I made post about how much quality over quantity matters in regard to profits in cannabis and received some push-back about the way I ran the COGS using the same cost to produce for both scenarios. Here's my explanation on why I chose to run numbers that way... If I were running COGS to see what cultivars we should keep vs cull, I would absolutely look at things on a on-by-one basis. Although, that would really be too easy to get an accurate number since we don't divide production labor out by cultivar worked; but we could still get a "close enough" figure for those types of decisions. However, this scenario was looking at overall profitability while using cultivars from two ends of the spectrum as examples. For this purpose, I prefer to use a blended margin approach by looking at full production output based on total costs to get an average cost to produce per pound. It also helps because the costs that went into producing a batch were already long spent before the revenue is realized, so we aren't really looking at a COST/SELL dynamic like we would in other production or sales scenarios that have a shorter production to sales timeline. Since there are 4-6 months of costs that go into a harvest before there is a chance to see any revenue from it, the sales from every harvest are really going into the production of future harvests - and not necessarily of that same cultivar. This is another reason why I choose to use a blended margin approach, as it ensure we are able to keep a more even and balanced cash flow and revenue stream and also reduce price elasticity of our products creating more consistency for our customers. When you know the parameters that you need to remain within (which any good business person should know for their business) then a blended margin is much simpler and gives a better overall picture. Happy Friday, y'all!
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We continue our #BrenntagPioneers series with a special spotlight on Philipp Mühsam, the founder of what is Brenntag today. You could say that he is the first Brenntag Pioneer. We couldn’t resist imagining what it would be like to chat with him about the early days, his entrepreneurial spirit and the legacy he started that continues to inspire us. In this unique edition, let’s imagine, we hopped into a time machine and had a little chat with Philipp himself. At the age of 26, in 1874, Philipp Mühsam established a wholesale business for agricultural products in Berlin, officially getting on the market on October 9. “After gaining business experience in my father’s company, I founded my own company. In the early days we focused on agricultural products and, believe it or not, eggs were a real bestseller in these days.” Philipp was open-minded and was eager about the next steps of the company and broadening the portfolio. He shares: “After some successful years in the market, I decided to enter and capitalize on the high potential and growing demand for chemicals and raw materials. We started delivering products from suppliers to medium-sized textile companies in smaller batches, like soda, hydrochloric, sulfuric and nitric acid. We also delivered pharmaceutical raw materials that we purchased from the chemical industry and sellers of herbal remedies to small entrepreneurs such as Berlin pharmacists and druggists.” Philipp was excellent in customer and supplier communication and made smart use of the telecommunication capabilities at that time: “I was enthusiastic about new technologies and keen on adapting it early on. We introduced our first telephone in 1882. This helped me to efficiently connect with our trusted business partners.” Moreover, he knew about the importance of a strong network and contributed with his time and knowledge to the industry and society: “In 1901, I was appointed honorary commercial judge at the Berlin I Regional Court. Two years later, the Chamber of Commerce elected me for the first time to the Chemicals, Drugs, Paints, and Varnishes Committee.” When asked about Brenntag's 150th anniversary, this is what he shares: “I am amazed by the development of Brenntag and the international footprint it has today. Curiosity, commitment to innovation, and the ability to adapt – that is what characterized me and my approach to business. And it is great to see that these principles live on and have helped transform Brenntag into what it is today.” Learn more about the Brenntag history here: https://spkl.io/6048fMdoe #Brenntag150 #Entrepreneur #History © Mayk Azzato. Photo of Philip Mühsam's photo taken by Mayk Azzato.
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What's the difference between a cannabis company people want to work for and one they want to leave? This question is particularly important at an operational level in any facility. The reality is, a high turnover in growers or trimmers is detrimental to any successful cultivation site. The skills carried by experienced staff are invaluable and ensuring staff have a good work environment is essential to achieving operational goals. Plants aren't grown in the boardroom, they're grown by the dedicated people who choose to spend their time focussed on what's best for the end product. At Forbidden Harvest we choose to focus on skills in the grow room over skills in the boardroom. Our grow team is dedicated to achieving the best, so we support them in getting there, and ensure only the best makes it's way to market. That's how you show the people who count, that you care. It's about what's best for the patients, the plants, and the people who cultivate them. It's about our post harvest teams and the ever important finishing touches they bring to our products. It's about this industry representing what it is capable of, and it's about the future, and all it holds. At Forbidden Harvest, we are excited for what the future holds. Better access for patients, better conditions for growers, better outcomes for all. We look forward to realising this vision ❤️
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There's a really important metric that cultivators/manufacturers should know when it comes to their business and that is cost/unit of the products you're manufacturing In cannabis especially, it was easy to overlook this before when you knew you could sell these products for more than it cost you to make them At that point being profitable was easy, but now as competition becomes fierce and high tax rates are imposed it is critical to know the true cost/unit of the products you're making or selling For cultivators this includes cost of fertilizer, water, electricity, pest management, labor, grow media, pots, seeds/clones, etc. Then determining how much of those costs contributes to producing 1 unit of flower/trim/shake (I prefer grams) For manufacturers this includes all of the cannabis ingredients, non-cannabis ingredients, packaging components, labels, labor, electricity, solvents, etc, and again you need to determine how these costs add up for each unit that you produce. This process used to be cumbersome and generally done with hand written records followed by data entry into custom spreadsheets that needed to be built as a database that was set up for analysis. Fortunately there is a better option these days, as cannabis ERP softwares such as Distru exist so that you can easily track all of your input costs and then the software uses that information to calculate the final cost/unit of the products you manufacture. You can easily pull reports to track this data, and also compare actual costs to target costs, profit margin, etc. DM me if you'd like to learn more about using software to manage your production data so that you can efficiently track your cost/unit. Share this with someone who would find this useful!
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𝗦𝗲𝗲𝗱𝘀 𝘃𝘀. 𝗖𝗹𝗼𝗻𝗲𝘀 In the world of cannabis cultivation, the debate between using seeds and clones is always going on. Here's my thoughts: 𝗦𝗲𝗲𝗱𝘀: They bring vigor, resilience to water stress, and a higher resistance to pests and diseases. Why? Because a seed plant's natural instinct is to robustly reproduce itself. 𝗖𝗹𝗼𝗻𝗲𝘀: The industry's choice for uniformity. When a cultivator finds that perfect plant, cloning ensures thousands of consistent copies. It's all about uniformity and consistency. Previously, the cannabis market valued consistency in large quantities – like bulk buys where appearance and smell were everything. Now, as consumers buy small jars or pre-rolls, the need for visually identical flowers not as important. Uniformity remains a priority for many, I think the industry is seeing a shift back to the strengths of seed-grown plants.
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Have you had a chance to check out our latest case study with Organic Growers Inc.? 💡🌱 Organic Growers is a Canadian Licensed Cannabis Producer dedicated to organic practices in every aspect of their operations, & they utilize GrowerIQ daily to optimize their production & achieve remarkable growth. Andrei C., President of Organic Growers Inc. says, “From seedling inception to final sale, this software streamlines every aspect of cannabis cultivation and distribution with unparalleled precision.” Read more below in the link in the comments. #GrowerIQ #SeedToSale #CanadianCannabis #OrganicGrowers #CdnTech
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Growing cannabis is like navigating a path in many directions. Are you cultivating for smokable flowers or extract? How do you take a skill once passed down from person to person and translate that into high-end cultivation practices that can be standardized across employees or even scaled across companies? These skills demand a unique blend of rigorous science and an intuitive "feel" that's hard to quantify. "Light, Yield, and Quality: The Science Behind Cannabis Cultivation with Travis Higginbotham" Simplecast: https://lnkd.in/gHEn4izH Spotify: https://lnkd.in/gdg8GxQ8 Apple: https://lnkd.in/gCmKxmf9 About Travis Higginbotham Travis Higginbotham is the Founder and CEO of Due Diligence Horticulture (DDH), LLC, specializing in safeguarding investor capital in cultivation-specific businesses. DDH collaborates with debt lenders, court receivers, family offices, and other capital groups to turn businesses around, prevent bankruptcy, and support new startups with a solid horticultural foundation. Travis holds a B.S. in Horticulture from Clemson University and an M.S. in Horticulture from Virginia Tech. His leadership at California's Statehouse Holdings from 2021 to 2024 resulted in a 65% increase in annual flower production YOY on average and a 33% cost reduction, earning nine awards during this time for flower quality. Guest Links https://www.ddhort.com/ https://lnkd.in/gJKS_6UR Follow us: Our Links. At Eighth Revolution (8th Rev), we provide services from capital to cannabinoid and everything in between in the cannabinoid industry. 8th Revolution Cannabinoid Playbook is an Industry-leading report covering the entire cannabis supply chain The Dime is a top 5% most shared global podcast The Dime is a top 50 Cannabis Podcast Sign up for our playbook here: https://lnkd.in/exmhhFEw 🎥 YouTube: The Dime 📸 Instagram: The Dime
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Want to learn more about DDH? Take a listen as we dive into exsactly what DDH does, our offering and our philosophy.
Growing cannabis is like navigating a path in many directions. Are you cultivating for smokable flowers or extract? How do you take a skill once passed down from person to person and translate that into high-end cultivation practices that can be standardized across employees or even scaled across companies? These skills demand a unique blend of rigorous science and an intuitive "feel" that's hard to quantify. "Light, Yield, and Quality: The Science Behind Cannabis Cultivation with Travis Higginbotham" Simplecast: https://lnkd.in/gHEn4izH Spotify: https://lnkd.in/gdg8GxQ8 Apple: https://lnkd.in/gCmKxmf9 About Travis Higginbotham Travis Higginbotham is the Founder and CEO of Due Diligence Horticulture (DDH), LLC, specializing in safeguarding investor capital in cultivation-specific businesses. DDH collaborates with debt lenders, court receivers, family offices, and other capital groups to turn businesses around, prevent bankruptcy, and support new startups with a solid horticultural foundation. Travis holds a B.S. in Horticulture from Clemson University and an M.S. in Horticulture from Virginia Tech. His leadership at California's Statehouse Holdings from 2021 to 2024 resulted in a 65% increase in annual flower production YOY on average and a 33% cost reduction, earning nine awards during this time for flower quality. Guest Links https://www.ddhort.com/ https://lnkd.in/gJKS_6UR Follow us: Our Links. At Eighth Revolution (8th Rev), we provide services from capital to cannabinoid and everything in between in the cannabinoid industry. 8th Revolution Cannabinoid Playbook is an Industry-leading report covering the entire cannabis supply chain The Dime is a top 5% most shared global podcast The Dime is a top 50 Cannabis Podcast Sign up for our playbook here: https://lnkd.in/exmhhFEw 🎥 YouTube: The Dime 📸 Instagram: The Dime
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The hemp market experienced a comeback in 2023, showing growth after a decline in 2022, according to the U.S. Department of Agriculture (USDA) report. The value of industrial hemp hit $291 million, marking an 18% increase from the previous year. This growth is seen despite mixed economic trends within the market and a slight decrease in acreage used for hemp farming. The report pointed to a lack of FDA regulation for CBD as a significant factor in past economic challenges. Recent USDA actions, like revoking licenses for farmers growing both hemp and marijuana and planning for new federal hemp regulations, signal changes on the horizon. Despite regulatory obstacles, hemp's market size was comparable to that of state marijuana markets and craft beer sales in 2022. This resurgence is seen as a positive sign for the hemp industry, suggesting resilience and potential for further growth. This rebound is significant for the hemp industry because it indicates recovery and the ability to adapt and grow despite regulatory challenges and market fluctuations. The comparison to the size of marijuana markets and craft beer sales underscores the substantial presence and economic impact of hemp, highlighting its importance and potential within the broader agricultural and commercial sectors. Read on: https://lnkd.in/ewQxFDHN
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2024 is the year of the cultivator. Let me explain I know this is going to sound radical: I know cultivators have been given the short end of the stick by the current regulatory landscape, all this talk about excuse relief for craft beer producers, but nothing for our struggling craft growers really has me thinking... brands are folding under fee and tax pressure: few brands have found a sustainable model. That being said, I've been sensing a shift towards care about where, who, when, and how the cannabis we enjoy was grown. Some brands use affordable products as an excuse to keep this information to themselves. I have personally experienced a bunch of frustration around ambiguous or rotating SKUs where strain information is absent, or hidden behind smoke and mirrors. I think every product should have a harvest date. Every product should have a label saying where the cannabis was grown, what methods were utilized and whether or not irradiation was used. The brands which are upset at the thought of this aren't putting consumers first and it shows. I'm noticing people avoiding "brokered buds of ambiguous origins" in favor of options that come from known cultivators. Look at the success of Homestead Supply Co Bandwagon SKUs, including their new 7g offering. I'm loving the quantity & quality of information shared, knowing that the cannabis was grown organically in my hometown is just an added bonus. or take a look at the back of any Book Club bag you can get your hands on (you should be trying them all, they're exceptional). That's what you're up against... Brands like Tweed are noticing and followed suit, I noticed them including *who* grew the cannabis, taking a page out of Book Club's playbook. Pay attention. Informed consumers aren't the only ones that want repeatable experiences, and some of these brokered bud brands are not keeping up with the competition: I'll take any Woody Nelson Inc. product or any Rubicon Organics™ product over a bag grown by [redacted] in [also redacted] using [who knows?], irradiation status? [take a guess]. If you're ashamed of putting a name on it, it's gonna tarnish the reputation of your brand. Trust me, people are starting to pay attention. Shoutout to the brands mentioned. Keep up the killer work. you too, Zevk Cultivation Inc.
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