Cannabis legalization has exploded across the United States in the last few years and most of the states have legalized cannabis either for medical or recreational use. The industry has already created over 250000 jobs and expected to grow to well over $31 billion in net profit in the US alone by 2021.
With the exponential growth and demand for cannabis products, we are seeing a flurry of medical and recreational marijuana dispensaries popping up everywhere, and everyone wants a piece of the pie.
With the Trump Administration passing the “Hemp Bill” in 2018 he essentially opened up the floodgates for a local hemp industry to flourish, while technically legalizing CBD cultivation, processing and sales nationwide.
Growers and farmers alike are growing fields of cannabis in the hopes of big returns in green! If you are watching the cannabis industry from the sidelines and hoping to get in on the action, read on.
In the following article, we will be discussing the ins and outs of selling your cannabis products to dispensaries.
Difference between hemp and marijuana growing
Both hemp and marijuana are both of the same plant family known as cannabis Sativa .L. Hemp is not psychoactive like marijuana as it does not contain the active ingredient THC ( Tetrahydrocannabinol ), but rather contains vast amounts of non-psychoactive cannabinoid CBD ( Cannabidiol ).
CBD has become very popular in recent years due to several reasons but importantly we are starting to understand and come to terms with the therapeutic and medical benefits of the cannabinoid.
Hemp is usually grown on a much larger scale like it was traditionally farmed in the USA for centuries, outdoors in prepared fields. Typically marijuana (commonly referred to as weed) contains more than 0.3% THC according to government regulation while hemp contains less than 0.3% THC.
Cannabinoids are extracted from the marijuana and hemp plants to make concentrates for use in products for the recreational or medical markets.
Both marijuana growers and hemp farmers would be considered cannabis cultivators. Marijuana growers would either be growing the plant for themselves or growing on a larger scale to supply local medical marijuana dispensaries. Simply put people who grow cannabis are cannabis cultivators.
Professional cannabis cultivators who are licensed and qualified to oversee the growth and production of cannabis for dispensaries. Typically the cannabis is grown in secure greenhouses or warehouses ranging from small-scale to several thousand feet in cultivation floor space.
Even though cannabis is a relatively easy plant to grow, growing quality cannabis is a different story. Responsibilities for cultivators don’t just stop at cultivation and production, but they may include an array of different tasks.
Professional and successful cultivators are experts in cannabis and understand all the details that go into growing and processing a healthy crop.
Since medical marijuana was first legalized in California during 1996 many other states have followed suit. Generally, dispensaries are places you can go and visit to obtain access to the variety of medical marijuana products available from cannabis cultivators.
Dispensaries locations are heavily regulated by law but may be situated in a hospital, doctors office or even a retail shop. These medical dispensaries cater to the needs of medical patients while dispensing marijuana as per doctors recommendations.
You will always have to register with your medical marijuana dispensary before making a purchase.
If you lucky enough to live in a state with recreational cannabis dispensaries you will know they work a little differently. You don’t need a doctors recommendation, you just need to be over 21 to enter and legally purchase recreational marijuana products.
Both recreational and medical dispensaries will offer a wide variety of cannabis products including and not limited to flowers ( bud ), concentrates, edibles ( medibles ), topical treatments, sprays and vape juice.
There is also a 3rd type of dispensary and that is online delivery services. California, for instance, has a lot of online-only delivery services that sell cannabis products online only and deliver directly to clients doors.
Relationship between the Cannabis Cultivator and Dispensary
A grower selling his product is not as clear cut as it sounds. For starters, you will need a license to grow and sell your product. This is largely determined by your state or county laws. This licenses can vary depending on which state you live and which state you intend marketing your product to.
Once you have overcome the legalities and ironed out the roadmap ahead for your grow operation you will need to decide how you are going to sell your product, whether it be for medical or recreational dispenaries.
This is where market research is a good idea before even consider going through the cost of the legalities and all the paperwork. Basic market supply and demand should be researched comprehensively.
At this time, the market is booming with opportunities for growers of cannabis, but you also want to make sure there is a demand for the cannabis product you have in mind.
Dispensaries might be marketing to a target market with specific needs for quality cannabis products. Edibles like gummies and lollipops infused with cannabinoids are the most popular cannabis product across the board.
Thousands of these are sold every day in the USA and it is a fast selling consumable that people love. Cannabis cultivators might see a gap in the market for organic flower or solventless concentrates.
For instance, earlier this year Illinois dispensaries ran out cannabis 6 days into legalization and battled to keep up with the demand for months. This was a huge opportunity for cultivators to make a buck or two.
“We’re still waiting on cultivator deliveries but will serve as many rec customers we can each day till further notice!” the dispensary tweeted on Monday evening.
Marijuana or hemp products sold to medical dispensaries are of a much higher quality than recreational products. But again, each dispensary will have their requirements and preferences for the types of cannabis products they buy for their clients/patients.
Some want organic flowers, specific strains or only AAA+ grade top-shelf!
Knowing the dispensary you are aiming to sell your product to will help you determine your final cannabis products requirements and help you focus on producing a top-quality crop.
How to sell your final product to a cannabis dispensary?
Once you have decided on a product you can supply to a dispensary and possibly established a relationship with them you on your way to success but product development is not as easy as it sounds.
Processing, manufacture, processing, branding and packaging are also parts of the cannabis product development cycle. Obviously, you will have to investigate the legal requirements and regulations before even considering proposing it to your clients.
Your final delivery to the dispensary is what sells your product to them, and finally their client.
Always keep this in mind, as a cannabis cultivator you might not have the resources of a big cannabis corporation, but you do you have the opportunity to outsource your branding and design to other companies who can provide you with a package that stands out from the rest and makes your product look professional.
How much do growers make selling to dispensaries?
Like asking how long is piece of string, although it fluctuates according to the laws, grower’s experience, and location.
The average basic salary for an entry-level grower in the US is anything from $50000 to $100000 but may well be substantially more depending on the factors mentioned above.
What a cannabis cultivator can make from a pound of chronic is also difficult to gauge. A few years ago dispensaries were purchasing cannabis for about $1000 a pound in California.
This has increased over the years and would fluctuate not only in California but also in other states, depending on supply, demand and quality.
Nailing down a set price selling cannabis to dispensaries is impossible to say, but it is a very lucrative and growing market.
How to become a cannabis cultivator?
Having a degree in horticulture or botany can help you on the right path. Maybe you have years of hands-on experience growing vegetables and want to try your hand at another cash crop. All that is stopping is you is will power and a cannabis cultivation license.
Growing cannabis is a lifetime of passion and learning, its no easy task but anyone can learn. If you cant grow a house plant or a small veggie patch maybe cannabis cultivation won’t be your thing and you should reconsider the many other career paths in cannabis.
I hope this article has given you some food for thought whether you are starting out or just looking for some advice on selling cannabis products to dispensaries. The last advice I can give you is to write a business plan that you can use as a roadmap for the development of skills and product.
This will help you visualise the big picture of your task at hand and give you key points that you need to address before, during and after your first delivery to a cannabis dispensary.