If the unexpected downturn in cannabis investments tells us anything, it's that nothing in cannabis is a sure bet. Despite the shifts in legalization, cannabis remains an inherently risky business. This ongoing risk, which will likely follow the industry into the foreseeable future, is why many operations start small — but build detailed plans for scaling up as the markets and regulations allow.
Scaling a cultivation enterprise is about hedging bets on a future with better banking legislation, fewer regulatory barriers, and proven technologies. To build an expansion plan into the foundations of the business requires meticulous forecasting, planning, and supportive tech.
It's not just about hiring more people or moving to a new facility; it means working with customized technology that expands as needed, whether as a cultivator, an extractor, or anyone in between. It also means never falling behind on compliance reporting, no matter how large the expansion.
Using Modular Technologies to Scale Cultivation
In 2016, most cultivators were banking on indoor, warehouse cultivation. According to the Cannabis Business Times, approximately 80 percent of cultivation during that year happened inside. But, flash forward to 2020, and those massive investments into novel cultivation technology didn't pay off for every facility. In 2020, the number of indoor facilities has fallen by 20 percent.
Growing indoors is a massive upfront investment in capital expenditures, which is why several manufacturers have popped up to offer a more modular future for indoor cultivation. Modular grow room technology enables companies to start small but work towards expansion without reinventing the wheel. As revenues allow, it's easy to add compatible pieces, whether vegetation, flower, drying, or trim rooms.
Starrco is one such manufacturer, producing modular grow rooms that come together within weeks of design. Each room is easily set up, taken down, and adjusted to suit the cultivator's needs. Their grow rooms are designed for change. As Starrco details, “Our freestanding cannabis grow rooms are revolutionary because they give you the flexibility to quickly respond to the rising demand for cannabis products, or evolving regulations.”
Starrco is just one name in a growing list of manufacturers producing ready-made, scalable, modular pieces for growers and extractors. Cannabox and Portaking are other versions, similarly promising easy expansion and adjustments if and when needed.
Technologies to Make Compliance Easy, No Matter the Size
Starting small, many cannabis companies tackle compliance considerations via manual inputs. It's not uncommon to find supply chain management within Excel sheets, whiteboards, and other highly tedious databases. As a start-up, data input like this is feasible.
But as the facility grows, scaling data entry isn't cost-effective. It also is challenging to keep on top of the growing list of compliance requirements. Scaling supply chain management and compliance reporting requires automated and customized technologies to best suit the specific business's needs.
Backbone is one such supply chain management platform simplifying compliance and other critical reporting like production, yields, and audits. It's a real-time snapshot providing large and small businesses alike a chance to course-correct, make accurate predictions, and capture the big picture through a straightforward dashboard. Importantly, it alleviates the need for manual data entry into compliance software, like METRC, with two-way integration into track-and-trace systems.
Backbone is just one option among many supply chain management platforms helping cannabis companies navigate the increasingly complex bureaucratic nightmare of legal cannabis. Flourish, and Canix are two other examples of supply chain management platforms facilitating easy growth for companies across the sector, such as cultivators, manufacturers, distributors, and retailers. With automated processes and the critical capture of information, these platforms make compliance easy and provide advanced analytics no matter what the business looks like.
Scaling Has to Be Built into the Foundation
In cannabis, starting small doesn't limit the future potential of the business. In fact, with the industry's known risks, it may even help reduce exposure to regulatory and market changes. But, small cultivators face significant growing pains when it comes time to scale up production.
Smart cannabis cultivators plan for growth from day one, incorporating technologies like Starrco's modular grow rooms and Backbone's supply chain management platform into their foundations. Highly customizable and adaptable technologies such as these facilitate a smooth expansion that moves with the business and the shifting regulations. Plus, these technologies make it easy to remain compliant, no matter the trajectory.