Page 35 - BusinessWest February 6, 2023

Beyond ‘If You Build It, They Will Come’
New Bay State Cannabis Entities Must Revisit Their Plans
BY MEG SANDERS
The local cannabis industry is overflowing with weed.
The Massachusetts Cannabis Control Commission’s open data platform reports 95 cultivators were operational and licensed as of Dec. 8, 2022. Hot on those heels, another 180 provisional licensees are seeking approval that would bring the state up to somewhere around 3.6 million to 4.98 million square feet of canopy for flower cultivation within the Bay State canna- bis market’s roughly 250 cannabis stores.
If your operating and business plan is based on an outlook written for investors in the previous presidential administration, or during the halcyon days of the great green rush of the past, it’s time to face the truth: Massachusetts is well beyond the point of “if you build it, they will come.”
So those Massachusetts cannabis businesses still in the queue or just getting open need to revisit their market overviews for investors and operators. They need to do so today. Not tomor- row, not if a market event happens — right now.
Take a very hard look at what needs to be rethought, or what needs to be immediately addressed, in regard to budgeting, SOPs, and overall market impact strategies for launch — and for long-term survival. Roughly 37% of all cannabis operators in the U.S. are not profitable, and too many businesses are unaware they are launching only to be licensed to lose money and fail.
For Massachusetts, the danger zone is already here.
New Markets = New Consumers
As more retailers and brands emerge online, operators just
now getting their operational licenses are typically doing so using plans they wrote when originally fundraising months or years back, often without taking into account how business plans and projections need to be tweaked, updated, or overhauled in the realities of the Massachusetts cannabis industry in 2023.
Canna Provisions is the ninth-largest independent cannabis company in the Commonwealth, has won multiple ‘Best Dispen- sary’ awards for selection and customer service, and has been named one of the best companies to work for in the nationwide industry. And even we are reworking our plans.
Surviving the current market constriction and correction from the imbalance of supply and demand — something that has hap- pened in other markets that came online, though it arrived faster here in Massachusetts — is a challenge of smart maneuvering and business forecasting. Ultimately, those businesses with clear eyes, that are as responsible with every dollar moving in and out of the business, will be the ones that make it out. That’s also why, to me, 2023 isn’t all doom and gloom, despite the headlines.
Price compression has been on the industry’s collective mind for the past year, which makes it all the more important to cre- ate new strategies at the retail level. Differentiation for brands will come down to matters of quality of product, a consistent and predictable retail experience, and the education level of the consumer.
What we know for sure, as seen from my experience in canna- bis stretching back to the dawn of the legalized market in Colo- rado more than a decade ago, is that, when new markets flanking legalized states come online, it helps everyone in the existing
“Those Massachusetts cannabis businesses still in the queue or just getting open need to revisit their market overviews for investors and operators. They need to do so today. Not tomorrow, not if a market event happens — right now.”
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