Navigating Developments in Recreational & Medical Marijuana in Germany

Higher Yields Consulting Navigating Developments in Recreational & Medical Marijuana: Germany

Poised to lead the way for legalization of both recreational and medical marijuana, Germany nevertheless faces a number of challenges that stand in the way of an effective, efficient cannabis program. 

From international policies that make legalization tricky to license requirements that are difficult to meet, there’s a lot standing in the way of Germany’s up-and-coming cannabis program. That’s where we come in.

Working with global experts like HYC can help cannabusinesses in Germany and around the world learn from mistakes we’ve seen play out here in the U.S. and prepare for regulations that have yet to be announced. 

Here’s what you need to know about the programs for recreational and medical marijuana Germany is developing and how to avoid repeating U.S. cannabis industry mistakes.

Recreational & Medical Marijuana: Germany & the EU

Following the 2017 legalization of medical marijuana, Germany is now in the process of creating an adult-use cannabis program. But while the demand for recreational cannabis is high, the German government is more cautious. 

European Union (EU) treaties and drug policies make it tricky to legalize recreational cannabis in just one country. Doing so leads to a problem similar to what we’ve seen here in the U.S., where crossing the border out of a state where adult-use is legal and into one where it isn’t can get you into a lot of trouble. 

And as programs continue to develop for recreational and medical marijuana, Germany faces a catch-22 situation: license applicants will need to have prior experience operating a cannabis business, but since the sale of recreational cannabis products has never been legal, no one has this type of experience. 

If the program is successful, however, Germany may well become the California of Europe. Having legalized medical marijuana in 1996, California was the first U.S. domino to topple. Just two years later, four more states (Washington, Alaska, Oregon, and Nevada) followed suit, with many others right behind them.

Likewise, Germany’s legalization of adult-use will likely be a huge breakthrough for cannabis in Europe, especially if they’re able to accomplish it in a unified manner in cooperation with the rest of the EU.

Learn from U.S. Mistakes

There are a number of lessons about handling recreational and medical marijuana Germany can learn from the U.S. — many of them cautionary. 

To begin, cannabis programs need to be built for long-term economic sustainability. In a case like Oklahoma’s, however, where thousands of licenses are offered and it’s easy to apply, win a license, and open up shop, the cannabusiness failure rate is through the roof.

But it’s not enough just to limit the number of businesses. For example, in 2015, Florida issued Medical Marijuana Treatment Center (MMTC) licenses to a limited number of operators who, thanks to political lobbying, could open up as many retail locations as they wanted. This made it easy for big companies to corner the market. 

A better approach is to limit the number of licenses — not just operators — while testing out the market, and build from there. Or, like Massachusetts, to limit the amount of cultivation space allowed per license. This helps keep some of the bigger operators out, limiting their ability to take over the market.

Finally, for another disastrous program to avoid emulating, look no further than Illinois. In addition to a social equity scandal and resulting lawsuit, the state has taken a backwards approach to awarding licenses — retail before cultivation — allowing stores to open before product would be available to fill them. 

Cannabis Developments to Watch

Because of the lack of experience operating cannabusinesses, either for recreational or medical marijuana, Germany — and programs expanding throughout the EU — will need to rely on global experts to prepare for the challenges ahead. 

It’s essential to keep a finger on the industry pulse to know what (and when) programs are rolling out and what specific regulations will look like. Some regulations to watch include:

  • Compliance and tracking: Will there be a required provider — like METRC in many U.S. states — or will any kind of seed-to-sale tracking platform be sufficient?
  • International cooperation: How will each country’s program operate alongside others within the EU?
  • Social equity (or social injustice programs): Since the goal of such a program is to bring social and economic impact to those who have been disadvantaged, what specific injustices will the program address, and for whom?

How each country’s program is shaped will likely affect the best strategy for entering the market.

You’re Not Alone

As Europe continues moving toward the legalization of both recreational and medical marijuana, Germany and its aspiring cannabusiness owners will do well to learn from the myriad of cannabis regulation experiments within the U.S.

Don’t try to navigate this complex field on your own — work with global cannabis experts who can help you take the best steps forward. Reach out to us to schedule a consultation.

How MSOs Are Missing the Mark on Data & Cannabis Software

Higher Yields Consulting How MSOs Are Missing the Mark on Data & Cannabis Software

New cannabis software solutions present exciting opportunities for the entire cannabis industry through data sharing and analytics. Unfortunately, many of the bigger players in the field — namely, multi-state operators (MSOs) — are holding everyone else back.

Higher Yields Consulting How MSOs Are Missing the Mark on Data & Cannabis Software

Access to information benefits everyone, but MSOs don’t seem to see it that way. Instead, they keep their data locked in silos where only they can see and analyze it. This prevents professionals across the value chain from improving their operations for the good of all. 

Read on to learn how MSOs are missing the mark when it comes to data and cannabis software — and what needs to change in the industry at large. 

The Problem With MSOs

MSOs tend to be very guarded with their data, without realizing the potential that data has to benefit the entire industry. New cannabis software can share data across even cannabusinesses that aren’t vertically integrated, enabling collaboration and mutual improvement across the board. 

For example, an MSO that owns six retail licenses in a given market has a decent understanding of how the end consumer is influencing the market’s structure. If that information is shared with the brands, they can work to reduce their own waste and better serve retailers, who can then better serve their own end customers. 

Unfortunately, that isn’t what usually happens. Instead, these MSOs have tunnel vision that’s zeroed in on dominating their own market at the expense of everyone else. They prioritize big, flashy ideas to generate revenue over fine tuning operations that already exist.

Because these MSOs are more focused on appealing to investors than on longevity and best practices, they may be making quick dollars here and there, but in the long run, they’re leaving money on the table. 

The Power of Data Sharing 

As the saying goes, a rising tide lifts all boats. To solve this problem, industry-wide cannabusiness operators need to work together and use their own cannabis software and solutions to share and analyze big-picture data that goes beyond the aggregate level. 

Take Amazon, for example, which had to build its own internal tools to process the sheer amount of information generated by the public’s interaction with the website. When the company realized others could use those tools, as well, Amazon Web Services was born.

That’s exactly what Higher Yields is building with its cannabis software solutions and data tools suite. Instead of keeping important information contained within each business’s silo, actionable data should flow across the supply chain to inform every area of the industry.

Higher Yields Consulting How MSOs Are Missing the Mark on Data & Cannabis Software

If and when this goal can be accomplished — that is, cannabis software for data sharing and analytics becomes mainstream, establishing a network of growing businesses that are effectively sharing and leveraging data — the industry will see improvement in the form of:

  • Higher-quality products available to all
  • A more educated end consumer
  • Decreased stigma and inequalities
  • Increased economic opportunity 

Sharing information helps both reduce waste and create better quality, impacting every participant up and down the value chain, whether they’re directly or indirectly involved. 

Start Small With Existing Cannabis Software & Data

For those just getting started, data analytics may seem intimidating, but it doesn’t have to be. Start with small, deliberate changes to how you interpret and use the data your existing cannabis software is already capturing. No need to jump straight into complex machine learning algorithms. 

The Pareto Principle (also known as the 80/20 Rule) is very relevant here: 80% of your problems are likely coming from 20% of your process. Make small changes to that 20% and you’ll solve a lot of your headache. As you get comfortable with those processes, you can ease into analyzing and acting on more complex models. 

Ultimately, the goal is to create a culture of data-driven decision making in which everyone is responsible for holding everyone else accountable to the insight that’s derived from the shared data. 

To get there, MSOs will need to change their mindsets toward information availability. Instead of keeping their data locked up in their own silos, they’ll need to understand and accept that accessible information benefits everyone — themselves included.

Can the Giants Learn to Share?

When everyone has access to information, everyone wins. When some industry players — especially big ones like MSOs — keep their information stores locked away, we all lose out on valuable data and opportunities. 

But through collaboration and effective use of cannabis software for data sharing and analytics, we can all work together to create a culture of data-driven decision making that promotes improvement throughout the whole industry. Ready to start building a solid network? Connect with us on LinkedIn.

Why Your Cannabusiness Needs an Adaptive HR System

Higher Yields Consulting Why Your Cannabusiness Needs an Adaptive HR System

As the cannabis industry grows and cannabusiness owners put down roots, they will continue to face and navigate changes. Only businesses with effective and adaptive HR systems will be equipped to handle the shifting environment.

Historically, the cannabis industry was fraught with under-the-table dealings and legal roadblocks. Due to federal regulations, many cannabusinesses couldn’t even get bank accounts or loans.

Higher Yields Consulting Why Your Cannabusiness Needs an Adaptive HR System

Now, as more states legalize cannabis, the industry itself is becoming more formalized. While that’s good news in terms of more widespread acceptance and opportunities, it can also cause new, unexpected headaches for cannabusiness owners without adaptive HR systems in place.

Read on to learn more about ongoing changes in the cannabis industry and why you need an adaptive HR system. 

Changes in Employee Empowerment

Currently, medical-use cannabis is legal in 39 states and the District of Columbia, 21 of which (plus D.C.) have also legalized recreational cannabis. With this legalization comes a push from employees for more formalized HR policies to protect them from being taken advantage of. 

The more empowered cannabis employees feel, and the more formalized policies are enacted, the more cannabusiness owners will need to adjust in response. Adaptive HR systems, then, can position your business to proactively address your employees’ changing needs, thereby empowering both your employees and your business.

Cannabusinesses that don’t have adaptive HR systems to help them understand and respond to such policy changes will be left behind, especially as these developments aren’t always predictable. 

Unexpected Unionization in the Cannabis Industry

Normally, unionization in any industry comes after years of perceived unfair treatment. 

That’s not the case in New Mexico, where cannabis legalization is so recent that the state barely has any cannabis industry employees in the first place. Its Labor Peace Agreement is a great example of how industry changes can come seemingly out of left field.

Higher Yields Consulting Why Your Cannabusiness Needs an Adaptive HR System

Without an adaptive HR system, trying to navigate such regulations could be a huge thorn in your side. You’ll be on your own to understand new policies, communicate them to team members, and ensure your cannabusiness remains compliant. 

New Mexico is just one example of how quickly new regulations and policies can appear on the cannabis scene. More unanticipated changes are sure to follow, so make sure your cannabusiness is prepared to adapt when — not if — they do. 

Adaptive HR Systems Are Key

While unexpected developments like the Labor Peace Agreement are inevitable, no cannabusiness owner should have to deal with them directly. Instead, focus on what you do well and leave the rest to adaptive HR professionals. 

If you’re not part of a large organization or you don’t have strong investor backing, the best thing you can do is run lean and mean for now. Outsource what you can to expert industry service providers. If you have the resources, hire a lawyer to help you decipher new regulations as they appear. 

Even if your resources are limited, take advantage of the ones you have, giving priority to expert, adaptive HR professionals. More than just staffing and recruiting, HR is human capital management — and it’s essential to your success.

Whatever you do, don’t hand this off to an administrative assistant. Credentials matter; you need people who are specifically versed in human relations and whose attention isn’t focused on other aspects of the business. 

Don’t Cut Corners

Cutting corners on HR opens you up to all kinds of public exposure and negative chain reactions. Set your cannabusiness up for its best shot at success by prioritizing adaptive HR systems and professionals. Only then will you be prepared to swing at every curveball this ever-changing industry throws.

To learn more about our adaptive HR support services, contact us today.

Overvaluation Is Corrupting the Cannabis Industry

Higher Yields Consulting Overvaluation Is Corrupting the Cannabis Industry

The cannabis industry is rife with major operators who are all trying to win the day without considering the long term. Rather than looking inward to develop and improve, these businesses are focusing solely on the next big acquisition or merger for their own gain, leading to overvaluation and plummeting stocks.

Higher Yields Consulting Overvaluation Is Corrupting the Cannabis Industry

At the root of this problem is ego. Many multi-state operators (MSOs) buy up smaller cannabusinesses hoping for a bigger slice of market share, but they’re not putting in the internal work required to develop this new industry. As a result, we see disruption and a lack of quality in the industry at large.

Read on to learn more about how overvaluation and a failure to look inward are crippling the future of cannabis — and what you can and should do differently.

Overvaluation Causes Stocks to Plummet

Thanks to overvaluation, cannabis stocks have been plummeting for some time now. People tend to think more licenses will guarantee more revenue, so a higher valuation is promised. But when the business fails to meet those targets, people start to lose faith in the business itself and in where the market is headed overall.

To be fair, unlike with other business types, it can be very difficult to get an accurate valuation for a cannabusiness; a number of factors add to the unpredictability:

  • Market share: The number of licenses issued in a given state can change drastically from one year to the next, causing market share to dwindle without much warning. 
  • MSOs vs. social equity: Big MSOs are coming in and either buying out social equity applicants or leaving them there to fill a quota and lobbying for more licenses on top of an already saturated market. 
  • Real estate: Landlords intentionally jack up real estate prices because they know they’re sitting in a green zone, putting more pressure on smaller operators without access to the same funding that MSOs enjoy.

Many of these overvaluation and market share problems aren’t new — they’ve played out in the cannabis industry before. Yet few businesses seem to learn from past mistakes and instead continue to repeat them. 

Value Comes From Within

A great example of overvaluation and its impact is the recent acquisition of Columbia Care by Cresco Labs. Far from two industry giants wanting to work together, this acquisition happened out of necessity. 

Because both companies failed to grow as projected, the only way they could hit their targets was to merge. Neither gained anything in the end; had they not merged, the valuation for each company would have been half of what their combined valuation is now. 

Higher Yields Consulting Overvaluation Is Corrupting the Cannabis Industry

How does this kind of overvaluation happen? It often boils down to a failure to look inward and properly develop the business’s internal operations. That means: 

  • Hierarchy and communication are nonexistent. Important business questions go unanswered because no standard has been set for internal communication or handling fundamental business operations.
  • No one pays attention to quality or operational excellence. People are just throwing stuff at the wall to see what sticks, not bothering to improve on what doesn’t work. 
  • People try to get ahead by screwing over others. Social equity applicants are being paid pennies instead of what they’re actually worth, and large operators are focusing on beating out the competition as quickly as possible.

Instead, to develop the business’s value internally, large cannabusinesses should consolidate departments and brands to create a recognizable, consistent franchise. That’s how you avoid overvaluation and actually protect your market share, because doing so gives you a tangible brand presence in the market. 

Cannabis Is a Business

According to a recent Politico analysis, “two dozen of the largest publicly traded U.S. operators… collectively lost more than $550 million in the first six months of this year on revenues of nearly $4.5 billion.” While the article claims this loss stems from federal illegality, that’s not necessarily the case. 

Blaming federal illegality caters to the perspective of MSOs, enabling and perpetuating what’s really disrupting the industry: overvaluation caused by bad business practices. 

Aside from compliance requirements, cannabis is no different from any other agricultural product. For a business — agricultural or otherwise — to run well, it needs proper internal governance for day-to-day operations as well as a commitment to quality, consistency, and growth. 

Think Long Term

Solving the problem of overvaluation in the cannabis industry requires long-term focus. Don’t just aim to win the battle — dig your heels in and focus on quality and operational excellence so you’ll be equipped to win the war. 

To do this, you’ll need to rely on allies whose strengths fill the gaps in your own. At HYC, we pride ourselves on understanding those gaps to help you strengthen proper business operations and profitability from within.

Read to take the first step? Reach out to us to schedule a consultation.

Considerations for Opening a Dispensary or Building a Cannabis Facility

Higher Yields Consulting Considerations for Opening a Dispensary or Building a Cannabis Facility

As more states create cannabis programs, expectations and standards are becoming more defined, but there’s still a lot of uncertainty in the industry. Whether you’re opening a dispensary or building a cannabis facility, just getting started can be harder than you think.

As we learned from a recent expert panel on the Business of Cannabis, the majority of aspiring cannabusiness owners greatly underestimate the amount of time, resources, and funding they’ll need to get off the ground.

Higher Yields Consulting Considerations for Opening a Dispensary or Building a Cannabis Facility

Because each state is different, the panel experts advised that anyone interested in opening a dispensary, cultivation, or extraction and manufacturing facility start by carefully reading their state’s regulations and rules. Then, take advantage of every available resource, including professional guidance. 

Read on for more key considerations about the business of cannabis for anyone interested in opening a dispensary, launching a cultivation, or building an extraction and manufacturing facility.

How to Save Failing Social Equity Programs 

Historically, social equity programs haven’t had much success. Most applicants simply don’t have the resources to compete against big multi-state operators (MSOs), and are often taken advantage of as a result.

Since MSOs control the price, they control the product. The key to improved social equity programs, then, boils down to properly allocated funds, education, and resources to help small businesses and minorities band together against MSOs. 

There are two approaches to accomplish this. First, state governments can create incubator periods with designated facilities to provide each social equity applicant with the education and experience needed for successfully opening a dispensary, cultivation, or extraction and manufacturing facility. 

Second, on a more local level, towns and municipalities with existing MSOs can use the money gained from those MSOs to train and support social equity operators while amplifying those operators’ own voices. 

Cannabis & the Workplace

Regardless of whether you’re opening a dispensary, building a cannabis facility, or overseeing employees at any other type of cannabusiness, it’s important to understand that the legalization of cannabis has prompted new questions about regulating employee consumption. 

To help keep workplaces safe for all, employers will need to update company policies with cannabis-specific language and train current and future employees on the appropriate procedures. 

Considerations to address include:

  • Dignity & privacy: Considering how long cannabis remains detectable in a person’s system, understand the circumstances under which you are allowed to test, and how to conduct tests with respect to employees’ privacy. 
  • Testing & reports: When and how will tests be conducted? What actions will be taken if there are positive tests, reports, or accidents on the job? Spell out expectations and procedures as clearly as possible. 
  • Offsite prohibitions: Understand what restrictions employers can and can’t enforce on the use of cannabis when employees are not at work, especially if the employees have medical reasons for consumption.
  • Medical use: While employers are not required to allow cannabis use onsite — even for medical purposes — certain accommodations may be needed to address the reason an employee has been prescribed medical cannabis.
  • Working from home: This is an extremely gray area, as cannabis use while working from home is difficult or even impossible to detect and enforce restrictions on. 

Ultimately, employers who actively engage with cannabis policies and listen to their employees’ needs and concerns will be best equipped to cultivate a safe and comfortable working environment. 

Introducing Cannabis to the Community

Cannabusinesses have enormous potential to benefit local economies by bringing in new business and real estate revenue. However, many municipal officials, landlords, and communities maintain closed-off attitudes toward the industry and treat cannabusiness differently than other small businesses.

Higher Yields Consulting Considerations for Opening a Dispensary or Building a Cannabis Facility

Despite state-level legalizations, cannabis is still federally illegal, and some people simply won’t be open to it as long as that’s the case. But while certain communities may never fully embrace the industry, others will open up in time as they see its positive effects on neighboring municipalities. 

In the meantime, if you’re serious about opening a dispensary or building a cultivation or extraction and manufacturing facility in your municipality, the best thing you can do is start making connections with local officials, help correct misconceptions, and educate your community about the benefits of cannabis. 

Section 280E: The Cannabis Industry Stumbling Block

One of the biggest hurdles for anyone considering opening a dispensary, cultivation facility, or other cannabusiness is finances, especially taxes. 

Cannabis is still considered a Schedule 1 controlled substance, so according to Section 280E of the Internal Revenue Code, cannabusiness owners are unable to take typical business tax deductions or credits on the income gained from cannabis sales. 

However, while no one can avoid Section 280E, there are still many tax deductions that cannabusiness owners can and should take advantage of. Taxes aside, there are plenty of financial resources available online, from events and conferences to expert consultants. 

If you are considering opening a dispensary, cultivation or manufacturing facility, or any other cannabusiness, be sure to research financial opportunities thoroughly, keep your records in order and above reproach, and take every tax deduction you can. 

Cost of Opening a Dispensary or Cannabis Facility

So what does the process of opening a dispensary, launching a cultivation, or building an extraction facility look like, and just how much money do you need? 

While costs vary greatly, opening a dispensary can cost between $150,000 and $8.5 million. Setting up a cultivation facility typically costs around $400 per square foot, plus operating expenses. Building an extraction facility can cost anywhere from $8,000 to $1 million, depending on the processes and equipment used. 

The process of opening a dispensary is often fairly quick and straightforward, but building an extraction or a cultivation facility may involve higher equipment costs and, sometimes, frustrating delays. 

For those who can’t afford steep setup costs, a few states offer the alternative to start out as a microbusiness and potentially convert to a bigger business once established. Starting a microbusiness carries the same degree of difficulty as any other business, but it comes at a much smaller cost of entry and could be a viable option for some. 

Start Preparing Now

Despite the challenges of getting started, the cannabis industry is ripe with potential for those who are able to follow due processes. If you’re considering opening a dispensary, a cultivation facility, or another cannabusiness, don’t wait — even if your state’s program isn’t open yet, you don’t want to fall behind. 

Starting up a cannabusiness is not easy money. To be successful, you need to understand how to run a business in this specific industry, and for that, you’ll need expert guidance every step of the way.

Ready to start laying the groundwork for your own cannabusiness? Reach out to us to schedule a consultation today.

New Developments for Cannabis in Europe

Higher Yields Consulting New Developments for Cannabis in Europe

Developments for cannabis in Europe appear to be about five to 10 years behind those in North America. It’s slow going, and while some European countries have legalized the use of cannabis, others are still not quite there.

Higher Yields Consulting New Developments for Cannabis in Europe

This creates an interesting dynamic where countries that aren’t yet on board with cannabis legalization may have difficulty policing the transport of cannabis over the border from those that have legalized it. 

Read on to learn more about new developments for cannabis in Europe. 

What’s New for Cannabis in Europe

Legislation for cannabis in Europe may be comparatively slow to develop, but we have seen some movement that indicates continued growth in the near future. Here are seven countries making headway in cannabis legalization.

Luxembourg

Having pledged in 2018 to create an adult-use program by 2023, Luxembourg has recently proposed legislation that would allow adults to keep up to four cannabis plants in their homes or gardens. 

Although the country was not the first European nation to legalize cannabis as initially anticipated, they’re still among the first to set this kind of legislation in motion. 

Germany

Germany has also recently announced plans to legalize cannabis for adult use, though details about specific regulations are still in flux. 

Since there is also talk of Germany becoming the first European nation to legalize the sale of adult-use cannabis, the country has potential to become one of the bigger importers and distributors of cannabis in Europe.

Malta 

The tiny island country of Malta was actually the first in the EU to legalize adult-use cannabis, which it did on December 14, 2021. 

The legalization allows for home grows of up to four plants, but does not permit public consumption or carrying more than seven grams of cannabis. Still, it’s a historic move that may influence progress in other European countries.

Spain

While cannabis is largely illegal in Spain, cannabis clubs have been generally tolerated, and the country is one of the largest producers of cannabis in Europe. 

Recently, however, legislation has been proposed for the legalization of medical marijuana in Spain. Whether the proposal will succeed remains to be seen.

France

In March of this year, France legalized medical cannabis and has been in the midst of medical trials since 2021.

Higher Yields Consulting New Developments for Cannabis in Europe


Any progress on the adult-use front is still very slow moving. 

UK

Neither medical nor adult-use cannabis is legal in the U.K. at this time.

Although the mayor of London, Sadiq Khan, recently set up a drug commission to discuss legalization, there’s not a lot of movement just yet.

Portugal

Portugal was among the first EU nations to legalize medical cannabis in 2018, and now, it looks like the country is on its way to legalizing adult-use, as well. 

That said, exact legislation and regulations have yet to be defined.

Looking Ahead

In some ways, the approach to cannabis in Europe is similar to that in the U.S., with some countries legalizing cannabis and others not yet, just as some states have legalized it and others have not. 

To better control black market operations, the EU will likely need to step in and set preliminary regulations around international trade and transport. Setting high standards of regulation would help cut down on black market growth and establish more sustainable programs for cannabis in Europe. 

Additionally, similar to Canada, more progressive attitudes toward health care could help medical cannabis act as a stepping stone to full legalization. 

Slow but Steady

While cannabis in Europe may be moving slower than in North America, that position also gives European programs the ability to learn from U.S. and Canadian developments and start their cannabis economies off strong. We anticipate a fairly smooth transition into legalization from here.

Looking for more updates on the cannabis industry? Visit our website today.

Benzinga: Navigating Increased Industry Complexities

Higher Yields Consulting Benzinga Cannabis Event Takeaways for Navigating Increased Industry Complexities

As a learning organization, we’re always on the lookout for new industry trends and challenges to help cannabusiness owners excel. To that end, we recently attended a Benzinga cannabis event so we could learn more about upcoming changes and add more value for our clients. 

What we learned at this cannabis event presents a reality check to the entire cannabis industry. There’s a transformation happening in that this already-complicated industry is getting even more complicated, and the psychedelic industry is adding new complexities on top of it all.

Higher Yields Consulting Benzinga Cannabis Event Takeaways for Navigating Increased Industry Complexities

But these challenges are not without their opportunities. With the right partners and an understanding of existing and emerging challenges for this ever-shifting industry, there’s plenty of potential for growth. 

Here are our top three takeaways from the Benzinga cannabis event to help you navigate new developments and potential complications.

Psilocybin: Psychedelics vs. Cannabis

Our first day at the cannabis event had us learning about psilocybin and the emerging psychedelic market. Shark Tank judge Kevin O’Leary spoke about his plans to invest in psychedelics but not cannabis, citing the psychedelic industry’s intent to gain FDA approval for medicinal use right away. 

This, when approved, will drive institutional funds into the psychedelic market. Meanwhile, O’Leary predicts the cannabis industry will become a commodity-based industry in just two years.

These side-by-side discussions of psychedelics versus cannabis were eye-opening to say the least. If you think of the two substances in terms of plants versus mushrooms and consider the stigma surrounding both, they almost seem to be cousins — related, but different. 

However, contrary to what we would have predicted, the two industries appear to be heading down completely separate paths. Instead of partners pushing progress together, the industries are emerging more as competitors and will likely put pressure on each other to raise the bar or be left behind.

Identifying & Securing Capital Partners

The second eye-opener of this cannabis event was a look back at just how far the cannabis industry has come in a relatively short amount of time, particularly when it comes to the availability of investment funds. 

Just a few years ago, with how aggressive the DEA was in shutting down cannabis operations, it was extremely difficult to find investors. Today, however, there are a plethora of capital vehicles through which to take on debt, sell equity, go public, and so on. 

With that said, there’s still room for improvement, especially for startups. While there is some seed capital available, the majority of people seem to want to invest in established businesses that have either cashflow or actual assets that are in operation.

Higher Yields Consulting Benzinga Cannabis Event Takeaways for Navigating Increased Industry Complexities

With so much progress being made — and so much progress still to be made — there’s a distinct need for partners who can help new and existing cannabusiness owners coordinate all the different entities, partners, and complexities involved in navigating the industry. 

There are a lot of partners out there who specialize in one or two aspects, but without a central hub overseeing the entire process, there’s potential for a huge loss of continuity. That’s why Higher Yields Consulting is committed to helping cannabusinesses grow all the way from concept to operational excellence. 

Filling the Real Estate Gap

Finally, our third takeaway from the Benzinga cannabis event is that when it comes to real estate, most tools and technologies out there are lacking in some capacity or another. 

So far, no other mapping tool on the market is as useful, versatile, or robust as the one we’ve developed for locating green zones nationwide. Those that do exist tend to lack in data analytics and leveraging connections, causing significant delays, or be limited to only one state or region. 

Securing the right real estate is a vital step in securing capital. While other partners aren’t as focused on mapping tools as a service, we believe this technology will lead the industry through finding properties and getting more deals done. That’s why we’ve dedicated so much time and so many resources to its development. 

Bringing Cannabis Event News to You

Through this cannabis event and other learning opportunities, we’re grateful for the ability to stay tuned into the cutting edge of the cannabis industry. 

HYC exists because we’re passionate about cannabis and the good this industry can do in the world. We’re committed to using our knowledge to help cannabusiness owners like you stay abreast of industry changes and complexities throughout your cannabis journey.

For help navigating the ever-changing world of cannabis business development, reach out to us!

How Cannabis Genetics Impact Your Business Strategy

Genetics impact everything about your cannabusiness, from whether you focus more on quality over quantity to your revenue and how you position yourself in the market. A successful cannabis business strategy begins with the end in mind and a commitment to quality in the genetics of your plants.Higher Yields Consulting How Cannabis Genetics Impact Your Business Strategy

If, for example, your end product is flower, the approach you take to genetics should be different than it would be if your end products were extracts and concentrates. 

Read on to learn more about the importance of cannabis genetics and how to create a long-term business strategy that places genetics at the forefront of your planning. 

Cannabis Genetics: A Crash Course 

When we breed plants, we cross male and female plants to get seeds. That’s what we call our F1 generation. But half those seeds will be males that we have to throw out. The other half will be females, but some will take on majority male characteristics, some will take on majority female characteristics, and some will be roughly 50/50. 

As we go through that F1 generation, we ask ourselves what characteristics we want to get from each type — like strong and girthy from the male side, and good-smelling produce with a high THC from the female side, for example. 

Once we weed out the F1 plants with characteristics we don’t want, we’ll take the females from the narrowed-down group and cross them again with the males to get our F2 generation. Of the F2 generation, the males will be thrown out again, but the females will be much more consistent in the characteristics we’re looking for. 

If we were to stop at the F1 generation, the plants likely wouldn’t produce the way we wanted them to or have enough potency. That’s why it’s important to put in the time to develop the characteristics we want through multiple grows. 

Quality Assurance: Start at the End

Your end goal and your plants’ genetics go hand in hand. For example, imagine you have two plants. One tests at 30% THC and gets you two pounds of light. The other  plant tests at 20% THC, but gets you three pounds of light. 

If your goal is extraction, the first plant will be more efficient. But if your business strategy is to sell raw flower, the second plant will produce more biomass and therefore be the better choice. When you know what you’re growing for, you know what characteristics you need your plants to have.

Many cannabusinesses have quality assurance (QA) programs for the back end of their product. Once the product is finalized and trimmed, it passes through QA before being brought to the shelves. But many businesses neglect the QA process for their plants’ genetics — and they shouldn’t. 

Know the Data of Your Plants

QA will give you a more accurate idea of not only what crops you can expect to yield but also the timeline they will need. Indoor growing follows an assembly line, so it’s critical to know how many times you can turn over the space and build that into your business strategy. 

If some plants take 14 weeks to finish flowering and others take eight weeks, you’ll end up having a gap in your assembly line. And any time plants aren’t under the flowering lights, your cannabusiness is losing money.

Higher Yields Consulting How Cannabis Genetics Impact Your Business Strategy

When you understand the data of your plant, you have a better idea of what to expect from it and when you’ll need to fill gaps in the assembly line. Then you can more accurately determine if a given plant qualifies to be brought into your facility in the first place.

For example, if you have 10 feet between the table and the light, you need to know that your plants will only grow to be eight feet tall and not 10. In this way, your plants’ genetics impact everything in your facility, from lighting and space to THC and beyond. 

Fit the Plants to the System

Another mistake we see people make is trying to tweak their system to grow a certain strain in their facility. This is dangerous because when you give certain plants special treatment, you open the door for missed or double doses, pests, and all kinds of other issues. 

Instead of adjusting your system to cater to specific strains, only bring in strains that suit your system. It could be a great plant objectively, but if it doesn’t fit your system, it’s going to take up precious time and resources. 

Genetics & Brand Messaging 

The impact genetics have on your brand and messaging really goes back to the question of quality versus quantity. Do you want to be the Budweiser or the Delirium of cannabis? 

If your business strategy is for your product to be accessible and common, then you’re prioritizing quantity — although, of course, quality always matters. If you’re a high-end brand, on the other hand, quality should be your chief concern. You can demand a higher price for a special, stand-out product.

Also consider what you want your brand to be known for: novelty or dependability. Do you want to be known for your staple products or for bringing new strains to the market? Both strategies work, but they have to be well thought-out. 

You need a solid business strategy from the beginning, detailing how you’ll get to your end goal — be it quality or quantity — and how you’ll make your product resonate with the people you’re trying to bring it to.

The cannabis market is maturing. People do want potency, but they also care about cannabinoids and terpenes. When you factor genetics into your business strategy and can explain to your audience how you are controlling the quality of your plants and the traits you are breeding for, you will stand out from the crowd. 

Start Building a Successful Business Strategy Today

A strong cannabis business strategy starts at the beginning with a solid understanding of how genetics impact your entire business. You need to have a plan in place for every part of the process, all leading to and supporting your end goal. 

At HYC, we understand how cannabis genetics impact your planning and long-term success. Contact us today to learn more and start implementing better quality assurance in your business.

How to Expedite the Cannabis Property Selection Process

Real estate often causes cannabusiness owners to spin their wheels. With short application windows and the need to have contingency plans in place, it’s easy to prolong your search for the right cannabis property.

But finding the right location for your cannabusiness doesn’t have to take forever. If you do it right, you can speed up the process and get to building your business faster. That said, a cannabis property must meet very specific zoning requirements and should thus be approached differently than other kinds of real estate.

Higher Yields Consulting How to Expedite the Cannabis Property Selection Process

To that end, we’ve developed an expedited process to help you find a cannabis property without getting blindsided by common real estate roadblocks. 

Here’s our step-by-step process for finding your cannabis property more efficiently.

Start With the Green Zones

The first thing you need to know is how to choose the areas in which to look for your cannabis property. Many people do this by choosing a city, downloading a list of 1,000 or so properties in that city, and narrowing the list down to 100 properties from there. 

But once they start going through those specific properties, they find that none of them actually qualify as cannabis properties because they aren’t zoned properly. 

We created our green zone assessments for this very reason — because no one wants to settle on a location only to find out their cannabusiness isn’t legally allowed to operate there. Instead, our process starts with establishing where the facility you plan to operate is allowed to be, and then choosing from those locations.  

Research the Requirements

Once you know where your cannabis property can legally exist, do your research to find out what requirements it will need to meet, with special attention to regional and municipal setbacks

Usually, a city will determine setbacks based on how far the property is from a dispensary or how many dispensaries and cannabis facilities can be in a certain ZIP code or territory. But they’ll also dictate how far a facility must be from churches, day care centers, schools, and rehab facilities. 

These kinds of facilities are constantly shutting down and opening up, but the city might only update their green zone map once per quarter — meaning the map can become inaccurate within a week. 

At HYC, we use a number of systems and databases to create our own up-to-date green zone maps with all relevant setbacks factored in. From there, we search for addresses within those areas, giving us a narrowed list of addresses we then verify with the city to determine if they truly qualify to be used as cannabis properties.

Get Boots on the Ground

Once we have our narrowed list of potential properties, the next step is to get out there and physically scope out the area. Sometimes you’ll even find a cannabis property that isn’t in the system because it isn’t for sale or lease just yet.

Higher Yields Consulting How to Expedite the Cannabis Property Selection Process

Don’t be afraid to knock on the doors of qualified properties and ask about the company’s lease and when it expires. But be very targeted in which doors you knock on, otherwise you’ll be wasting your time. 

Above all, you need to have a process. A lot of brokers make the mistake of thinking any property will work and end up whittling down the list of possibilities into locations that in fact won’t. 

Protect Yourself From Real Estate Pitfalls

Even once you’ve found the property, you still need to be strategic as you negotiate with the landlord. Some landlords may try to charge more or create a bidding war once they find out you intend to use the space as a cannabis property. 

Protect yourself when negotiating for a cannabis property with a contingency agreement, which keeps you from being bound to the property if your license application is denied. Contingency agreements can be difficult to negotiate because of the risk they pose to landlords, so you may have to explore creative solutions.

In some cases, you can put the landlord’s mind at ease by putting down a deposit or agreeing to a smaller monthly lease until your application is officially approved. You might even have to give up equity in your business to be able to lock down the property. 

If you’re lucky, you might work with a developer who’s early in their career, has a bunch of properties, and is willing to roll the dice on your cannabis property while they get the others up and going. 

Finding a Cannabis Property Doesn’t Have to Take Forever

Choosing your cannabis property can be one of the most difficult parts of opening up a cannabusiness, especially if you approach it like you would any other type of real estate. But with the right process and tools, you can minimize risks and choose your property efficiently. 

To get expert guidance and a tried-and-tested process, contact HYC for a green zone assessment and to find the most lucrative cannabis property for your business.

What to Expect From the Louisiana Marijuana Program & Other Southern States

Higher Yields Consulting What to Expect From the Louisiana Marijuana Program & Other Southern States

The Bible Belt certainly isn’t known for being particularly friendly to cannabis, but opportunities are slowly starting to open up in certain areas. The Louisiana marijuana program is one example of a small but promising start, and a few other Southern states show limited potential, as well. 

While as a whole, the Southern states are often slow to accept cannabis as anything other than a drug, there have been significant shifts. Florida, for instance, was the first to legalize medical marijuana and open up a cannabis program (albeit an extremely limited one). 

Higher Yields Consulting What to Expect From the Louisiana Marijuana Program & Other Southern States

Here’s what you need to know about the state of cannabis in this hold-out region of the U.S., from the bare-minimum Texas CBD allowances to the small-but-promising Louisiana marijuana program. 

Southern States With Little to No Movement

The Florida, Texas, and Mississippi marijuana programs may have had decent starts but have since stalled for the foreseeable future — or at least the next few years. We’re keeping an eye on them for future developments, but we don’t expect much movement at this time.

Florida 

True to the common conception of Florida as a separate entity from the rest of the South, Florida’s marijuana program is very different from what we see in other states.

Initially, Florida’s program issued only five licenses, though it later opened up a few more. However, Florida’s program is not an open application route, so no one is currently able to compete for licenses in the state. 

Although Florida’s legalization measures helped trigger a domino effect to get the other Southern states moving, it’s likely to be a few years before Florida’s own program picks up any further momentum.

Texas 

Texas does have a medical marijuana program, but the state allows only 1% THC in their medical marijuana products. At such a low THC rate, it’s essentially a CBD program. And it’s very minimal — just over 3,000 patients are registered, and there isn’t much movement happening in the state, overall. 

If you want to get into the Texas market, be prepared to work exclusively with CBD and CBD-adjacent products for a while. Cultivation is another option to consider, but the market is saturated. While we don’t recommend starting out in Texas at this time, if you’re so inclined, manufacturing will be your best bet. 

Mississippi 

In early 2021, Mississippi looked like it would follow in Oklahoma’s footsteps in terms of plentiful and accessible license availability. Unfortunately, however, government and legislative issues have put the program on hold for the next two or three years. 

If you want to build a cannabusiness in one of the Southern states, we’d suggest exploring opportunities in the Arkansas, Alabama, and Louisiana marijuana markets instead.

Southern States With Some Opportunities

The Arkansas, Alabama, and Louisiana marijuana programs offer a few more opportunities, especially if you establish the right connections prior to entering the market there. 

Arkansas 

Arkansas is currently legalized for medical cannabis, and the application window is open. However, the state also has a high barrier of entry. You’ll need expensive surety bonds and to meet strict zoning limits. Once a zone fills its allotted number of dispensaries, no more dispensaries will be allowed to open in that zone. 

Higher Yields Consulting What to Expect From the Louisiana Marijuana Program & Other Southern States

While you can certainly apply for a license in the Arkansas medical marijuana program, know that it will be an expensive endeavor and that you may have better luck with the Alabama or Louisiana marijuana markets. 

Alabama 

Alabama’s Compassion Act will likely resemble Florida’s cannabis program. Although there probably won’t be a low THC cap, it does appear as though operators will only be allowed to sell manufactured products — no raw plant, smoking or vaporization products, or baked goods.

The Act also has a large residency requirement — 51% of all license holders must be Alabama residents — as well as huge capital requirements, making the barrier of entry extremely high. 

If you’re looking at entering the Alabama marijuana market, you’ll want to get started as soon as possible finding real estate and establishing yourself as a local team. MSOs are already moving in, but they’re required to work with local teams, and it will take time to build up those connections. 

Louisiana 

The Louisiana marijuana program kicked off in 2018 with a total of nine licenses. But despite being a small program, it was set up well and there are many lobbying efforts to expand cannabis retail.

However, growth within the Louisiana marijuana program is still slow. Louisiana legislation only authorized the Louisiana State University and Southern University agriculture centers to grow medical cannabis, so you’ll have to contact the Board of Pharmacy regarding licensing to dispense any medical cannabis.

As is true of any Southern State, entering the Louisiana marijuana market is all about who you know and how you advocate locally for cannabis. You can’t just show up and submit an application; you have to play an active role in educating the community and helping write ordinances that simply don’t exist yet.

That’s where HYC comes in. We can help you make important local connections and develop the necessary knowledge base to educate your community. There will always be local political challenges, but with the right knowledge and connections — and an early start — you have the opportunity to impact change. 

Get Your Foot in the Door With Louisiana Marijuana

The Louisiana marijuana program offers a fairly typical example of what to expect in Southern states — slow movement, small programs, and the importance of making the right connections. But if you can get your foot in the door early and weather both political and local delays, opportunity is there. 

Working with an experienced cannabis consultant can give you the credibility, connections, and partners you need to be successful. Don’t miss your chance to get into the Louisiana marijuana market early! Get in touch today to schedule a consultation.