Cannabis Growers and COVID-19

As the COVID-19 pandemic continues to negatively impact the American economy, U.S. cannabis growers and cannabis operators have been forced to make significant adjustments to their daily operations and, in some cases, to their business models. Interestingly, this could ultimately have a long-term positive effect on the cannabis industry as marijuana cultivators and cannabis retail businesses continue to come up with creative ways to reduce overall costs, increase productivity, and generate greater profitability.

Cannabis Cultivators & Dispensaries Adjust to Pandemic by Becoming Self-Reliant

While many businesses struggled when states across the country issued stay-at-home orders and imposed mandatory shutdowns of most stores, marijuana retail operators avoided the most serious economic consequences of the pandemic because state governments declared that pot dispensaries were “essential businesses.” This meant that cannabis dispensaries could remain open during the pandemic and continue to sell to customers. Moreover, some pot dispensaries expanded their reach by offering delivery services to consumers who were otherwise stuck at home. Sales of both recreational marijuana and medical marijuana largely remained strong even as other sectors of the U.S. economy cratered.

Additionally, Cannabis growers and distributors responded to the COVID-19 crisis by lowering costs and rethinking the way they do business. For example, instead of using third-party companies to perform necessary maintenance and make on-site improvements at cannabis processing and production facilities, some marijuana cultivators opted for a Do It Yourself (DIY) approach. As a result, these cultivators have stronger brands, are prepared to be more self-reliant going forward, and may be better equipped to remain profitable long after the coronavirus pandemic is over.

Economic Strategies Being Used by Cannabis Growers & Operators

Cannabis operators were proactive about avoiding the effects of the country’s overall economic downturn. Many operators conducted audits of their entire businesses to help them craft new, more economically viable strategies during COVID-19. Some of the resulting strategies included:

  • Using in-house workers to repair machines used in the cultivation process. A lot of marijuana growers have now begun to train workers to make necessary repairs themselves – without needing to hire outside technicians. Also, it is common for marijuana growers to make sure that workers fully understand the different systems used during cannabis cultivation, such as dehumidification and HVAC.
  • Mixing their own chemicals. The costs of chemicals and sanitation supplies are on the rise and production materials are increasingly scarce. So, some cannabis cultivators are opting out of using expensive brand-name products. Instead, the cultivators purchase an active ingredient in the chemical mixture, then source the ingredient directly and mix it in-house.
  • Stricter oversight to ensure no waste by employees. Prior to the pandemic, some pot companies may have been a bit cavalier when it came to conserving resources during the cannabis cultivation process. Now, a lot of cannabis company executives are getting their hands dirty on a daily basis and making sure that workers do not burn through materials or equipment.

Scythian Real Estate Provides Cannabis Investment Opportunities During the Coronavirus Pandemic

The recent news that marijuana is an “essential service” led to a boom in pot sales in many states. Beyond that, the improved business strategies implemented by cannabis cultivators and operators in response to the COVID-19 pandemic bodes well for investors in cannabis in the future. In fact, the cannabis industry offers a unique opportunity for accredited investors looking to strengthen their investment portfolio and secure their economic future right now. One of the best ways to invest in this industry is through cannabis real estate.

Scythian Real Estate is one of the largest privately held real estate companies in the cannabis sector. In addition to partnering with well-capitalized, state-licensed cannabis operators on both sale/leaseback deals and sourcing and acquiring new retail locations, Scythian also provides cannabis investment opportunities to accredited investors. Scythian Real Estate Fund LLC is currently accepting investments for a pipeline of cannabis property acquisitions in Colorado, Pennsylvania, Arkansas, Utah, and other markets in the U.S. where legalized marijuana provides strong investment opportunities. To learn, please contact Scythian Real Estate here.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

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