Here's How Large Cannabis Companies Can Truly Help the Smaller Players
The costs associated with opening and operating a cannabis business leave little room for R&D for smaller operations. Larger cannabis operators must step up and pass on the knowledge.
In the brief history of legal cannabis, there's been little consideration for where companies source materials and their social and environmental impact. Now that oversight is coming into focus as businesses aspire to meet the progressive desires of consumers and demonstrate good corporate citizenship.
Cannabis consumers especially want greener, cleaner, more eco-friendly operations. But this puts smaller cannabis companies in a predicament. They are juggling regulatory compliances and the up-front investments necessary to get established, leaving too little time and resources to pursue innovative and sustainable practices.
That's where the bigger players can help.
How big companies can help the little guys
As part of a collaborative industry, larger cannabis companies are responsible for the R&D to usher in advancements. More prominent companies can create protocols that yield industry-wide benefits by leveraging capital and flexibility to pursue new policies that improve entire categories.
At the onset of legalization in each state, regulators routinely interview counterparties to learn best practices. Replicating this dialogue at the business level will encourage information exchange and expertise-sharing so that companies of all sizes can catalyze the industry's growth, innovation, and positivity.
There are several ways that larger operators can positively impact their local cannabis marketplaces.
First, we must reduce packaging waste. Product safety requirements result in a gram of cannabis generating 70 grams of packaging waste. The industry produces an estimated 150 million tons of cannabis waste annually.
My company Rev approached this challenge by seeking thoughtful suppliers generating less impact on our environment, which meant investing the time and energy interviewing dozens in each category (e.g., tubes, bags, jars, boxes, etc.).
Nearly all our packaging is now biodegradable, recyclable, or made from post-consumer waste.
Far more complex and illustrative of ongoing research and integration is optimizing downstream products for supply-chain cleanliness. Ethically sourced materials are not yet widespread in the cannabis industry due to the inherent cost and complexity.
For example, edibles account for nearly 20 percent of adult-use cannabis sales in Mass. We considered our top commodities by volume and began researching new suppliers. Atop that list was sugar, which can have little to no traceability when purchased through traditional channels. After an extensive search for a new supplier, Rev discovered Native, a Brazilian company that produces carbon-positive, fair-trade sugar within a regenerative agricultural framework – a world-renowned solution. Identifying a more palatable supplier was just the beginning of this effort.
Rev absorbs the 25-percent increased cost of goods sold – an increment that is unfeasible for many. Beyond costs, integrating any new ingredient requires onerous trials to ensure consistent finished products – another time-intensive investment that many cannabis companies are unable to make.
Protecting the environment
To date, Corporate Social Responsibility efforts have been rightly focused on historic societal damage caused by the failed War On Drugs. Yet, our complex global interdependencies, if not understood, detangled, and reset at our industry's foundation, we will look back with disappointment that we traveled the same slippery slope as other industries who subsidize inexpensive end-products by the pain of global strangers – and degradation of the earth itself.
If cannabis represents love and being one with each other and mother earth, why am I eating edibles made with commodity chocolate – an ingredient known to be rife with child labor, mixed with commodity sugar – an ingredient known to harm our planet in myriad ways starting with slashing and burning forests for fields and harvesting, packaged in a single-use non-recyclable vessel?
These are weighty, complex topics that may not be top of mind for the industry at this time, but failing to take proactive measures is simply kicking the can down the road. In truth, some operators lack the resources and bandwidth to tackle these issues, and that's where larger companies can demonstrate their value.
A marketplace flourishes by the diversity of size and background, but collaboration and shared learnings are critical. Larger companies must use their advantages to innovate and pass along knowledge to smaller operators for shared success. The results are a better, more responsible industry – something we all aspire to achieve.