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Supply Chain Pain: How Growers Can Find Relief, Part One

Commercial cannabis growers can decrease their susceptibility to supply chain disruptions by making strategic changes to how they operate their cultivation business. These modifications don’t need to be drastic, expensive, or risky. In fact, they should be the opposite.

By closely critiquing a grow facility’s procurement and production habits, entrepreneurs will likely find that the way their company operated during “good times” was rife with inefficiencies and waste.

In Part One of “Supply Chain Pain,” I’ll examine how purchasing decisions can help buffer commercial growers against future supply chain disruptions and help save them money throughout the year.

In Part Two, I’ll highlight how changes to a company’s cultivation program can help growers require fewer raw inputs and, as a result, minimize their dependency on the supply chain,

Buy now, save later

Most cultivators are so occupied managing day-to-day operations that planning ahead usually takes a back seat to growing. This can result in placing orders for materials that should have been on site months ago.

If these orders aren’t fulfilled promptly, the crop—and the company’s bottom line—can suffer.

Avoid this scenario by changing how you buy.

Take advantage of your supplier’s slow season by stocking up on most of the materials you’ll need for the coming year. I did this for over a decade as a commercial greenhouse grower, and the perfect buying season is right around the corner.

December and January are “dead months” for greenhouse supply companies.

Most greenhouse growers are holding or finishing off their holiday crops during December, but few are actively cultivating. Once the holiday crops are gone, the greenhouse gets shut down.

For most of the US, January is too early to begin planting spring crops, so greenhouses remain idle during this month as well.

As a result, greenhouse supply companies have very little business during this time of the year.

Suppliers will sometimes offer early order, bulk order, or special-order discounts to incentivize sales. I used to stack these discounts together and procure most of what I needed at very favorable pricing.

Although the initial cash outlay may be hard to swallow, you’ll rest easy knowing you’re stocked up for the remainder of the year.

To have and to hold

Of course, not everything can be purchased months ahead of time. Some things go bad.

Soilless substrates can begin developing mold or dry out to the point that re-wetting them is almost impossible. Some of these mixes carry a fertilizer “starter charge” that slowly releases over time. As a result, soil that’s held too long can have high fertilizer content, and growers that feed new transplants may unwittingly burn plant roots.

Ready-to-use liquid fertilizers containing organic amendments have a shelf life and typically must be stored under cool conditions. Stockpiling these products and holding them too long is like pouring money down the drain.

Beneficial insects are another vital input that can’t be purchased in January and dispersed to the crop over the next 12 months. Predatory insects are alive and need to be treated that way. Most growers receive weekly or bi-weekly shipments and release the insects immediately.

However, many more inputs can and should be purchased in bulk to save money and prevent the anxiety of not knowing if what you need will be available when you need it. Are you planning to re-lamp your HID lights next year? Light bulbs don’t go bad. Neither do plastic pots, rockwool cubes, or Tyvek suits. You know what you bought last year, and you’ll probably use the same products in similar quantities again in 2023.

If you have no idea what supplies your cultivation business used last year or what materials you’ll need in the New Year… supply chain issues are not your biggest problem!

It’s time to get serious about your inventory.

Mention the unmentionable

Your supply company may not offer year-end or early order discounts if they primarily service indoor growers. Cannabis plants don’t take December or January off, and industry suppliers know this.

Don’t give up hope. Supply companies have had a rough year, just like the rest of us. They need more business, too. If your favorite supplier doesn’t offer these kinds of buying incentives, ask.

A steep discount on a huge order is preferable to not doing business with you at all. There are many suppliers to choose from, and shopping around could equal huge savings for your company over the coming year.

Don’t be afraid to venture outside cannabis and establish buyer relationships with conventional horticultural suppliers. Flower and hydroponic vegetable growers use many of the same inputs as cannabis growers, and these companies are happy to take on new clients.

Cultivation entrepreneurs know that preparing for the future sometimes means rethinking how they operate. What buying changes can you make at your grow operation to help decrease your susceptibility to the next supply chain crunch?

Ryan Douglas

Ryan Douglas

Ryan Douglas helps businesses cultivate a profitable future in the cannabis industry. He is the founder of Ryan Douglas Cultivation, LLC and author of From Seed to Success: How to Launch a Great Cannabis Cultivation Business in Record TimeRyan has worked in commercial horticulture for 25 years and specializes in legal cannabis start-ups.

Before entering the cannabis industry, Ryan spent 15 years as a commercial greenhouse grower of ornamental and edible crops, growing up to 600,000 plants annually. As Master Grower from 2013 to 2016, he directed cultivation for Tweed Inc., the flagship subsidiary of Canopy Growth Corporation. Ryan now offers cultivation advisory services to cannabis operators worldwide, and he can be reached through his website, douglascultivation.com.

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