TOP 3 REASONS FOR FAILED CULTIVATIONS

Common Pitfalls and How to Avoid Them for Successful Harvests

There are many moving pieces to plan and control when it comes to scaling cannabis. In this article, we will discuss some of the most common reasons for failed cultivations and how to avoid potential pitfalls. Remember, every grow poses its own problems and threats. It’s important to back into any business decision with the end goal in mind and manage risk whenever possible.


Considerations:


  • Financial strategy and how to compete in your given market. 
  • Building design, floor plan and workflow efficiency.
  • Seeking advice from an experienced cultivator.
  • Understand what scale you’re growing at and how all the moving pieces and parts work in unison. 


1. Stubborn Owners – Ask for Help!

The number one reason for failed cultivations is stubbornness. If you are unsure about any component of a scaled operation, don’t be afraid to ask for help! It’s simply the cost of doing business. Investing in help from an experienced operator is an easy way to manage risk. Good decision making can save you a lot of money and time in the long run. You are buying certainty. Yes, there is a cost associated with certainty, but there is also a tremendous amount of value in this type of insurance.


First off, anyone entering this space needs to ask themselves a very important question: Can you afford to be wrong, and how long can you afford to be wrong for? Every mistake in this business is not only very expensive, but costs a lot of runway time. Avoidable, small mistakes can set you back drastically.


2. Lack of Planning

General Goals: It is important to know what you are building and why. Have your goals clearly defined! Know metrics like the target cost per pound, quality of desired product, or if the facility should be labor or asset heavy. If you know the yield you’re trying to produce, you can back into decisions that will successfully get you there. This may include considerations such as number of lights you need, room size, pull down cycle, etc.




Exit Strategy: Do you want to operate for 1, 5, or 10 years? Do you want to stay in the industry for the long run? Know your exit strategy! You must ask yourself what you envision the end to look like. It’s very common that people go into business not considering the end goal because they’re caught up in the excitement to start. Understanding this will really help you, as an operator, shape your business decisions. 


Building Design & Work Flow: Don’t be afraid to rework your floor plans and blueprints. This is the foundation of the business. The building dictates your efficiency. Your efficiency dictates input cost and potential pitfalls. Spending extra time planning can lead to major efficiency gains down the road. With that being said, only make changes if there is an economic advantage. This applies to workflow, labor and layout of equipment in the space. Environment also plays a key role in planning. For example, if you live in high humidity, you may need to account for more HVAC. 


Starting at the physical infrastructure is best. Next in priority, would be design efficiency of the team and workflow process. The ultimate goal in the layout design is to avoid potential bottlenecks. This means that each process should happen at the same exact rate as the process before it. 


Padding for Mistakes: Padding is another form of risk management. It’s highly unlikely that nothing will ever go wrong. For example, be sure to compensate with the veg room if something goes wrong in flower. The goal is to prevent shrinkage in yield. Flower is what brings in revenue, so ensure that it gets the attention it needs for when mistakes occur. 


Codes & Regulations: Know the codes and regulations for the state in which you’re operating. Once you know the codes and regulations that apply to your building and city/state, you can begin to work around any limitations. Know your local laws, zoning, land use, etc. Some other considerations would be chemical thresholds for IPM testing and OHSA laws. Ultimately, the state decides if you get to conduct business or not. As an operator, it’s advised to take these legalities seriously to avoid problems down the road.


3. Poor Financial Decisions

The most common financial problem operators face is running out of money. This could be due to unnecessary spending or not properly managing risk. Poor planning quickly leads to a drained budget. Something unique about the cannabis business is the sizable cost. The price of an average cannabis build is $200-$300 per square foot. Compare this to maybe $50 per square foot for other types of businesses, such as restaurants. 


No doubt, this space is expensive to enter. Though, the reward of a successful business has a large pay off. So, with proper planning and carefully thought out financial decisions, you can be successful too!


The Bottom Line:

The common denominator here is managing risk. Every single move in a scaled operation is a return on investment equation. If you are new to this space, or have been operating for years, there is still risk involved. Plan properly, have an end goal in mind, and don’t be afraid to ask for help!

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