water that we’ve seen lately, operators of all sizes are still getting wins and making a profit. So, do you throw the towel in and give up on your dreams? Should you just accept that all hope is lost?

Absolutely not.

If you’re a cannabis operator who is struggling, you aren’t alone – and more importantly, you aren’t out of options yet. Not ready to go down with the ship just yet? We didn’t think so.

Here are five, expert-approved tips to create an influx of cash for your cannabis business without significantly increasing spending:

  1. ‘Trim the Fat’ of Your Business by Cutting Lean Costs

While it may seem obvious, many cannabis operators forget that “nice to have” is not the same thing as a “must have” when it comes to keeping your doors open and your bottom line healthy. Take an eagle-eyed second look at your budget and cut back as much as possible on areas that aren’t boosting revenue. Reconsider the “extras” – like software solutions, hiring non-essential staff and slow-moving inventory – and focus your attention on the products that contribute the most to your bottom line.

  1. Make Your Customers a Priority
Focus your attention on the products that contribute the most to your bottom line.

One of the biggest mistakes that cannabis brands make is throwing so much of their marketing budget into getting new customers through the door while neglecting to show existing customers the attention they deserve for their loyalty. In today’s market, cannabis consumers have more options than ever. Why should they keep choosing you? Happy customers are customers that will weather the storm with you. Honing in on targeted ads and marketing efforts geared toward existing customers, in combination with loyalty perks, VIP deals and more is a great way to ensure your business is truly unforgettable in the eyes of the customers that keep your doors open. Looking for an extra leg up? Here’s an insider pro tip: refer-a-friend programs are a great way to get the best of both worlds and help those marketing dollars stretch a little further.

  1. SOS: Save Our Shopping Carts

Shopping cart abandonment is a serious problem for cannabis retailers – and it happens all the time. For mobile users, it can creep as high as 85%. Shopping cart abandonment happens when a potential customer visits your site, builds an order in the cart and then either forgets to check out or chose not to execute the purchase. Every time a customer abandons their cart, your business is leaving money on the table. Fight back against shopping cart abandonment by providing clear calls to action through the shopping and checkout process and targeting customers with emails or SMS messages that include discount offers or reminders to check out.

  1. Pump Up Your Payment Solutions

It’s like Canadian rapper and singer-songwriter, Drake, said in his hit song, “Omerta”, “I don’t carry cash ‘cause the money is digital.” 

Payment providers often give back a portion of transaction fees to business owners.

Let’s be honest, it’s 2022 – not a lot of people love carrying around cash. If your cannabis business is cash-only, you could be missing out on extra revenue from card and mobile payment-loving customers. On average, mobile payment users, on average, spend approximately twice as much through all digital channels as those not using mobile payments. Cash-only retailers also miss out on upsell opportunities by limiting themselves – let’s say a customer comes in with $40 in cash, they won’t be able to pick up that extra pack of cones or the grinder they were eyeing up at the checkout if they’re limited to cash-only transactions.

In addition, retailers who patronize payment solutions via debit card providers or online ACH can benefit from payment kickbacks as an additional stream of income, as these payment providers often give back a portion of transaction fees to business owners.

  1. Don’t Forget About Employee Retention Credit (ERC)

If you haven’t heard of ERC – you could be leaving as much as $26,000 per employee on the table. Many cannabis business owners would be surprised to learn that they can still take advantage of the employee retention credit program that started during the pandemic.

The program was launched in March 2020 as a way to help offset the financial struggles of business owners during COVID-19. But, even this year, cannabis business owners can seek cash relief through ERC – employers can retroactively claim the ERC based on financial struggles they experienced during 2020 and the first three quarters of 2021.

Started your cannabis business after February 2020? You still may qualify under specific ERC provisions that can provide up to $100,000 in refundable credits.

At MJstack, we understand the trials and tribulations that cannabis professionals go through every day because we’re right here working alongside you.

Our team of professionals is familiar with cannabis and what it takes to make the cut in this world. Ready to boost your business and safeguard your investments against whatever comes next? Contact us today to learn more and book your FREE consultation.

Recent Developments in Supercritical CO₂ Winterization

By Aaron Green
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Supercritical carbon dioxide (CO2) extraction is a processing technique whereby CO2 is pressurized under carefully controlled temperatures to enable extraction of terpenes, cannabinoids and other plant molecules. Once the extract is obtained the crude is often subjected to an ethanol winterization process to remove chlorophyll, fats and waxes.

Green Mill Supercritical is a Pittsburgh-based manufacturing and engineering company focused on cannabis and hemp extraction. The company offers a range of CO2 extraction equipment where users can tune and control their extraction methods. They recently announced  a technology advance enabling winterization in-process, which has the potential to remove the need for ethanol winterization.

We spoke with Jeff Diehl, director of marketing at Green Mill Supercritical, to learn more about the new process. Jeff was working in the tech industry in San Francisco in 2017 when he was invited to join Green Mill by his cousin, Jeremy Diehl, who is the founder and CTO.

Aaron Green: Before we get to your new technology, can you explain what industry trends you are watching?

Jeff Diehl: A big thing that I watch is the premium extract space. More and more consumers are demanding higher premium extracts. They want differentiated products. They want products that are safe and that have some kind of meaningful connection to the specific plant from which they came. Right now, CO2 plays a small role in the market for those products. Most premium products are generated through hydrocarbon extraction. So, I am watching how people are using CO2 to create the next generation of safe, premium products.

Aaron: What is the normal process for a CO2 extraction today?

Jeff Diehl, director of marketing at Green Mill Supercritical

Jeff: The current CO2 extraction process generally consists of two major phases to producing your final extract. In the first phase, you have extraction where you get your crude product. The second phase is post-extraction where you do cleanup to get your refined oil. Within that post-extraction phase, most operations include an ethanol-based winterization process.

Aaron: What does the winterization step do, exactly?

Jeff: Winterization is about removing waxes. Your main extraction is considered crude because it’s got a lot of materials from the plant that you don’t want. The large majority of unwanted material is waxes. Winterization is the process of using a solvent, traditionally ethanol, to separate the waxes from the cannabinoids. There are multiple challenges inherent in ethanol-based winterization that introduce cost, time and product loss. It’s terribly inefficient. Plus, there will always be residual ethanol left in your final product, and that’s not something consumers appreciate.

Aaron: You’ve recently announced a new process at Green Mill that moves the winterization step into the supercritical CO2 equipment. Can you explain how that works?

Jeff: With our process, which we call Real-Time Winterization, there is no ethanol involved in winterization anymore. It is all done with CO₂ during the primary extraction. That’s the major advance of our process and although it has been attempted before, no one has succeeded at doing it in a viable way. You take a process which is normally four days – one day for CO2 extraction and three days for ethanol winterization – and you do it all in less than a day. We have automated software, sensors and pumps that makes this all possible.

Aaron: How does the quality of the resulting product compare with the new process?

Jeff: You can see the difference right away, if you’re at all familiar with extraction. It just looks clean and bright. Lab analysis has been very positive thus far, but we continue to run tests. Our R&D team has done multiple tests, mostly on hemp and CBD. That’s because we don’t have a license for THC. We’re currently engaging with a licensed partner so that we can collect more data on THC-containing products, so we can give exact numbers. But with CBD, we’ve done multiple tests to validate the method and the technology, and are seeing consistently excellent results in regards to both purity of the product and efficiency of the process.

Aaron: How do yields compare between the processes?

Hemp CBD extract straight out of a Green Mill SFE Pro running Real-Time Winterization.

Jeff: From the data that we’ve seen in the industry, it looks like when you winterize with ethanol, you leave anywhere from 5 to 10% of your cannabinoids behind in the waxes. That’s just lost. With Real-Time Winterization using CO2 we have seen recovery rates as high as 99%. We are continuing to investigate that result with testing to make sure it was not an outlier, but in any case, recovery rates look promising.

Aaron: One of the other issues with ethanol is taxes and the ability to find food grade supply. Do you have any perspective you can share on that?

Jeff: There are a number of advantages to moving away from ethanol. The sheer quantity of ethanol is a factor. There are a lot of regulations and fire requirements around managing large quantities of ethanol. The ethanol winterization process itself is not just one process. There are multiple stages, from mixing, to freezing, to filtering, to removing the solvent. These are all opportunities for things to go wrong, so you’re always managing those risks. Multiple large pieces of equipment, including fume hoods, filter skids, cryo freezers and rotary evaporators, are expensive and require heavy management.

I think Elon Musk said the best process is no process. Anytime in an industrial process when you can remove steps in the process, that’s the direction you want to go in. And, that’s what we’ve done. With this recent work, we have effectively removed post processing for certain categories of end product.

Aaron: Do you have any patents on the new process?

Jeff: We have a patent pending on both the method and the equipment, which is allowing us to talk about this as much as we are.

Aaron: So, how does this work if somebody already owns an existing piece of Green Mill equipment? Is this something that can be retrofitted? Is it a software upgrade?

Jeff: There are two components. One is an equipment upgrade, which can be done retroactively for existing customers, and one is a methodology upgrade, which we assist our customers with. The automation software inherently can handle the settings that you need to run the methodology. In fact, it’s that software and the rest of our existing tech stack, the proprietary pump, the triple inline fractionation, the precision and stability of the overall system, that is what made this winterization advance possible.

Aaron: Where are you rolling this out first? And do you plan to go international?

Jeff: International is definitely in the plan, since we’ve already sold systems abroad. We are currently getting ready to announce the opening of our beta program with the new technology. So, we’re not ready to sell this widely at this time, but we are taking submissions from companies that want to get in early and join us at the forefront of CO₂ extraction innovation.

Aaron: Okay, great. Thanks Jeff, that’s the end of the interview.