Sign up for our daily Newsletter and stay up to date with all the latest news!

Subscribe I am already a subscriber

You are using software which is blocking our advertisements (adblocker).

As we provide the news for free, we are relying on revenues from our banners. So please disable your adblocker and reload the page to continue using this site.
Thanks!

Click here for a guide on disabling your adblocker.

Sign up for our daily Newsletter and stay up to date with all the latest news!

Subscribe I am already a subscriber

US (OH): What vertical integration could mean for cannabis companies

With recreational marijuana legal in Ohio and sales expected to start soon, how will the business of growing, cultivating and selling cannabis shape up? There may be companies that specialize in one aspect. Retailers who do nothing but sell, for example.

But for businesses that can navigate state licensing rules, and have diverse expertise, a seed-to-sale vertical integration model might offer efficiencies, and more profit. At the same time, the model requires more licenses, paperwork and compliance measures, and a company that can operate multiple businesses simultaneously.

Ohio cannabis company Standard Wellness is an example of a vertically-integrated player in Ohio, with dispensaries in Sandusky, Springfield and Cincinnati, along with a cultivation/processing facility in Sandusky County. Standard Wellness Vice President of Revenue Michael Wells said complete self-sufficiency has been the goal since inception, considering compliance costs cut deeply into profit margins and prohibitive IRS rules present other obstacles for companies that aren't self-sufficient.

"We felt we were bringing a unique spin to the industry," Wells said. "In the way we were focused on data, production planning and other details that sometimes get overlooked. We believed we had a specific skill set that would make us stand out in the market by being responsible for all elements of the supply chain."

Read more at ideastream.org

Publication date: