Guide To Starting & Scaling A Commercial Cannabis Grow Operation | Prospiant

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As legalized medical cannabis and recreational cannabis usage continues to become more popular, the cannabis industry is becoming more and more scalable. The cannabis industry today is adopting the same methods and protocols as other booming plant sciences. As cannabis continues to grow in popularity, business owners are looking to grow and scale their commercial cannabis business to the next level.

How To Start A Commercial Cannabis Grow Operation

If you are in the beginning stages of starting a commercial cannabis grow operation, there are many different factors you may want to consider. Like any other business, a cannabis cultivation facility requires both time and money to succeed. If you’re looking to take your cannabis business to the next level, below are some best practices that can help. 

Business Planning

A business plan is extremely important for any company, especially those in the commercial cannabis industry. Business plans can help you understand where your attention is needed, long-term timelines, resource allocation, and more. Whether it’s understanding legislation and regulations in your area or documenting the processes your business uses to ensure the cannabis plants grow their healthiest, there are several moving parts to deal with.

Managing all of these moving parts is where a cannabis cultivation SOP can be helpful. A standard operating procedure, called an SOP, is a tool every large-scale cannabis cultivation operation should utilize. Cannabis cultivation SOPs serve as a guide for business owners and their staff to follow when cultivating cannabis. By having a set of guidelines to follow, business owners can ensure that they are producing a high-quality product, that production runs smoothly, and that they comply with federal, state, and local legislation. 

Some important topics you should include in your business plan or SOP should be:

  • Company Goals And Goal Timelines
  • Operations Overview That Includes Your Business’s 
    • Security Protocols 
    • Compliance Processes
    • Waste Removal Processes
    • Logistics
    • Production Processes
  • Business Revenue And Spending Projections
  • Marketing Plans And Strategies
  • Organizational Chart For The Business 

Why Cannabis Cultivation SOPs Are So Important

Why are cannabis cultivation SOPs so valuable? Below are some of the many reasons why standard operating procedures are so vital for any cannabis business. 

You Can Improve The Consistency Of Your Commercial Cannabis Operation

One of the reasons why SOPs are so vital is that they help to ensure consistency within the business’s practices. SOPs help ensure that the cannabis being produced is of high quality. With an SOP to act as a guidebook that any staff member can refer to, it allows everyone to have the same information. Employees then utilize this information more accurately as they follow procedures, leading to consistent results. 

Commercial Cannabis Regulatory Compliance Becomes Simpler To Follow

Certain regulatory agencies also require the use of SOPs to see that your company is following a prescribed procedure and adhering to specific safety guidelines. Many cannabis growers tailor their SOPs to comply with the standards of Good Manufacturing Practices (GMP). 

As you grow and scale your operation and cross state lines, documented compliance allows for higher acceptance rates regarding conditional use permits and business licenses. As it is an applicant’s responsibility to provide compliance documentation in a timely manner, SOPs set you up for success. Businesses in the cannabis world that fall short of compliance requirements can find themselves fined and shut down quickly. SOPs are one of the many tools at your disposal to help you avoid compliance-related issues. 

Planning Allows For Effective New Staff Training Programs

SOPs can be a great tool to utilize during employee onboarding. When created correctly, standard operating procedures are an information hub for all aspects of your commercial cannabis business model. Employers can use SOPs during onboarding, ensuring that every new employee receives the same standardized information. When new staff has this standardized information to rely on, they will not have to depend on existing team members to answer all of their questions. 

SOPs Often Improve Workplace Safety

When an SOP exists for employees to refer to, the business is more likely to establish a safer workplace experience within the cultivation site. Suppose a cannabis business’s staff member tries to handle a task they were never trained to handle and then gets injured. In this case, the company is not only down an employee, but they could find themself paying for worker’s compensation, medical bills, and legal fees. With an SOP, cannabis companies can provide employees with the information they need to do the job safely. 

Foster A Smooth Commercial Cannabis Operation, Even While You’re Away

With the help of a well-structured SOP, you can rest assured knowing that even when you’re away, your employees have the tools at their disposal needed to ensure cannabis production runs smoothly. SOPs give staff members the knowledge and context they need, allowing them to quickly make informed decisions if they can’t reach business leaders. 

Increase Your ROI And Decrease Unnecessary Spending

SOPs are a tool that can provide many different benefits to your cannabis business, and these benefits ultimately save you money and increase your ROI. This information hub can keep your employees safe and improve onboarding processes, regulatory compliance, cannabis production consistency, and more. All of these improvements can quickly add more cash to your bottom line.

With the help of standard operating procedures (SOPs), growing and scaling your cultivation site is easier than ever. Also, this documentation can be quite helpful if you ever decide to sell your company. When selling a cannabis growing business, a high-quality SOP can ensure prospective buyers that your operation runs smoothly and management powers can change without any issues. 

Commercial Cannabis Facility Type

You can grow cannabis in many different environments, including indoors, outdoors, or inside greenhouses. Your set-up, location, and other factors will vary depending on the facility you plan to use. In order to start your growing operation as quickly as possible, you’ll want to know what type of facility you’re using. After securing a facility, you can quickly determine the supplies and equipment needed to begin your operation.

Cannabis Grow Operation Financing

It takes a considerable amount of money to scale up your business to the level of most commercial cannabis growers. While specific financing options like commercial loans are always available, many business developers in the cannabis industry have access to better choices. Now, there are particular loans for cannabis businesses that often have more favorable interest rates. 

Best States For Cultivating Commercial Cannabis

California

California is typically a great state when it comes to growing cannabis. In certain parts of the state of California, rich soil can be great for many different types of agriculture, including cannabis. While in the southern region of the state, temperatures can be very high, the climate in Northern California is typically ideal for cannabis growing. One downfall is that many different commercial cannabis growers are already utilizing the land in California. As the state was one of the first to make recreational cannabis use legal, it is a top-rated growing destination. 

The Tides Are Changing, New Opportunities Are Emerging

Today, the number of people continuing to become more comfortable with the idea of cannabis is growing. As state legislature continues to change, the cannabis industry continues to grow.

There’s no denying that businesses in some states like Colorado, California, and Oregon have had a head start in the cannabis industry. But that doesn’t mean you can’t scale up your cannabis operation either.

Regulations & Laws To Keep in Mind

Understanding the regulatory landscape is vital when planning to scale your marijuana business. The legality of cannabis in the US typically falls into four different categories:

  • Cannabis Is Illegal
  • Cannabis Is Decriminalized
  • Only Medicinal Marijuana Is Legal 
  • Legal To Use Cannabis Recreationally

Because of these differences in state laws, having a detailed understanding of the regulations in your location is vital.

It would be best if you started by researching the state’s ownership and residency requirements for your business. Certain states require you to provide proof of your finances. Sometimes it can be beneficial to have an attorney that can help you understand exactly what the regulatory landscape in your state looks like. 

If there is any chance that you’re interested in moving or expanding your business to a different state, ensuring that you have the knowledge about that state’s regulations is critical. 

Scaling your business where it currently stands is one way to grow, but moving or expanding your business to another location can also be beneficial for many. These two different ways of scaling your cannabis business come with their own challenges. As the government continues to introduce and update legislation and consider federal legalization, capturing market share is vital.

Best States For Scaling A Commercial Cannabis Business

What would be the most appropriate state for you to grow your cannabis business? The answer to this question depends on the kind of business owner that you are. You could expand your cannabis operation into a more established market. You could also compete for one of the few cultivation licenses or conditional use permits that are given to cannabis entrepreneurs in states with newly introduced growing opportunities. Some states allow for licensing applications from anyone within the general public instead of the process being more restricted. The state of Michigan made this application change in 2021. Because of the change, Michigan is now seeing many business owners and entrepreneurs apply. A cultivation license and conditional use permit in Michigan or a similar state could be very beneficial. 

Today, the use of cannabis for those over 21 years of age is legal in more than 18 states. Additionally, more than 30 states have programs for medical marijuana. Already establishing commercial cannabis businesses should take note of these expanding markets. These business owners should also pay attention to states that have cannabis legislation on the table, as they could soon become an additional market. 

Of course, some benefits come from scaling your business in already established markets, for example, California or Washington. In states like California and Washington, which already have established growing operations, cannabis consumers are more informed and aware of the product. Not only are consumers more aware and educated on cannabis, but those markets typically have a higher demand for the product. 

There are different benefits if you’re a business owner looking to move your growing operation to a state that has recently gone legal. You would become more of a power player in that area, considering there are likely fewer competitors. One important thing to remember when moving an operation to a different state is that it takes time for consumers in the area to familiarize themselves with cannabis and embrace a product that people unfairly stigmatized for such a long time. 

Investing a considerable amount of money into commercial cannabis in a location with insufficient demand can be an issue. If there is not enough demand for cannabis, you could easily find yourself in a situation where meeting your business’s yearly objectives becomes nearly impossible. Declining profits in highly-established locations can also create challenges for new operations. But, if you have the money and the time to wait out the initial lack of demand that is common when states go legal, you can quickly establish yourself as a major player in that area. 

Taking Steps Forward

As an already existing business, if you choose to apply for a license or conditional use permit in a state that has recently gone legal, your application is likely to be much better than some of your competitors. If you can present your business model, experience, and growth plans effectively, you have a much higher chance of getting your license or conditional use permit application accepted. The committees that oversee these applications want to see realistic planning and efficient business practices. If they feel your plan to scale your commercial cannabis operation is valuable, you will likely get the necessary licenses. 

Things To Consider When Scaling Cannabis Grow Operations Facility

When business owners are looking to expand to commercial cannabis cultivation, certain aspects of the process can benefit from automation. But it is important to remember that changing too many variables too quickly can be challenging. The more components of your business you can keep constant, the more consistent the quality of your product will be.

Keep your watering schedule similar and check the health of your cannabis plants exactly how you would with a small operation. Some benefits come from automation, but machines shouldn’t replicate certain duties.  

If you are looking to update certain aspects of the way your business operates, typically, these areas are where commercial cannabis cultivation leaders focus:

  • Irrigation 
  • Climate Control and Monitoring 
  • Soil Fertilization 
  • Employee Management 
  • Compliance Processes 

Never Stop Growing

Growing cannabis can sometimes be challenging, but this newly recognized industry only continues to grow. As a player in this “green rush,” ensure that your operation has the tools and resources to grow as well.

FAQ

For serious growers who want the best results from their cultivation efforts, a custom cannabis greenhouse is completely worth it. Rather than renovating an existing space to grow cannabis, you can create a controlled environment commercial facility made to your exact specifications.

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