What’s the future of mass scale marijuana grows?
It seems that the United States is falling behind on the international weed game. With Canada already implementing a legal cannabis framework, and Mexico poised to reveal their plans within the next three months…the future of cannabis seems brighter than ever.
Legal weed isn’t a new concept. We’ve had it around for over 6 years now and with it we’ve seen many innovations within the industry. This has resulted in the way we consume cannabis, the potency of marijuana and the way we grow and distribute it.
From using blockchain technology to track cannabis from seed to sale, to using drones to deliver dime bags…the future is definitely today when it comes to marijuana.
One of the most significant effects of legalization is the impact on retail prices of cannabis. In 2012, a pound of weed could easily cost a dispensary a few thousand dollars. In 2018, a good pound of bud can cost you anywhere between $ 500-$ 1000 depending on the state you buy it in. The increase of production on a legal scale, coupled with more supply directly impacted retail prices benefitting the consumer’s bottom end.
But what are the main driving factors that are lowering the price per weed. One could argue that the biggest factor to lowering weed prices are directly linked to the reduction of costs in cultivation.
The Canada Model
Unlike the U.S, Canada has a legal cannabis framework on a federal level. This means that there is absolutely no risk in federal retribution if a company simply follows the rules within the Canadian marketplace.
This has resulted in large scale grow operations that are quickly becoming the blueprints for the future of all mass-scale grows internationally. What do these grows look like you ask?
Before we answer that, we need to take a closer look at what makes most grows so expensive, resulting in the increase of price per gram.
Roughly 70% of costs, when it comes to growing marijuana, is directly linked with electricity consumption. Most indoors grows in the United States relies on hefty light systems, ventilation systems, climate control systems and much more.
As you can imagine, these systems draw a lot of power and in turn increases the price per gram. Government sanctioned grows in Canada do not have the same limitations in terms of growing as US farms.
For instance, depending on the state you are in, some grow houses need to be covered from public viewing. This forces the grow to go indoors and implement the power-sucking systems to keep the crops fresh and crisp.
In Canada, they merged the idea of Outdoor and Indoor cultivation by implementing giant greenhouses. These greenhouses are designed to allow the plants to be ‘sun grown’ yet still remain within a controlled environment, reducing the need for pesticides and the likes.
Since there isn’t a need for high voltage light systems, it reduces the overall costs of cultivation by at least 50%. As a result, the quality of the crop remains top notch while the costs of production is reduced and the consumer is the winner in this equation.
These greenhouses can cultivate all year long making it one of the most efficient ways to cultivate cannabis on a mass scale.
Why Mexico matters in the North American Cannabis Trade
One of the first things that Canada learned right after legalizing recreational use was this; you can never have a thing as too much weed. They started running out of legal weed within the week post legalization.
International Players such as Jamaica has recently shipped off its first shipment of legal weed to Canada, however Jamaica is a small country.
The future of North American Cannabis, including Canada, the United States, and Mexico, will most likely fall on the latter to produce the bulk of the weed consumed in the other two nations. Sure, it won’t happen from the start, but it will definitely eventually shift that way.
Simple; Mexico has a cheap labor force, ideal weather conditions and sits comfortably landlocked to the South of both countries. Whereas Jamaica needs to ship their weed to Canada, Mexico simply needs to truck it up. And once international cannabis trade agreements are set up, it only makes economic sense for Mexico to be the supplier of prime material to the aforementioned nations.
We’re most likely going to see how Mexico will shape their legal recreational marijuana framework sometime early in 2019. We know for certain personal cultivation and consumption will be totally permitted, however we still don’t know whether Mexico will follow the Californian or the Canadian Model when it comes to the national overhaul of marijuana production within its borders.
One thing is certain, we can expect Mega grows to be erected within all three nations over the coming decade and consumers will most likely begin to see weed prices hitting between $ 1-$ 5 per gram irrespective of the country and the quality will probably level out across all three markets.
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