Growing cannabis is half of the process; the other half is getting your crop to the marketplace at the best price.
Growing premium cannabis is not easy, and moving it through the stream of regulations, testing, and distribution can be challenging. Just as demanding as producing your cannabis flowers is obtaining top dollar for your valuable commodity.
“Sounds basic, but it is often who you know that gets the job done in cannabis. If you sow the seeds of solid business connections now, you’ll reap the sales benefits later.”
The sooner you develop a marketing plan; the better your chances of success when it comes to getting the goods sold. Connecting with potential customers is a type of marketing, and the time to start with that piece begins when you finish this article.
The path to sales
For the commercial producer, growing cannabis is like other crops; after harvest, the farmer must find a buyer, get top price, and follow the prescribed distribution chain that probably exists in a legal marketplace. As medical marijuana markets continue to expand with legalization, economic forces create a selling environment that is like other commodities, but also one that is hugely different from any other agricultural product, and it constantly changes.
The route a medical cannabis crop takes from a grower to the consumer depends on the laws and regulations for a specific location. To navigate through the various business channels and the maze of regulations that will affect profit despite where you do business, as a cultivator of medical marijuana, you must have a plan with many options to get the crop sold for a fair price, before planting a thing.
Even if you are already in cultivation mode, it is not too late to begin now with construction of a significant selling plan. In a very competitive arena that gets stiffer continually, success will only come to farmers who produce a good crop along with a good marketing plan.
Identify Your Audience
It would be great if there were a simple formula for growing and selling medical marijuana; a standard for use across the industry. There is not, so begin by identifying your customers. As each specific location and authority has different rules for production, and sale, every grower must develop their own selling plan based on rules of distribution for their location, site, and type of operation. For example, in some markets, retailers must purchase their product from distributors who obtained it through a co-op or from individual growers with permits. In other places, retailers, or dispensaries obtain product directly from the grower, with differing types of processes and paperwork. The procedures for sale to extractors or product manufacturers also vary by locality. Finding the legal path from “seed to sale” for your location is the most practical method to find out who your direct customers will be.
A medical cannabis farmer must also wear the hat of a business man, so it is important to understand the broad market but vital to comprehend the wants and requirements of the specific entities that you sell directly to. It may not be the end user of your harvest, but it is your all-important customer and should be the chief consideration for most of your marketing efforts.
It is also important to plan with the product stream defined. Aside from the customers who purchase directly from you, consider anyone involved in moving your crop from your specific sale to the end-user as an indirect, potential customer; also worth your marketing attention. The integrity of you and your crop will become known in the marketplace and in the realm of medical cannabis. With new opportunities in the industry continually, people change positions, start companies, etc., so, you just never know who you will sell to down the road. Be attentive to these indirect customers with an excellent farming reputation and future selling efforts will begin on a stronger foundation.
Reach Your Targets
Traditional advertising techniques are challenging for a medical marijuana farmer, other than promoting your brand. Dispensaries and retailers typically assume the role to advertise flowers and specific products including edibles, oils, tinctures, and concentrate products derived from your crop. So, another key step in the selling process for a farmer, even before a seed, or clone goes into substrate is to network with your potential customers before you begin trying to sell to them.
Since regulatory procedures for getting medical cannabis to market that is very different at one location to the next often determine the path of your crop to final use, identification of your actual customer can be an unclear process. For example, a dispensary in one county or parish may want your crop, but the product must first go through a processor or distributor who obtains it from the grower. In another county only miles away, the process may be different. Testing laboratories and transporters are usually other categories for licensing or regulation and additional hands involved as flowers move from you to processing or consumption, so, the complexity of finding your direct customer for marketing purposes becomes even more challenging.
The best solution is to identify who will consume your product and in what form, then work backwards. Determine what the end-use consumer wants first, then figure out what every entity between you and that consumer requires or expects and work to meet all those needs; the result is a valuable understanding of the market and fine-tuned preparation to make the sale.
It is unlikely that a wholesale cannabis buyer, processor, distributor, or delivery company will commit to taking your harvest before production and analysis like a commodity broker might do for other herb types or food products, but making connections is a very valuable practice in this industry and no one needs more networking than the grower. When your occupation is cultivating medical cannabis, good old-fashioned word of mouth and personal interaction works wonders. The contacts you make are central to a marketing plan and the information you gain in any exchange useful.
“When it comes time to present your harvest for sale, the doors are easier to open if you have been through them before.”
A good place to begin your network is with your local grower’s organizations. Supporting them with membership or sponsorship is extremely beneficial to you and the industry, but for most, it is unnecessary to join to gain access; you can usually visit a meeting for a nominal fee just to check things out. There, you will meet not only other farmers in your area, but also industry regulators, representatives, and professionals. Cannabis trade shows, seminars and classes are also great places to meet insiders that may be interested in what you offer. Lastly, make solid connections with your vendors and suppliers like your local hydroponic supply store; along with the merchandise you need to farm are people with a wealth of wisdom and contact information.
Outside an organized group or structured event, look for authorized cannabis retailers, dispensaries, distributors, product manufacturers, and extraction companies to gain further insight into market trends and demand. When possible, make appointments or call ahead of time with businesses you want to approach and consider it like a job interview if you get a meeting. Dress appropriately (flips are great to garden in, but bad for selling to a new customer) and show up on time. In the inquiry process, find out what buyers require, not only about strain, but volume as well. Ask about any packaging requirements and preferred transportation methods or procedures related to regulations.
Bar code systems for inventory management may be a regulation requirement for permitted growing, providing tracking, and pricing data. Even if not a requirement yet, bar code labels can offer the grower a valuable tool for internal use and prospective customers like distributors or retailers often prefer products that are bar-coded. With affordable systems available for even small growers, it is something to consider for efficiency, inventory control, analytics, and getting your product in the door. Make certain that your labels contain the proper coding language and the pertinent information required or desired; check with cannabis processors and vendors for their suggestions before choosing a system.
When meeting prospects, it will be challenging to talk too much about specific price expectations for a future crop, but discussing current values will help in the planning process and determining profit goals for your farm in consideration of what the customer expects moving forward. Often, the conversations will center on your cultivation method and location, the top-selling strains, price per pound, required amounts and when you can come to market with the harvest or a prepared crop. Keep in mind that you are looking for guidance, not a commitment, and your interviews will go well.
While top growers know the value of their crop, the marketplace can be harsh and ever-changing. Relying on forces of supply and demand mixed with expenses of processing, testing, distribution and regulations, cannabis buyers will work within a budget of “open to buy” dollars; they have limited funds to purchase products that they can turn for a profit according to their own sales plan. Along with taxes, each time your crop changes hands on the way to the consumer, there must be a margin of profit for each entity in the distribution chain; the result is you will receive what the market says it is worth as those costs are factored in. With this simple understanding, planning to grow profitably is attainable with realistic pricing in any good selling plan that you develop.
Regular examination of prices in your market, before you plant and when you have product to sell, is a very reliable practice for both planning and selling. Surely, changes will occur, but medical cannabis flower/bud pricing within most areas is comparable; after it passes any necessary testing, it is based on chemical content, structural quality, strain, flavor, nose, etc., so when looking at your regional market, be sure to compare apples to apples when you consider your own crop pricing.
If you are an awesome producer of medical cannabis, it is possible to establish relationships with customers that will purchase from you, grow after grow. It is also possible that you will receive requests to sell only to one customer. Exclusivity is a business consideration best served with a contractual agreement and careful thought. Generally, farmers have multiple accounts that they sell to primarily because demand for any single thing in the marketplace can change like the weather. For most growers, adapting to the changes, and serving multiple buyers in a competitive environment is the prudent common practice.
Plan to Grow an Artisan Crop
After evaluating the market forces that will determine your potential profitability, the next step is to plan your grow with method, strain selection, and the total number of plants you will have in production. After securing a source for your stock and purchasing horticultural supplies for the entire project, grab a calendar, and start firming up planting dates, estimate vegetation, and bloom cycles, along with determining the required labor required at each stage, from start to harvest. Seasoned growers use many tools in their arsenal, but few can compare to a charted course in writing or on a calendar that provides an estimate of start and finish of a cultivation cycle. With an idea of when you can go to market with your crop, you can reach out to the customers you want with useful information; a professional follow-up to any previous meetings or discussions. Conveying an estimated date for crop availability to your prospects is an excellent communication tool for any selling effort because it gives a benefit to the customer so they can plan profitably as well. This type of focus on the customer must permeate throughout your marketing plan.
"Next, grow the best crop possible; free from contaminants and superior in all aspects. This is the single most important part of the farming and selling equation."
The task of flower harvest and preparation fall on the farmer, so using any protocol that best protects the bud integrity until sale is worthy of consideration, despite the final use of your crop. The greatest marketing plan in the world will not take care of poorly stored or transferred product, where damage from pests, mold, or degradation from poor conditions is irreversible. Accommodating samples that you may require later for potential evaluation by customers is practical in the storage process and convenient when the time comes to show your goods.
Build Your Brand
It is fair to say that many cannabis growers would rather tend to their plants instead of become a marketing guru with slick presentations. The good news is that there is much professional help available to the emerging cannabis industry, so producing a top-shelf crop should be the priority for any grower. That said, your reputation and harvests deserve a quality brand and moving forward, your company name and mark or logo will be foremost for a successful operation; in time, they will become essential.
If you have a brand and you like it great, promote it. If you do not have a brand or your current identifier needs refinement, begin the task now to develop this integral component of your selling plan. A great branding effort will become synonymous with your good name and reputation for the top-quality harvests that you bring to market. If naming, graphics, and all the associated tasks are not your forte, this is a time to find skilled professionals to help you out. You need not spend a fortune, but a good brand with graphic collateral is a sound investment for your successful operation and farming future.
Once you have an awesome name, logo, or mark (your brand) attach it to everything. Sometimes, growers may sell directly to the consumer, like at trade shows, or give away samples at seminars. Your brand should accompany attractive packaging that is applicable and properly labeled according to regulations for this type of product, selling or distributing; an example of an effective marketing method that should always be part of your total strategy.
Seal the Deal
After your smart and hard work of growing a stunning crop, you have potential buyers lined up and you are ready to make the sale, your final task is to exceed expectation. That means simply that you present and deliver a product that is fantastic in every way. Groomed to perfection is necessary for best price, but since pricing is usual only after physical evaluation, even your bulk packaging for samples is a big deal.
Product testing occurs at different points in the harvest-to-sale process depending primarily on local regulations or distribution requirements set by State or local laws, or even local custom. Tests provide data for chemical content like THC and CBD with identification of any compound deemed a contaminant. It is also possible that your customer will require or perform their own lab analysis of your finished flowers. The best advice is, test it yourself before taking it to market. Often called R&D or small batch testing, even if it is not a requirement and retesting may happen later by someone else, you benefit from the credibility of keeping bad product out of the system and avoid embarrassment as a top-shelf grower for low quality or contamination. More important, it is a true analysis of the success of your work and a self-assessment of the value of your crop.
Cannabis product testing can be expensive and a cost that occurs before the sale, but it is usually a small percentage of the value of the salable product. Use the protocols for sampling required by the lab or regulation and follow the procedures required to submit your sample. Lead times for results vary by laboratory; sometimes days for busy facilities, so plan accordingly. Developing a loyal and working relationship with a testing laboratory helps tremendously for any serious grower or distributor and a good example of the importance of networking with another professional layer in the medical cannabis community.
Evaluate and Remain Flexible
A selling or marketing plan that has value should be as detailed as you want to go, but most of all it should be a subject to constant review and improvement. Business dynamics can change, laws and rules are in constant flux and market forces like supply and demand can rule the day.
Taxes are likely at each point of product transfer, so a good accounting system is a useful tool for that piece and when evaluating the hard numbers for the success of your sales effort as it is about your total operation. To remain viable, farmers must be diligent to examination of the pure economics of profit and loss and consider it in developing, maintaining, and modifying a strategic marketing plan. Simply, the ideal plan should be creative, fresh, and reach as many in your network as possible with what you bring to the table if you expect your sales efforts to work.
"Finally, maybe the biggest thing you can do in a great selling plan is to talk to your customers, honestly and openly. Did you meet their needs? Did you have a great product? How could you do better?"
At the end of the day, cultivating premium medical cannabis is only part of the job; the other part is getting the harvest to market at a profit, every time. To accomplish both aspects, a thriving farmer must stay on top of the business with a plan to not only grow the best crop of a desirable strain, but also develop and execute a clear road map to get it sold. By remaining a reputable grower and focused on the customer, the directions to success with an efficacious strategy become much easier to follow.