03 April 2022 |
The Five Most Important Changes Needed In Cannabis
What are the five most important changes needed in cannabis?
Depending on who you ask, you will receive a host of different responses to this question, however, having given careful consideration to this subject — here’s the top five changes I think are needed in cannabis in 2022.
1) The Criminalization Of Cannabis
Let’s start with the elephant in the room.
First and foremost, we need to stop arresting people for consuming cannabis, being in possession of cannabis, or selling cannabis.
Not only is enforcing the criminalization of cannabis a waste of resources that would be much better off spent elsewhere, this is also a HUGE loss of human life.
Are there situations whereby it’s warranted to arrest someone — sure there are, however, should cannabis be on this list? Absolutely not.
Whereas once we could attribute such arrests to protecting public health as cannabis was perceived to be dangerous, or rather it was made out to be dangerous — today, in 2022 we all know cannabis is safe to consume.
As such, it’s time we confront this new consensus such that the 40,000 people currently in prison for cannabis in the U.S alone, can return home to their families.
Documentary To Watch:
The abolishment of slavery in the United States is by no means my area of expertise, however, I highly recommend watching the documentary called 13th which outlines the clear link between the mass inscription of people of color in the U.S and the exploitation of these people as a means to access cheap labor.
2) The Cost Of Capital
If you can build a successful cannabis company, I would be willing to wager that you are more capable of building a successful company in any other industry.
Of course every industry has its own nuances, however, the point stands that succeeding in cannabis in 2022 is extremely difficult, and the cost of capital is one of the primary problems plaguing the industry today.
Why is the cost of capital such a big issue?
For starters, the cannabis industry is growing like a weed, such that the industry is comprised of companies that are growing very fast, however, such startups require access to growth capital to support this growth.
Unfortunately for cannabis companies, banks are either unwilling to work with them, or in the limited cases whereby they are willing to bank the companies building this budding industry – the interest rates on borrowed capital is extremely high.
This has a very negative impact on large cannabis companies’ ability to grow at the rate which they would like to, however, this problem is by no means limited to large cannabis companies — in fact it likely has a greater impact on smaller companies.
If you’re a billion dollar cannabis company you have the luxury of being able to afford the best lawyers in town to present your case, however, for smaller cannabis companies you simply have to accept this bureaucracy.
How does this impact founders from minority communities?
It’s my perspective that this issue has the greatest impact on people from disadvantaged backgrounds who need access to capital such that they can cover the startup costs required to establish a legal cannabis company.
Providing people from disadvantaged backgrounds with easier access to licenses is great, however, the harsh reality is that without the means to access the capital needed to get started — these licenses aren’t worth the paper they are written on.
If we as an industry are serious about social equity programs, then lowering the cost of capital is an essential step to ensure that cannabis is an industry open to all.
3) Producing Cannabinoids
I have endless respect for the talented growers who produce the cannabis consumers love to consume in North America today.
Nonetheless, the cannabis industry is extremely constrained when it comes to the number of cannabinoids we have access to.
Currently, the cannabis industry has access to less than 10 cannabinoids, despite the fact that we know of 100+ cannabinoids.
Change is coming:
Whereas once the only way to produce cannabinoids was to cultivate cannabis plants and to extract cannabinoids from the flower cannabis plants produce — in the coming years we will witness the commercialization of an alternative approach.
This approach involves producing cannabinoids in fermentation tanks, and the good news is that this approach will significantly lower the cost of producing cannabinoids while simultaneously providing consumers with access to 100+ cannabinoids.
What are you smoking Matthew?
I am fully aware of how bizarre this may sound, however, having had many conversations with the people pioneering this technology — I am 90% convinced that this change is merely an inevitably at this point.
Not only will this new approach reduce the environmental impact of producing cannabis indoors & reduce the time it takes to produce cannabinoids — it will also significantly decrease the cost of producing cannabinoids.
As someone who wants to live in a world where everyone who wants access to cannabinoids is provided with access to these marvelous molecules — I cannot overstate how excited I am to see this change come to pass.
Nonetheless, the far majority of all cannabis products purchased today is dried flower such that there will always be a place in this industry for the talented growers who are capable of producing high quality cannabis flower.
4) Too Big To Fail
This point is much more relevant to Canadian cannabis companies, however, there’s also no shortage of U.S cannabis companies that need to confront the reality that they have simply expanded too quickly.
Focusing on Canada, the imbalance between the supply of cannabis vs the consumer demand for these products is the byproduct of a long list of companies convincing themselves, or rather convincing investors that they could capture a majority of the entire market.
The solution to this problem?
With the supply of cannabis products in Canada currently exceeding demand by over 10x, the only way we as an industry can move past this point is to allow large cannabis companies to fail which will reduce the supply of products being produced.
I have no doubt that the collapse of these companies will cause many to question the viability of cannabis companies, however, the reality is that many of these companies never stood a chance at succeeding in the first place.
As opposed to focusing on cannabis consumers’ needs, and producing the products that would solve the pain points these consumers have — many of these companies that raised hundreds of millions of dollars built these businesses for investor optics.
Building a business for investors?
The very best companies in the world provide solutions to customers, whereas in the case of the rather long list of cannabis companies — the actions they took were optimized to offset the impression that they were poised to become a market leader.
This meant aggressively expanding the quantity of cannabis they were capable of producing, creating 100+ SKU’s such that they could offset the impression that were poised to dominate every single category in cannabis.
Today, we are witnessing the unraveling of this narrative, as investors & the executives at these companies confront the reality that the expectations that were created to successfully raise such large amounts of capital can never be fulfilled.
5) Prioritizing Cannabis Education
As things stand today, the cannabis industry has seemingly come to accept certain industry standards on how we should educate new consumers, however, the reality is that these current industry standards are baked in lies.
In order for the cannabis industry to fulfill all of its potential — it’s abundantly clear to me that we as an industry have to change how we currently educate consumers.
For this change to come into fruition, it’s imperative that we as an industry prioritize investing in educating cannabis industry employees, and in particular budtenders who we ask so much of, and commonly offer not nearly enough support in return.
That said, we are in the infancy of building this industry such that it’s never too late to change course, by providing these extremely influential people with all of the support they need to accurately educate the next billion cannabis consumers.
Designated training hours?
A simple, yet extremely effective means to ensure budtenders are set up for success is to provide these industry influences with scheduled times specifically to learn all of the complexity associated with cannabis.
Despite the importance of budtenders being able to accurately educate consumers, all too often they don’t receive the opportunity to learn while they earn, rather they are asked to come to work equipped with an existing understanding of cannabis.
As a former budtender, and then store manager — such a simple initiative can have an extremely positive impact on the level of understanding your staff possess.
In the next 10 years, I am confident we will see all of the above changes come into fruition, with certain changes such as the way we produce cannabinoids & allowing large cannabis companies to fail, happening much sooner.
Understandably, such large changes can create a great deal of uncertainty.
That said, as a reader of The Green Paper rest assured we will do our level best to ensure that you have all the information you need to understand & to navigate the implications of these changes.