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"Economic and competitive forces challenge cannabis cultivators to innovate"

It's no secret that today's cannabis industry is a crowded landscape for growers, with many mid-size and smaller players struggling against the headwinds of price compression. Adding to the difficulties is that the SAFE Banking Act has yet to pass the full U.S. Congress, depriving the industry of a clear financial framework under which to operate. The lack of federal reform, combined with resulting price compression, is creating additional financial constraints for growers seeking capital investments to improve their operations and, more importantly, their product. The primary challenge for many growers these days is to go from merely staying alive in the cannabis industry to truly thriving in it.

"Successful growers realize that growing cannabis is not the way to make a quick buck. It requires a deep understanding of the plant, a desire to produce a superior product, and commitment to nurturing a sophisticated agriculture operation," Dual Draft and Sweet Leaf Madison Capital explain. "Ultimately, it is growing a quality product that will separate the long-term players from the rest, and that requires a laser focus on every aspect of the process, from the genetics of the plant to the curing and packaging of the flower. Growers whose product truly stands out will be insulated from others who try to undercut them on price. But forward-thinking cultivators will understand that it's more than about simply making money; it's about creating a farming legacy to stand the test of time and caring for the people who help you get there."

"Focusing on improvements to yield, quality, consistency, and plant health without increasing operational costs is critical as the market matures," said Ted Harris of Sweet Leaf Madison Capital (SLMC). 

However, many growers find themselves in a difficult position. With wholesale prices falling, inefficiencies in the cultivation process are becoming evident. Operators are capital-constrained at a time when investments in efficiency are critical. This is where financing efficiency comes into play for growers who need to continuously improve their operations. As new technology is released to the controlled environment agriculture market, growers must adopt these advancements to help reduce operational expenses over time. Financing these technology purchases allows the cultivation operator to shift costs from OPEX to CAPEX, resulting in an increased bottom line.

"Newly constructed facilities must implement the most efficient systems possible," adds Harris. "Operators with the resources should invest in efficiency now, while those who lack the capital for improvements should take advantage of financing options for ag-tech solutions."

One of the first areas of improvement for indoor and greenhouse growers is automation, which can help reduce the per-pound production cost, increase growers' confidence in market trends, and ultimately, help them do more with less. "It allows growers to focus their efforts and attention on what really matters – the quality of the product and the environment in which it's grown. And the reality is, much of the older infrastructure presents unique challenges."

Another opportunity to finance ag-tech improvements is when it comes to environmental control. "The simple truth is, producing the highest quality cannabis at the highest possible yields requires an optimal indoor cultivation environment. Investments in LED grow lights, climate control systems, and air filtration systems can all make a substantial difference in the final product. In particular, growers seeking to create a true artisan product are updating their operations to include integrated airflow systems, like the ones made by Dual Draft Integrated Airflow."

Dual Draft's technology is a multi-faceted solution with three modes of activation: Under-canopy airflow, which improves yield, microclimate control which improves quality and consistency, and complete drainage, which improves plant health. Along with helping to create better-growing conditions, Dual Draft's system increases yields without ever raising energy consumption and costs for the operation. "With greater efficiency, higher productivity, and superior product, cultivators can grow their profitability for the long run."

Sweet Leaf Madison Capital and Dual Draft explain that they are founded on placing the highest value on the success of the cannabis industry by supporting cultivators, owners, and operators. This is why they formed a relationship to finance growers looking for solutions that improve their yield, quality, consistency, and plant health, all of which leads to improved profitability. 

"We want those cultivators who are passionate about the plant to be successful," said Harris. "SLMC actively collaborates with companies like Dual Draft to offer financing to operational cultivators, improving their bottom line."

While the cannabis industry faces many challenges, there are legitimate pathways to success for growers who want to be successful for the long term. "Cultivators who treat their crop like an artisan product and focus on quality, care, and expertise can compete and win. Those with the right perspective, automation, and environmental focus can craft a product that gives them a powerful competitive advantage and the foundation for a thriving business."

For more information:
Dual Draft 

Sweet Leaf Madison Capital