Cannabis extraction and manufacturing is big business in California with companies expanding brands into additional states as they grow. This is the first article in a series where we interview leaders in the California extraction and manufacturing industry from some of the biggest and most well-known brands.
In this week’s article we talk with George Sadler, President and Co-founder of House of Platinum. George and his son Cody started their cannabis journey in 2010 when they sold their dirt bikes and set up a 10×10 garage. They have since built the business into a $70 million dollar cannabis empire across California, Michigan and now Oklahoma. The interview with George was conducted on July 31, 2020.
Next week, we’ll interview Matthew Elmes, Director of Product Development at Cannacraft. Stay tuned for more!
Aaron Green: First off, George, congratulations on your recent announcement on the LOI from Red White & Bloom!
George Sadler: Thanks! The deal isn’t done yet but we’re looking at a sixty-five-million-dollar deal. Cody and I will be staying on as officers to oversee growth as we expand into new markets.
Aaron: That’s great news! I hope it all works out well for you and best of luck closing the deal. Now on to the interview questions we had planned. So first off, how did you get involved at House of Platinum?
George: My son Cody and I wanted to do extraction and have a vape company. Five or six years ago we climbed on a plane to China to speak with manufacturers. We started off with extraction equipment in a small room with a table top machine. After a time, we took year and a half off to get our licensing and do our buildout. We opened up again two years ago in June. At the time, China was the main resource for packaging, and everything really. We got hardware from another company and had our Chinese partners rework the hardware to address some of the issues we had. Cody and I spent a week in Shenzhen where we met with our Chinese partners. They first did cartridges, packaging and batteries.
Aaron: Thanks for that, George. The next questions will focus on product development and manufacturing. What is your decision process for starting a new product?
George: In the beginning, Cody and I would both be a part of new product development from beginning to end. Cody has taken lead now on the beginning phases so our new product development really starts with him. We collectively come up with the concept. Cody does the market research. The concept then goes to our design team for visuals and to do the artwork- this usually takes some time. After we are satisfied with the branding, we start the manufacturing process. We do everything start to finish and can go from design to package in less than two weeks. The only thing we still manufacture in China is hardware these days, so cartridges and batteries.
Aaron: Are you personally involved in manufacturing? Tell me about your process
George: Cody and I are both involved in manufacturing. In California, we have about a hundred employees at our facility. In Michigan we have another hundred, and Oklahoma has about thirty. In Michigan, we do carts only right now and are getting ready to launch chocolates and gummies. Oklahoma is also getting ready to do edibles and gummies.
Aaron: What is your process for developing new products? George: In manufacturing, when we start a new line of edibles, we’ll first do a full test batch of products before committing to full-scale manufacturing. We start small at first then scale into larger batches. If everything looks good, we’ll decide whether or not to invest in larger equipment.
Aaron: Are you developing new products internally?
George: Our California and Michigan production is done 100% in-house. In Oklahoma we have a licensing deal with a manufacturing partner.
Aaron: Do you ever bring in external product development consultants?
George: No. We do all of our product development internally.
Aaron: In product development or manufacturing, what does being stuck look like for you?
George: That depends on what phase of the process we’re talking about. One challenge is getting the recipe dialed and then figuring out how to move into large scale. Take chocolate for example: going from a one spout pour on chocolate to a three-spout pour. That process can take a while to figure out. Any time you are trying to move forward in your manufacturing process, if there isn’t existing equipment available you may need to purchase it. There isn’t a lot of information out there to gauge on the cannabis side what is relevant.
Aaron: How about source materials for your products?
George: We pride ourselves on doing a deep dive on all of our suppliers. That includes packaging, chocolate, sugar, and flower. The advantage of longevity in this industry, we have keen radar on those doing premium work.
Aaron: What’s the most frustrating thing you are going through with the business?
George: I think a majority of people would agree that there’s lack of understanding of what’s happening with licensing. Legacy market products and unlicensed stores are frustrating. Inconsistency on testing is also frustrating. The states aren’t really doing anything to correct inconsistent testing. But banking is the number one industry pain point. We have a handle on the rest. Banking we don’t have any help.
Aaron: Feel free to answer the next question however you like. Imagine you could have someone come in and wave a magic wand to solve your problems. What does your magic helper look like?
George: Hah! Not sure what a magic helper would look like. Distribution is our biggest headache. Distribution is a different animal that is outside cannabis product development. We do all of our distribution in-house and it can be a pain.
Aaron: Now for my final question: What are you following in the market and what do you want to learn about?
George: We’re semi-new in the CBD space. Anything up and coming is something we are looking at. We’re focused on going big and multi-state. Arizona is the next state we are looking at. Nevada is after that. The partnership with Red White and Bloom is going to grow the brand into other states with them. Growth continues in that direction. Recently we’ve been going back to cultivation and doing cultivation deals. We started as cultivators and a lot has changed in the past several years. We are trying to pick up new knowledge.
Aaron: Well, thanks for that George, this is all awesome feedback for the industry. That concludes the interview! Thanks so much for your time and congrats again on your recent announcement with Red White & Bloom.
As states grapple with flagging tax revenues and soaring unemployment as a result of the pandemic, governors and state legislators are facing a quandary. Either cut back on programs that voters like, or increase taxes to keep them funded. According to a recent assessment by iUNU, many legislatures will look to the booming business of legal cannabis as a revenue source.
“For those states that have only made incremental steps towards legalization within their jurisdiction… there’s going to be pressure to initiate, whether it’s through medical marijuana programs or the expansion into recreational,” says Martin Glass, a partner at Jenner & Block who specializes in mergers & acquisitions and securities transactions.
In recent months, the average per-store retail sale of cannabis increased in legalized states – a telling change given the current state of the economy. Other facts – a loyal consumer base, proven health benefits and strong external investment – all point to a dependable industry. Mr. Glass saw this as a sign that cannabis is more stable than most believe: “The industry has proven to be quite resilient… it has absorbed the COVID-19 shock very well.”
Not only is cannabis a dependable industry, it’s also an expanding one. In 2019, global revenue rose to $15 billion, a 48% increase from the prior year. By 2020, economists expect that number to reach $20 billion. Kristin Baldwin, executive director of the Cannabis Alliance, added some perspective: “Right now, we’re at about 240,000 people employed according to the latest numbers I have. Maybe even 250,000. In King County, which is the largest county in Washington and where Seattle is, we had a 22% increase in sales in March alone.”
In the United States, the revenue from annual sales increased by nearly 40% from 2018 to 2019, rising 3.3 billion over the course of the year. This growth is expected to continue at a similar rate in the coming years, forecasted to hit $29.7 billion in revenue by 2025. These growth statistics are impressive and especially attractive as state legislatures and governors search for options to balance their budgets.
The industry also is logging similarly impressive growth on the employment side. The cannabis industry was recently dubbed “the fastest growing job market in the country” by CNBC, leaping an estimated 110% from 2017 to 2019 and hitting six figures in real numbers during that three-year period. The industry turned in those impressive numbers while constrained to 33 states (11, if evaluated from a recreational standpoint), leaving plenty of room for growth.
Baldwin agreed. “I think employment will grow along with the sales just because you are going to need budtenders, delivery drivers, and farmers,” says Baldwin. “For example, in California, Oregon, and Washington – highly regulated systems – there’s still going to be a significant amount of growth because there’s a significant amount of demand.”
Heading into budget negotiations in 2021, states are facing huge revenue gaps. Right now, those dismissing cannabis are, as Glass says, “leaving a lot of money on the table” by failing to take advantage of a major economic resource. Not only does the industry produce tax revenue to expedite states’ recoveries, as legalization expands, the cannabis industry has the ability to provide thousands of jobs.
Still dubious? Baldwin shared this fascinating piece of information: “It’s a generational shift that’s occurring as we speak. The fastest growing consumer group in cannabis right now is women over the age of 40.”
The Brand Marketing Byte showcases highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies.
Here is a data-led, shallow dive on GrowHealthy:
GrowHealthy – Basking in Sunshine
Although Florida may only have a medical market and a relatively restrictive regulatory framework, a handful of companies are leading the pack in dominating the new market. Even though the medical cannabis market is fairly young and the state has not adopted adult use yet, the market’s growth trajectory is very encouraging.
GrowHealthy (GH) is one of those companies capitalizing on market growth with a number of expansion plans. They already have 16 dispensaries open for business throughout Florida and have plans to add to that considerably.
In the past few months, GH has taken a number of steps to enhance their web presence. Perhaps as a reaction to the COVID-19 crisis, GH, along with many other companies in the cannabis space, have started aggressively improving their websites.
With the pandemic wreaking havoc on the national economy, cannabis companies are not immune. However, in the early days of the health crisis, Florida deemed the medical cannabis market ‘essential.’ That proved to be a boon for cannabis companies in the state like GH, who pivoted to curbside pickup and delivery quickly.
In order to capitalize on curbside pickup and delivery, a strong web presence is very important. GH saw a solid rise in web traffic in the past few months, thanks in part to their continuing expansion of brick-and-mortar dispensaries. Adding to their boost in web traffic, GH saw increased strength in their backlinks profile, indicating further increases in future web traffic.
In May, GH shot up to the 20th hottest brand in the United States, up from the 38th slot in April, according to the Pioneer Index. We can attribute this jump to the brand’s performance in web-related activities. The trend continued into the first week of June, as GH’s web activities were the 2nd best nationwide, with the company becoming the 4th hottest brand in the Pioneer Index.
The COVID-19 crisis is plunging the global economy into recession, changing consumer behavior and the world of business. Cannabis businesses are no stranger to operating in a challenging landscape. The constantly evolving legal status, regulatory hurdles and social stigma has forced founders in this space to be nimble and more financially wise with their capital.
While the market has experienced a seismic shift that has already attracted investors to inject capital into the cannabis industry and seen neighboring industries, including tobacco, alcohol and pharma, come into the fray, COVID-19 will change key industry structures and operations. To succeed and cultivate value, cannabis companies must adapt to the new realities of the marketplace to be well positioned for continued growth after the pandemic subsides.
With social distancing guidelines suddenly forcing brick-and-mortar retailers to move their businesses and customer experiences online and disruptions to the supply chain due to international travel and business directions, some businesses will struggle to stay afloat.
As consumer behaviour and online shopping patterns adjust to a new way of living (affecting B2B sales, online ordering, deliveries and manufacturing), leadership and strategic thinking will be paramount.
By understanding where the challenges and opportunities lie, cannabis businesses can thrive. Here are some focus areas and tactics to consider:
Targeted consumer segmentation through social media
When starting a cannabis business, it is key to understand who your core consumers are and what they want from their products. This has become even more acute because of the pandemic with consumers flocking to all sorts of health-focused products including CBD.
With everybody spending more time online, social media use is on the rise. Executing a social media plan to include influencer outreach can increase brand visibility, build a solid consumer base and create brand advocates.
Instagram is essential to a cannabis business building an online presence but it’s important that it doesn’t become a “hard sell, please buy me” channel. Plan and make Insta-worthy content that educates and entertains followers to increase engagement, click-through rates and leads. Brands may want to pair with an influencer on either a gifting or paid-for basis which will mean the brand appears in a potential customer’s feed as they interact with their favourite accounts.
The art is finding key influencers whose audience is one that you would like to interact with. This type of positioning will allow cannabis businesses to reach a new audience or group of people.
Marketing and PR
In times like these, many companies choose to pull back on communication activities and expenditures for fear of spending too much for what they perceive as little return, however, marketing and PR, when executed well, can be the lifeline of any business.
With so much noise in the market about the “next best thing in cannabis”, effective marketing and PR can distinguish brands that are credible and offer a strong value proposition to those that are all smoke and mirrors.
The current needs of businesses and consumers are much different than they were just a few short months ago, so it’s important to understand these needs and spending habits while combatting negative perceptions of cannabis.
As cannabis companies are not able to advertise like mainstream companies, a strong public relations and marketing strategy will enable firms to communicate their identity, build trust, shift perceptions through media coverage, enhance reputations and reach customers, partners and investors.
Businesses in every sector are cutting costs to keep their businesses afloat. This needs to be done strategically and requires senior leadership teams to explore cost reduction strategies and streamline non-essential costs.
This may mean further consolidation of cannabis companies and supply chains to manage cash flow and maximise resources. Companies may even look to create strategic partnerships with complementary businesses in the industry or push some firms towards mergers and acquisitions.
Business models will evolve as cannabis companies identify inefficiencies and reconfigure their operations and messaging. This could range from assessing their R&D capabilities, agricultural assets, manufacturing chains or route to market.
The postponement of countless CBD Expos, trade shows and cannabis conferences are creating new demand and opportunities for businesses. To reach prospective wholesale clients, investors and connect to their customer base, firms are entering the digital marketplace. Digital events, Zoom investor pitch panels and email marketing and sampling is on the rise and expected to grow over the coming months.
CBD brands should work in parallel with their retail partners to influence product samples in digital offers and create a touchless transaction. Buying products online is going to become a permanently entrenched habit, even when restrictions are fully lifted so it’s worth looking at how technology can support and enhance sales while offering a smooth customer experience.
Everyone in the cannabis industry will be affected by COVID-19 so maintaining positive relationships is vital in these tough times. Calling investors or partners to tell them what is going on with your business or checking in on others in your ecosystem means information can be shared to iron out any issues and help generate ideas to future proof the business. “A problem shared is a problem halved!”
COVID-19 is creating incredible business challenges. As we navigate the new normal, it’s important to adapt and grow. As more products come to market and brands/services develop distinguished offerings, expectations will change so cannabis businesses need to be ready for greener pastures.
The Brand Marketing Byte showcases highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies.
In this week’s Byte, we’re taking a look at the top edibles companies in the country. Using a scoring methodology that factors in a wide variety of data sets, Pioneer’s algorithm tracks brand awareness, audience growth and engagement. Using more than 80,000 relevant data points per week, they analyze business activity across social media, earned media and web-related activities.
For April 2020, here are the top 25 hottest U.S. edibles brands:
In this article you will learn how to control pests and improve the health of your cannabis plants using integrated pest management, commonly referred to as IPM. This involves a multi-point strategy – there is no quick fix, nor is there one solution that will wipe out all your pest problems. Proper pest management requires patience, consistency and determination.
It is important to understand that not all pesticides are bad. While many are incredibly harmful not only to pests, but also humans, in this article I will educate you about some of the safer alternatives to traditional pesticides. It is possible to safely control unwanted pests in your cannabis garden without harming yourself, your employees or the natural habitat around you.
Every cultivation facility should have a well-thought-out plan for their pest management program. This program should account for the prevention, and if necessary, eradication of: spider mites, russet mites, fungus gnats, root aphids, thrips and caterpillars. These are just a few of the more common pests you’ll find in a cannabis garden. There could also be many other less commonly known bugs, so you have to be vigilant in looking closely at your plants, and the soil, at all times. Complete eradication of a targeted pest can be difficult. Once a pest has established itself, decimating or decreasing the population will require an aggressive regimen that includes spraying daily to control populations and prevent other pests from getting established.
Spraying or applying pesticides to the foliage of plants isn’t the only way to control or eradicate pest populations. There are many other ways that you can minimize the spread of pests without the use of pesticides. In greenhouse and outdoor grows, growing specific types of plants around the cultivation area will attract both beneficial and predator bugs that will naturally control pest populations. Some plants that attract these bugs are: mint, peppers, and marigold. Beneficial and predator bugs, such as ladybugs, predator wasps and predator mites, can control unwanted pest populations in the area before they even have a chance to become a problem in your garden. Plants and flowers that attract bees, birds and insects will also create helpful bio- diversity, making it more difficult for the unwanted pests to thrive.
For indoor cultivation, it is imperative that you have your cultivation facility set up for a proper workflow. If you already have pests, you need to make sure you are not contaminating the rest of your facility when going from one area to the next. Make sure that you only go to contaminated areas at the very end of your day, and when you’re done working in that area, you must immediately exit the building. Do not ever walk back through the uncontaminated parts of your facility or the pests will spread quickly.
When most people think of pests in their cannabis garden they think of the more common varieties: spider mites, russet mites, aphids and thrips. However, there are also soil-dwelling pests that can exist, without your knowledge. These will decrease the health and vigor of your plants, without you even knowing they’re there, if you’re not careful to check for them. Some of the soil dwelling pests that plague cannabis plants are: root aphids, fungus gnat larvae and grubs. It is just as important to control the pests below the soil, feeding on your roots, as it is to control the pests that feed above soil on your plants.
Maintaining healthy plants is essential to controlling pest populations, both on the foliage and below the soil. Healthy plants will have an easier time fighting off pests than unhealthy plants. Plants have immune systems just like humans, and the stronger the plant’s immune system, the more likely it will be able to ward off pests and diseases. Allowing a plant to reach its full potential, by minimizing pests, means your plants will also have a better quality, smell and flavor, not to mention a bigger yield.
Worker Safety, Regulation and REI times
The application of pesticides requires certification from the state agricultural department. In certain situations, depending on the type of pesticide and method of application, a license may even be required. The application of pesticides without proper certification is against the law. Applying pesticides in a manner that is not in accordance with the label and instructions is also a violation of law.
The proper personal protective equipment (PPE) is required for anybody handling, mixing or applying pesticides. Employees can be a liability to your company if they are applying pesticides improperly. Make sure you and your entire staff are well educated about pesticide use requirements and limitations, prior to usage, and that only a properly certified person is handling the mixing and application at your facility.
After a pesticide is applied, you must abide by the re-entry interval (REI). This is the required time period limiting all workers from re-entry into areas where pesticides have been applied. This time period will vary depending on the type of pesticide used and the method of application. In some instances, pesticides applied in the last 30 days may require employee training before work can be done in those areas.
The misuse of or improper handling of pesticides is not only unlawful and dangerous to human health, but can also cause environmental damage to waterways and wildlife. The direct effects of pesticides on wildlife include acute poisoning, immunotoxicity, endocrine disruption, reproductive failure, altered morphology and growth rates and changes in behavior. Pesticides can indirectly impact wildlife through reduction of food resources and refuses, starvation due to decreased prey availability, hypothermia and secondary poisoning. Section 1602 of the California Fish and Game Code governs requirements for permitting of any project where pesticides will be used, and strictly regulates the disposal of all waste and run-off. It is imperative to know the regulations and to abide by them, or heavy fines will ensue!
Using Pesticides in a Regulated Market
Knowing which pesticides you can’t use, to avoid failing mandatory state testing, is just as important as knowing which ones you can use safely to pass required testing. Most states with regulated markets have strict limitations on the pesticides that can be used in cannabis cultivation. Pesticide use in the cultivation of cannabis is the most strictly regulated in the agriculture industry; the pesticides allowed for use in cannabis cultivation are far more limited than any other crop.
Just because a product is certified organic does not mean that it can be used, or that it is safe to be consumed or ingested. Oftentimes when cannabis flower alone is tested it will not fail or show a detectable amount of pesticides or heavy metals. However, when that flower is turned into concentrates, banned substances are then detected in testing, leading to test failures.
Cannabis cultivation facilities that are located on land that was previously used for conventional agriculture, or located near vineyards or other agricultural crops that are heavily sprayed with harmful pesticides, run a very high-risk failing testing. This is because of either spray drift from nearby agriculture, or residual pesticides and heavy metals left in the soil from previous crops that were using pesticides banned for cannabis cultivation. Accordingly, if you’re going to be growing outdoors or in a greenhouse, it is imperative that you get a soil and water test prior to cultivation, so you can determine if there is any potential for test failures due to pesticides or heavy metals in the soil or water in that area.
Proper Application – Using the Right Tools in the Right Way at the Right Time
One of the most important factors in pest management is proper identification of pests and proper application and coverage of pesticides. It does not require an entomology degree to identify insects, these days there is a lot of information online that can help you identify cannabis pests. Proper identification of insects can make the difference between success and failure. With a good eye and a microscope, if you do your research, you can control most insects in your garden.
In order to control pests in your garden you must get proper coverage of the foliage of the plant when you are applying pesticides. There are different types of equipment that are commonly used to apply pesticides in cannabis cultivation: backpack sprayers, foggers, and airless paint sprayers are the most common. An alternative method involves using an automated dosing system such as a dosatron, which injects fertilizer or pesticides at a specific ratio into your water lines, allowing you to use only the exact amount of pesticide you need. That way you avoid wasting money on unused pesticides. It is also safer for employees because it minimizes employee exposure, since there is no mixing required, and it allows for a large volume to be sprayed, without refilling a tank or a backpack sprayer.
No matter what you are using you must ensure you get the proper coverage on your plants in order to control pests. The temperature and humidity of your cultivation area, as well as the PH and temperature of the pesticide solution, all factor into the success of your IPM. For example, PFR 97 needs to be applied at a higher humidity range, around 70% to be most effective. In some areas this is not possible so repeated applications may be required to ensure the application is effective. A high PH or alkaline PH can cause alkaline hydrolysis which will make your pesticide solution less effective and will dictate how long your pesticides remain effective after they are mixed. It is therefore important to use your pesticide solution as soon as you make it; don’t let it sit around for long periods of time before use or it will be less effective.
In cannabis cultivation there are two different primary growth cycles: vegetative and flower. These cycles require different IPM strategies. In general, during the flowering cycle, pesticides should not be applied after the second week, with some limited exceptions i.e. for outdoor cultivation there is a longer window to spray since the flower set takes longer than a plant being grown inside, or in a light deprivation greenhouse, where there is a 12/12 flowering cycle.
For the vegetative (non-flowering) cycle, a strict rotation of foliage spray applications targeting not only pests, but also molds and pathogens, will be necessary to avoid a quick onset of infestation. Starting with an immaculate vegetation room is crucial to maintaining pest and mold free plants in the flowering cycle. Preventative sprays that are safe for use include: safer soap (contact kill) for soft bodied chewing insects; Regalia (biological control) for powdery mildew; and PFR 97 (biological control) for soft bodied chewing insects. It is also helpful to spray kelp, which strengthens the cell walls of plants, making the plant healthier, and thus enabling the plant to better defend itself from pests and diseases. Also, Bacillus thuringiensis (Bt) is useful to prevent or kill caterpillars.
The best way to control a pest infestation in the flowering cycle is at the very beginning on day one. You must start aggressively, with a three-way control consisting of a contact kill and preventative during days 1-14; preventative and biological control during days 10-18; and then release predator bugs on day 25, for optimal results. Knocking back the population with an effective contact kill pesticide early on is essential to ultimately lowering populations throughout the grow cycle, so that you can spray a biological control to preclude them from returning, before you release the predatory bugs at the end of the cycle.
Biological controls can take anywhere from 3 to 10 days before they are effective. Biological pesticides are selected strains of bacteria or fungus. When the plant tissue is eaten by a targeted pest, the bacteria kills the pest from the inside providing control without having to spray pesticides repeatedly. Predator bugs are the last line of defense, used in late flowering. They can be used indoors, outdoors and in greenhouses. An example of a common predator bug is Amblyseius californicus used to control low populations of spider mites, but there are many different varieties and they are specific depending on the type of pest population you seek to control.
A common concern with the use of predatory bugs, is whether they will be present when the flowers are harvested. However, if there is no food for the bugs (i.e. pests) the predator bugs will leave in search of food elsewhere. Further, indoor predator bugs are usually very small in size and difficult to see to an untrained eye. It is very unlikely to see any signs of predator bugs near the end of the flowering cycle, or in the finished flower product. Even when using bigger predator bugs, the bugs will leave the plants when harvested and dried.
Having pests can be very stressful. It is not uncommon to have bugs, pests, rodents, animals and birds cause damage in cannabis gardens. Making an informed decision based on science and not on unproven assumptions can determine how successful you are at pest management. There are many factors that go into pest management and no one situation is the same. You must be dedicated and consistent; pest management never stops. You will always have something ready to invade your garden. Prepare, plan, prevent and repeat!
There are numerous plastic bottle and closure manufacturers in the cannabis industry today. And, there is a significant quantity of common bottle and closure styles as well. Many companies manufacture the same or similar products as their competition. But what if you’re searching for something different? Something unique that no one else has? A plastic bottle that will make your cannabis product stand out from your competition. Where can you find that package that is truly “something special?” Something that will elevate your brand?
It doesn’t matter if your cannabis business is a start-up in its infancy or a mature company with an established loyal customer following, creating attention-grabbing packaging is essential to your success. The packaging is the all-important and critical first impression. While the primary function of any packaging is to contain, protect and market your cannabis products, your packaging is a reflection of your company in the eyes of the consumer. In many ways, the package is the product. Using creative plastic packaging is a great way to differentiate your cannabis products from those of your competitors.
Finding the right manufacturing partner is the first step. Look for a company that has custom design capabilities and understands your vision for the perfect cannabis packaging.
When is Custom Bottle Design the Right Choice?
Sometimes, an off-the-shelf stock bottle and closure will work just fine. But if you are introducing a brand-new product that is unique to the industry, or if you are using a new product to introduce the fresh new look of your brand, it makes sense to develop plastic packaging that is distinct and eye-catching. You want your brand and products to look special and stand out on the shelf. There could also be filling equipment, regulatory, labelling, light sensitivity or other packaging requirements you must address as well.
Start every custom cannabis bottle project with a trusted manufacturer who thoroughly understands how you want the plastic packaging to look and the specifications it must meet. Ensuring that these qualitative and quantitative details are discussed will lead to on-time, on-budget and on-target custom cannabis packaging solution.
Achieving the Look You Want
Depending on your requirements, there could be several solutions to achieving the special look and specifications of your custom packaging. Discuss all of the design options that meet the needs of your product with your manufacturing partner; they should help you decide on the best direction for your packaging.
Selecting the right materials for your custom plastic bottle and closure is a big part of the process. Select materials that will provide the necessary aesthetics, chemical resistance, light transmission, bottle capacity and weight requirement that will protect your product.
Your manufacturer should also be able to guide you through the production process: should the bottle be blow molded or injection molded? Should it be made on IBM (Injection Blow Molding) equipment or EBM (Extruded Blow Molding) equipment? Answering these questions will ensure that the plastic bottle will be made efficiently and to the correct specifications.
Flawless Closure Integration for Your Cannabis Packaging
Designing the bottle is important, but you must also consider what type of closure will work best. Both items must be engineered to work seamlessly with each other. If the closure doesn’t work properly with the bottle, it can compromise the product it contains. Closures must always seal perfectly to ensure the integrity of the product inside. They must also be designed to function efficiently and meet the requirements of your filling operation.
A detailed CAD drawing should be provided, outlining every critical dimension of your HDPE or PET bottle and plastic closure. The CAD drawing provides the direction needed to create the manufacturing mold for your custom design. It also serves as a reference check to ensure that the product is produced according to your specs.
Ensure Quality through the Manufacturing Process
Ensure that your packaging partner has quality checks in place throughout the manufacturing process. Error detection systems, random sampling and testing will safeguard 100% conformity. It’s also important that manufacturers adhere to cGMP best practices and certifications under a globally recognized accredited program. This represents their commitment to continuously improving manufacturing processes and quality systems. It also helps minimize waste and manufacturing errors while increasing productivity. Risk of product contamination and other errors will be alleviated, and product efficacy and shelf life expectancy will be met.
Responsive Customer Service and Support
Many packaging manufacturers claim to provide exceptional customer service, but few actually rise up to that level. This is an important aspect of your project and you need to know that your questions will be answered and that your producer will keep you informed of any changes. Knowing that you can trust your supplier allows you to concentrate on other aspects of your business, like growth and profitability.
Reinforce Your Brand with Customized Packaging
In today’s competitive cannabis market, it’s more important than ever to have your product stand out from the competition. Your brand should help build awareness and develop consumer loyalty. When you deliver a consistently reinforced message, consumers will instantly recognize your brand. This consistency is a key factor in encouraging consumers to purchase your product over the competition — even when they want to try something new. Consistency makes your brand feel more dependable and people gravitate towards things they trust.
Your brand consists of more than just your logo and company name. Your brand identifies who you are, what your company stands for and the integrity of your product. Customized cannabis packaging will reinforce your brand and attract consumers to your products. Take time to find the right cannabis packaging partner who can help differentiate your brand and products from your competitors with special, eye-catching plastic packaging.
Constellation Brands, the beer brewer behind Corona and Modelo, has finally admitted the obvious. Its four-billion-dollar bet on the Canadian cannabis company Canopy Growth in 2018 was a long-term play for market share, not immediate profitability. Indeed, Canopy has yet to turn a profit and its shares are down 30% from this time last year. So far Constellation has lost $71.1 million of its investment in the cannabis industry company leader. That is 19.25% of its total investment in 18 months. In other words, hardly insignificant.
That said, Canopy is not, by any stretch of the imagination, “down for the count.” If their overexpansion plans and statements over the last three years have been, at best, optimistic, they have not done anything broadly different than any of their other major competitors (see Aurora for example). And have still emerged, financial bloodbath although it has been so far, four years after entering the European market at least, with global presence that is not going anywhere. Even if in some markets overall sales are lower than hoped or anticipated.
At least two quarters of real reorganization and reshuffling in every office on every continent the country does business in have at least resulted in a major victory in Luxembourg at least that will bear fruit for years to come. That is a strategic victory worth a few dings along the way.
Starting, almost certainly, in 2021, when changing laws in Europe will also allow the company to bring together its background and reach in the spirits industry to a world that is finally opening to the blending of the cannabis world into the same.
This year, in other words, will almost certainly see the company continue to service its existing steady business in multiple countries – however unfancy that may be. And it is decidedly not glam here. In places like Germany the company is essentially only holding onto market share in the medical market by its purchase of the largest dronabinol maker in the country.
That said, beggars cannot be choosers. Aurora in contrast, is looking at a serious review of its cultivation licenses and practices. In the meantime, Canopy snagged a lucrative contract for a strategic, central country in the European debate – Luxembourg – that no matter how small, that will create at least a trickle of medical sales until the country changes its laws.
One of the things that the Canadian cannabis industry has in spades, and this is absolutely true of Canopy, is accurate business acumen about market entry timing and overall strategy.
No matter how much cannabis industry execs, in other words, have only been positive and upbeat before, this statement by Constellation also signals a change in the way Canopy presents itself externally.
Mistakes have been made. It is time to clean house and move on.
What other new industry in the lifetimes of those alive today, continues to admit its mistakes and pivots less than a decade after its global birth in continual pivot and expansion mode? The only other one that comes close is of course the internet. And these days, more specifically, Internet 2.0.
So, as the world says hello to 2020, Canopy seems to be sending its new year message. Trimming the sails after a wild, wild year, and setting course again, for a greener horizon.
Success in the cannabis industry is driven by a company’s ability to adapt to an ever-changing market and meet the demands of the evolving consumer. Selecting the right business management solution to handle the complexities of the growing cycle as well as daily operations and compliance requirements necessitates diligent research. Ensuring that the selected technology solution has a centralized database in a secure platform designed to reinforce quality throughout company operations is essential in today’s competitive industry. An ERP solution with integrated CMS capabilities helps businesses strengthen supply chain management by seamlessly incorporating cannabis cultivation with day-to-day company operations to efficiently deliver seed to sale capabilities and meet marketplace demands.
What are ERP & CMS?
Enterprise resource planning (ERP) is a business system in which all data is centralized – including finances, human resources, quality, manufacturing, inventory, sales and reporting. A cultivation management system (CMS) is an extension of an ERP solution to manage cannabis greenhouse operations, including growing, inventory and labor needs. A CMS maintains a detailed level of tracking to account for continuous cannabis growth periods that require extensive monitoring and incur a multitude of expenses. In an integrated solution, both the ERP and CMS data are managed under the same secure database to provide a forward and backward audit trail of all business processes. This visibility encompasses the entire supply chain from the management of supplier relationships to distribution – including growing, cultivating, extracting, manufacturing and shipping.
How do ERP & CMS strengthen supply chain processes?
Tracks individual plants and growth stages – By tracking plant inventories at the individual plant level in real-time with a unique plant identifier, greenhouse operations are optimized – monitoring the entire lifecycle of the plant throughout the germination, seedling, vegetative and flowering stages. Audit trails maintain regulatory compliance, including information such as terpene profiles and THC and CBD potency. Monitoring genealogy, mother and cloning, crossbreeding, plant genetics and clone propagation are key to success in this industry. Strain tracking is equally important, including identifying which strains are performing best, producing the most yield and how they are received by the marketplace. Tracking of the entire supply chain includes the recording of plant health, harvesting techniques, production, growth, costs, lab testing and batch yields – without any gaps in information.
Optimizes growing conditions to increase yields – By automatically documenting and analyzing data, insights into plant and greenhouse activities create streamlined processes for an optimal cannabis cultivation environment. This includes the monitoring of all growing activities such as space, climate, light cycles, moisture content, nutrient applications, fertilizer and other resources, which all have an effect on plant growth and yields. Most importantly, labor costs are monitored, as it is the highest expense incurred by growers. In an industry for which many companies have limited budgets, enabling efficient greenhouse planning, automation and workflows reduces overhead costs.
Integrates with regulatory compliance systems – Compliance is a mandatory part of the cannabis business, and many companies haven’t expended the effort to ensure their processes are meeting regulations. This has placed their licensing and business at risk. An integration that automates the transfer of required reporting information from the ERP to state government approved software such as METRC, Biotrack THC and Leaf Data Systems to ensure regulatory compliance is imperative. This streamlined process assures that reporting is accurate, timely and meets changing requirements in this complex industry.
Facilitates safety and quality control – With an ERP solution tracking all aspects of growing, manufacturing, packaging, distribution and sales, safety and quality are effectively secured throughout the supply chain. Despite the lack of federal legality and regulatory guidelines, proactive cannabis producers can utilize an ERP’s automated processes and best practices to ensure safe and consistent products. By standardizing and documenting food safety procedures, manufacturers mitigate the risk of cannabis-specific concerns (such as aflatoxins, plant pesticide residue, pest contamination and inconsistent levels of THC/CBD potency) as well as dangers common to traditional food manufacturers (such as improper employee procedures and training) for those in the edibles marketplace. Food safety initiatives and quality control measures documented within the ERP strengthen the entire supply chain.
Maintains recipes and formulations – In manufacturing, to achieve product consistency in regards to taste, texture, appearance, potency and expected results, complex recipe and formula management is a necessity – including monitoring of THC and CBD percentages. The calculation of specific nutritional values to provide accurate labeling and product packaging provides necessary information for consumers. Cannabis businesses have to evolve with the consumer buying habits and marketplace saturation by getting creative with their product offerings. With integrated R&D functionality, the expansion of new and innovative edibles, beverages and forms of delivery, as well as new extractions, tinctures, concentrates and other derivatives, helps to meet consumer demands.
Handles inventory efficiently – Established inventory control measures such as tracking stock levels, expiration dates and product loss are effectively managed in an ERP solution across multiple warehouses and locations. Cannabis manufacturers are able to maintain raw material and product levels, reduce waste, facilitate rotation methods and avoid overproduction to control costs. With the use of plant tag IDs and serial and lot numbers with forward and backward traceability, barcode scanning automatically links product information to batch tickets, shipping documents and labels – providing the ability to locate goods quickly in the supply chain if necessary in the event of contamination or recall. The real-time and integrated information available helps mitigate the risk of unsafe products entering the marketplace.
Utilizes user-based software permissions – Access to data and ability to execute transactions throughout the growing stages, production and distribution are restricted to designated employees with proper authorization – ensuring security and accountability throughout the inventory chain.
Manages supplier approvals – Assurance of safety is enhanced with the maintenance of detailed supplier information lists with test results to meet in-house quality and product standards. Quality control testing ensures that critical control points are monitored and only approved materials and finished products are released – keeping undeclared substances, harmful chemicals and impure ingredients from infiltrating the supply chain. When standards are not met, the system alerts stakeholders and alternate vendors can be sought.
Delivers recall preparedness – As part of an edible company’s food safety plan, recall plans that include the practice of performing mock recalls ensures that cannabis businesses are implementing food safety procedures within their facilities. With seed to sale traceability in an ERP solution, mitigating the risk of inconsistent, unsafe or contaminated products is readily maintained. Integrated data from the CMS solution provides greater insight into contamination issues in the growth stages.
An ERP solution developed for the cannabis industry with supporting CMS functionality embodies the inventory and quality-driven system that growers, processors, manufacturers and distributors seek to strengthen supply chain management. Offering a centralized, secure database, seed to sale traceability, integration to compliance systems, in-application quality and inventory control, formula and recipe management functionality and the ability to conduct mock recalls, these robust business management solutions meet the needs of a demanding industry. With a variety of additional features designed to enhance processes in all aspects of your cannabis operation the solution provides a framework to deliver truly supportive supply chain management capabilities.
The past year has been another strong year in cannabis. Investors continued to pour money into the burgeoning industry — surpassing 2018 investment totals in just 40 weeks — and new markets opened up for recreational and medical cannabis. And following the passage of the 2018 Farm Bill, CBD has proliferated and become one of the hottest health supplements in the country.
But as the year winds down, the industry appears to be poised for a more challenging shift in the new year, as once-heady expectations for some big companies don’t pan out and some states clamp down, rather than loosen up, certain regulatory hurdles.
Here are some financial trends to keep an eye on in cannabis over the next year:
Finding New Capital Investment Will Be Tougher
After an initial investment boom in recent years, cannabis investors are realizing not everything colored green turns to gold. With public cannabis companies not performing as well as hoped and restrictive tax laws still plaguing the industry, investors are growing more cautious when it comes to cannabis. Add in other macroeconomic trends that are pointing to a global economic slowdown, and 2020 is shaping up to be a tough year to find cannabis capital.
That’s not to say funding will completely dry up, but operators and business owners must be aware that investment deals that perhaps closed in a matter of days in previous years, likely will take weeks or months while investors dig deeper into books and perform higher levels of due diligence before inking a deal. This means cannabis businesses must carefully plan and watch their cashflow and pursue fresh capital or investment earlier rather than later.
Expect More M&A and Consolidation
With the green rush reaching a crest of sorts, reality is setting in for some smaller cannabis operators. Expect to see more consolidation with smaller dispensaries and cultivators being bought up and absorbed by the big kids. More limited capital and investment options coupled with continued regulatory and legal uncertainties mean unsustainable operating costs for independent and smaller operators, which means the only way to survive may be to sell to a larger player.
New Markets & Regulations
The new year brings new states opening up to recreational or medical cannabis sales, as well as newer or altered regulations in existing markets. Cannabis firms must keep an eye on these new markets and regulations to best determine whether they plan to expand or not.
How stringent or lenient regulations are written and executed will determine the size and viability of the market. One state may severely limit the number of licenses it issues, while others may not put any limit. For example, Oklahoma issues unlimited licenses to grow hemp at $1,500 a piece. While that sounds promising for smaller hemp producers, it also could potentially lead to an oversaturation in the market. On the flip side, a more restrictive (and costly) licensure structure could lead to a far more limited market where only the industry’s largest players will be able to compete.
Cannabis businesses also should keep an eye out for new regulatory hurdles in existing cannabis markets. For instance, California is raising its excise tax on cannabis beginning Jan. 1. That will result in higher costs for both consumers and cannabis companies. High state and local taxes have been a challenge industrywide because they make legal operators less competitive with the illicit market. Also, a proposed rule in Missouri could ban medical cannabis operators from paying taxes in cash. Such a rule would prove problematic for an industry that has had to rely on cash because of federal banking regulations.
Credit Card Payments
While cannabis businesses may face several new and recurring hurdles in 2020 on the financial front, at least one looming change should make business easier: credit card payment processing. Because of cannabis’ continued banking woes, dispensaries and other plant-touching operations have not been able to accept credit cards. Though federal banking limitations remain in place, in 2020 we will see payment processors introduce new, creative and less expensive ways to navigate current banking limitations that will allow cannabis sellers to take credit cards. Opening up payments in this way will not only make transactions and record keeping easier for customers and businesses alike, it also will attract consumers who don’t use cash.
While some of these trends may prove challenging, in many ways they are signs that the cannabis industry is shifting and maturing as we enter a new decade. Many hurdles remain, but the size and momentum of the industry will only continue to grow in 2020 and beyond.
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