When you own the supply chain, you can take a more extreme cost cutting approach to drive down costs to either keep your margins healthy and consistent or drop them in relation to the internal costs. In some extreme cases, these operators are willing to undercut their competitors to attract customers and build brand loyalty, often leading to slashing margins even further.
Competition continues to heat up with many operators looking to catch market leader Trulieve. According to the OMMU or the Official Medical Marijuana Use, Trulieve has 91 dispensing locations, that is 15% more than the next two largest operators Florida COMBINED (Liberty Healthy Sciences 40 locations and Surterra Wellness 39 locations). That is a massive advantage in a key battleground state. Challenging the current market leader, who has a stranglehold on the market, requires aggressive marketing tactics. Just the sheer number of dispensaries will keep Trulieve out in front of the competition based on customer proximity. As competition heats up in this battleground, margin consolidation will likely occur which does ultimately benefit the end customer. The important part is to consider the quality of the product and to optimize those margins with technology.
Last month at MJBIZCON, 8th Revolution’s own, Kellan Finney, spoke about optimization of the cannabis industry via Smart Sensors. The conversation centered around the importance of understanding how to maximize your margins through automation as well as keep a consistent, high-quality product that adheres to the highest quality control standards. This technology is a mainstay in other mature industries that manufacture products for their importance of monitoring the process in real time. What does monitoring your process in real-time actually do and how does this apply directly to the cannabinoid space? Being able to monitor your manufacturing facility in real-time allows for endless opportunities to maximize margins. Separation of cannabinoids allows you to recognize when your run is optimal or monitoring potency ensures your products are within anticipated product characteristics to ensure the customer has a repeatable experience.
The ability to understand your true costs, and maximize your extraction run while minimizing your operational costs, whether its consumables or personal, will allow operators to continue to deliver highquality products at competitive margins.
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