3 Lessons to Help Cannabis Growers Minimize Risk

Cannabtimes

<![CDATA[“Of all the kinds of men, the farmer is the greatest speculator. He does not think of himself as a gambler, but he lives every day subject to such risks as would give a professional Wall Street operator nervous chills.” Those words were written in an introduction by Rexford G. Tugwell, Under Secretary of Agriculture in 1934, and Professor Harry J. Carman to “Essay Upon Field Husbandry in New England.”As this quote implies, cannabis farmers take the most risk. No logical argument against this statement exists. They bet on each crop, and they often are the last to be paid. There is a certain intelligentsia emerging in cannabis which seems to dismiss farmers as the invisible component of what they fashion as the cannabis business. You will hear statements like “it is just farming,” or, “it is all about brands,” or the dismissive, “Starbucks doesn’t grow their own coffee.” This is the environment in which farmers live.When looking at the current revenue-linked arrangements from farm to bowl, it is apparent that the cannabis supply chain breaks down without a stable and prospering grower community. When the dispensary doesn’t pay the wholesaler, the wholesaler doesn’t pay the farm, and the farmer may not be able to pay its employees and suppliers; in worst-case scenarios, the farm shuts down. Put more simply, if the farmer doesn’t get paid, then the farmer doesn’t grow.Working backwards from the point-of-sale with the customer who innocently buys his eighth for the week, let’s assume a wholesaler provided the dispensary terms for its purchase. A typical arrangement might be Net 30; meaning, upon delivery, the dispensary has 30 days to pay for the product. When 30 days comes and goes, the ripple effect is tremendous. Using a basic understanding of the velocity of money, the more money…

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Source : 3 Lessons to Help Cannabis Growers Minimize Risk

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