HOW TO COMPETE AS A SMALL FARM IN THE NEW AGE OF CANNABIS
We’ve heard from small cannabis farmers in the recent months who have concerns with where the cannabis industry in California is headed, and where they fit into the new regulated space. This blog is broken up into two sections: Why Stay Small and How to Compete as a Small Farm. We hope this inspires small farmers to stay in the industry and that it provides useful tips on how to do so successfully.
WHY STAY SMALL
Why on earth would I want to stay a small farm if it means competing with all of the major players in the cannabis industry to come? First off, you have more control over your brand, quality, and overall decisions when you’re running a small farm. Secondly, consumers love a good story. As a small business, your story is likely more relatable to the consumer than that of a large corporation. Lastly, small farms are essential to building and maintaining the surrounding community.
CONTROL OF QUALITY AND BRAND/BUSINESS DECISIONS
When discussing high-quality cannabis, consumers in California would likely argue that it should include characteristics such as organic cannabis flowers that are well trimmed (bag appeal), with a strong (loud), unique scent and flavor profile. Large operations require a substantial workforce as well as time-saving shortcuts to meet production numbers and timelines. This often means sacrificing some quality standards to meet the demand.
Nat (Owner of Humboldt Seed Company) offered the example of using a trimming machine versus a hand trimming technique, and how different the quality of the end product (flower) would be as a result. Large operations likely won’t have the manpower or time to trim all of their cannabis by hand, therefore sacrificing some quality standard by using a machine. Small farms can compete with large cannabis by maintaining a higher quality standard because of their ability to pay more attention to their products.
Having control over your branding and business decisions is another major advantage of being a small farm. Investors or large brand teams can often cause friction when decisions need to be made. Growing on a smaller scale also allows everyone involved to diversify their work life. Small growers have the ability to further other passions and forms of work simultaneously. “You don’t need to give up your other passions or ventures in order to compete in this market. There is a large demand, and it will only grow. Just because you don’t fit into this corporate large-scale perception of the cannabis space doesn’t mean you won’t survive.” (Nat, Found of Humboldt Seed Company)
MORE RELATABLE TO YOUR CONSUMER
As a small brand, you have the ability to relate to the consumer on a more personal level. Nat shared that he believes, “There is a future very soon for the small farmer, once the excitement and craze of legal cannabis ‘fizzles’. The larger farms will have less emotional appeal to the consumer. There is just more to say about a small family farm that has been passed down from generation to generation”. California has had a long history of cannabis,
longer than any other state in the nation, so use that to your advantage. All cannabis in California started with small farms, and this speaks to a lot of consumers, remind them of why you are an important part of California’s cannabis legacy.
Small farms tend to be much more attractive for tourism and consumer interest. Very few consumers find it interesting to visit large commercial facilities but would enjoy visiting a small goat farm that produces its own goat cheese products for sale and sampling, that also allows children to pet the goats. It is important to find your niche or edge that helps to drive consumers to your story. Think of how well craft breweries have taken off, especially in California. Many predict that craft cannabis will have a similar trajectory once the novelty of just being able to get cannabis wears off, and people seek something more unique.
ROLE IN COMMUNITY
It is easier for small farms to involve themselves in their surrounding community which benefits both your neighbors and your business. Small business owners often contribute to local government, community outreach, community service, fundraising, etc. Taking on a role in local government, such as city council or county advisory boards, is important for maintaining a voice on issues relating to your business as well as to your community.
Small farms also greatly contribute to local economies, especially when these farms exist in more rural communities. When big investors fund large commercial cannabis operations, the money rarely stays within the community that the farm exists in and often leaves the state altogether. Small farmers are more likely to source their farming equipment and services locally, rather than outsourcing to larger operations outside of the area.
HOW TO COMPETE AS A SMALL FARM
Competing as a small cannabis farm in the new age of cannabis can be intimidating, so with the help of the Humboldt Seed Company, we have put together some guidelines for farmers. For starters, small farms should always differentiate themselves from the larger competition. Share the story and explain the reasoning behind remaining a small farm. As we mentioned previously, there is definitely room for craft cannabis in this industry, but farmers need to make sure they understand what they are good at (what makes their product important) and what the rules are surrounding their product of choice. It is also vital for small farmers to collaborate because there is a strength in numbers, but always be selective about choosing partners.
BE UNIQUE – CRAFT CANNABIS
Craft cannabis is likely what will differentiate smaller farmers and cannabis businesses from large commercial cannabis, so it is important to figure out what type of craft product you are going to produce. Some ideas include unique strains/cultivars, breeding your own new genetics, bringing back old strains to market, creating cannabis products other than flowers with popular genetics, coming up with new ways to package your top shelf, unique cannabis products.
ESTABLISH & DIFFERENTIATE YOUR BRAND
Branding is one of the most important first steps to establish and differentiate your product. With small brands, it may be wise to build your brand around your story, and your brand should tell that story. Immediately decide on a logo, web domain, and product/business name, but make sure it is not a name that is already being used or one that is hard for consumers to understand. A good way to figure out if a name already exists is to do a quick search on the internet and on social media. Nat shared that business owners should consult a trademark lawyer and that sometimes you can even get some free advice from them. Another great way to get advice is to join organizations within the industry, such as California Cannabis Marketing Association who focus their meetings on educating their members on topics relating to marketing consumer products within the cannabis industry.
When establishing a brand it is important to establish a style guide (vibe) that will be reflected on the website, social media pages, and packaging. For example, decide if your vibe is going to be crafty, earthy, edgy, sexy, etc. and then stay consistent on all channels.
Social media is another great way to establish your brand because much of the cannabis industry began on social media since normal consumer marketing and networking tactics were not available to cannabis businesses (some still aren’t). Social media pages should resemble the vibe/style selected for the brand. It is important to use the same social media handle across all social media sites (Facebook, Twitter, Instagram, Snapchat) if possible, to avoid confusing the consumer and to simplify branding. Once you have this social media presence you can increase it through the use of hashtags and “follow for follow” tactics, but it is most important to post content that aligns with your brand and with your consumers’ interests. Here’s a great source for information on social media marketing for small business.
UNDERSTAND YOUR STRENGTHS AND THE RULES AROUND IT
Whether your farm plans on producing flowers, concentrates, edibles, or all of the above, you need to be extremely familiar with the regulations pertaining to your business. First and foremost you need to know what regulations must be implemented to be compliant with California’s cultivation permit. A great resource for this information would be the California Department for Food and Agriculture.
Other great ways to stay on top of important information pertaining to the California State Regulations are to take part in city meetings, attend industry/networking events, follow state/local government social media sites, and set google alerts for articles with relevant keywords such as cannabis, county/local government agency names, cannabis regulation, California cannabis, etc.
There is strength in numbers, and now that we are seeing continued threats from the federal government, the California cannabis industry needs to work together more than ever. When you are a small farm there are two approaches to collaboration that you should consider; horizontal integration and vertical integration.
Horizontal integration would mean working with other farmers/farms who have similar interests as yours. Nat provided the example, True Humboldt, which is a co-op of farms in Humboldt that umbrella themselves under one brand of products. This can save you money on branding, distribution, and sales, as well as offer your farm more political power. There is also the option of co-branding, which would open up opportunities for marketing, promotion, and boosts in credibility. You may consider approaching a larger farm and offering to produce a craft cannabis line for their brand. “Our most successful collaborations are horizontal ones that allow us to share business costs, especially when it comes to licensing, advertising, or branding, and the second most successful are vertically integrated partnerships” (Nat, Founder of Humboldt Seed Company).
Vertically integrated partnerships would mean working with other business types that benefit your business such as a dispensary (to sell your products), a manufacturer (to turn your trim into concentrates), or a distributor (to transport your products). It is important to choose vertically integrated partnerships that align with your brand/vibe, especially when it comes to the dispensary/retail locations you work with. Ask yourself if your target consumer matches their target consumer and if the look and feel of your product is similar to the look and feel of their retail location. As long as your packaging and product is relatable to their customer base it should be an easy sales pitch.
WE ARE HERE FOR YOU
Dark Heart wants to support small farmers in any way we can, whether it be providing information and the tools to success, or by servicing your farm as your clone provider. We are accepting direct order inquiries from farms who are currently permitted by the state of California for cultivation and hope to continue building relationships and collaborations with farmers in California in this new age of cannabis. If you have any questions regarding this blog or our direct ordering process feel free to reach out to us directly at [email protected] and we will do our best to answer all of your questions.