Staying a seed ahead of market trends

If you’ve spent any time as a commercial cannabis or hemp grower, you’re likely well versed in the sea of changes that the market is currently experiencing. These shifts in market trends can leave growers apprehensive when it comes to making changes to their existing operation. That said, after taking time to understand the rationale behind market trends, many growers quickly realize that making strategic changes can actually benefit their yield, profitability, and sustainability.

Although anyone can attempt their fate at predicting the future, we prefer a more data-backed approach when it comes to identifying and understanding cannabis market and cultivation trends. That’s why we decided to explain our logic behind current and future market and cultivation forecasts in this month’s post.

Cannabis market trends from a cultivation perspective

As we detailed in a recent post, until recently, growers typically chose to use clonal varieties in their cannabis and hemp operations. However, the tides have turned in this sea of change that the market is experiencing. Previously shunned by some cultivators, seed-grown cannabis was once considered to be a sub-par method of cultivating cannabis and hemp at commercial scale. This was largely due to concerns around uniformity, yield, lack of variety, and the time and labor-intensive task of pheno-hunting — all based on the performance of early legacy seeds.

Regarding pheno-hunting, growers who wished to create new varieties were forced to grow several phenotypes from various seed sources then selecting those that perform the best. This process is one that could quickly become costly in terms of both money and time, as pheno-hunting often takes months or even years. Once an individual plant was selected, additional time and resources were required to propagate and scale the production of the selection. As previously described, this is only one of the reasons that growers historically opted to utilize clones.

Fortunately, a lot has changed with cannabis seeds thanks to advanced breeding techniques and data science. With brands like Phylos offering production ready seeds, growers are rapidly changing the perspective of how they operate. Commercially available, production ready seeds are the latest tool available to growers as we enter the era of cannabis 3.0. These seeds are capable of delivering the genetic uniformity, robustness, performance, and vigor that growers are accustomed to from clonal varieties. Additionally, by removing the burden of costly overhead and labor to maintain mother rooms and reducing pest and disease risk like Hop Latent Viroid (HLVd), production ready seed-grown cannabis has quickly usurped the title of most logical option for commercial growers.

Making cents of the financial impact from seed-grown cannabis

The cultivation benefits of production ready seed systems aren’t the only reason growers are shifting away from clone-grown cannabis. As we outlined in a recent post, there are positive financial impacts that come along with production ready seed systems as well.

By reducing costs associated with the financial burden of budgeting for, building out, and maintaining mother rooms — which can account for up to 25% of a facility’s footprint — growers who opt for production ready seed systems can realize significant cost savings before the first seed has even germinated. Additionally, crops started from seed are more likely to begin free of pests and pathogens, which translates to a lower likelihood of early-stage crop loss. Seed-grown cannabis can reduce associated expenses and improves margins.

If we consider the improved agronomic traits of modern production ready seed systems along with data-backed density trial treatment strategies, growers can expect a positive impact in harvest yield, in addition to input and labor requirements, as well as management considerations.

Along with yield potential, production ready seed systems are ideal for improving the sustainability of an operation. With the growth of resource demand and the associated costs and regulatory restrictions that come along with said demand, taking measures to ensure short and long-term sustainability should be a top priority for commercial growers.

Data supporting the changing cannabis cultivation trends

As growers continue to make the shift from clone-grown cannabis to production ready seed-grown varieties, you may find yourself curious about the trends that led to this change. We have identified several trends that we feel are indicative of the continued migration of growers moving to production ready seed systems.

Pressure on producers to reduce costs - As the cannabis market continues to mature, producers should expect additional emphasis placed on cost management with shrinking margins.

Pressure to reduce specialized labor in lieu of automation - Growers recognize that specialized labor has become a significant percentage of operational costs in addition to the difficulties faced when sourcing specialized skill sets. This, along with the industry-wide push to implement automation practices, means cultivators will continue feeling the pressure to automate various tasks, thus reducing human labor needs.

Industry consolidation will require more standardization - The cannabis industry is currently composed of a patchwork of growers, all with their own standard operating procedures (SOPs). As the industry consolidates under acquisitions, growers will be pressured to merge toward uniform production practices.

Future sustainability requirements - Along with industry consolidation comes the sustainability commitments maintained by parent entities. Cannabis growers who fall under this umbrella will be pressured to improve the efficiency of resource usage to uphold sustainability efforts and expectations.

Need for improved product consistency - Over time, clonal varieties fall victim to genetic drift. Given the typical consumer expectation of brand consistency, growers should recognize that demand for product consistency will only continue to increase.

Rapid ramp-up requirements - As additional states implement legal cannabis programs, producers that can quickly scale-up using production ready seed systems will maintain first-mover advantages, allowing them to establish their footprint in new markets, while capitalizing on peak pricing.

Future grown-at-scale crop forecast - Much like tomatoes, longer-term trend forecasts indicate a shift for cannabis to be a grown-at-scale crop. This typically means that high-value segments are grown in mixed light/indoors while lower value/high volume segments are grown outdoors. 

Continued improvement in direct-to-production seed genetics - As cannabis seed genetics advance, so will their ability to go head-to-head with clonal varieties.

The takeaway

Best practices in commercial cannabis cultivation are undergoing some significant changes — for the better — as technological advances help to improve yield, vigor, and uniformity, while reducing operating costs and environmental impact. As topics like scalability and sustainability become focal points for large-scale operators, those in the cannabis and hemp industry should begin preparing now, for what the future markets will likely dictate.

Future-proofing your cannabis or hemp operation may feel intimidating or unnecessary, but it doesn’t have to be. Thankfully, Phylos’ team of cannabis and hemp cultivation experts are an excellent resource for commercial growers to discuss how modern production ready seed systems can add to the longevity of your operation for generations to come.