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Here’s what Cannabis 2.0 looks like from a high level… As of this writing, ten states and Washington DC have legalized marijuana for recreational use. 33 states have medical marijuana (MMJ) laws and regulatory structures in place. Sales and tax revenue from cannabis is now well into the billions. Tens of thousands of jobs have been created growing, processing, packaging and selling cannabis products. Sales from ancillary business, consulting firms, state and private utilities are robust and growing. Interstate branding, licensing and franchise operations are spreading to every market. Venture Capital firms announcing multi-million dollar deals are too common these days to make much news. IPO’s of cannabis businesses are imminent and ancillary business are raising tens of millions of dollars to expand into each new state’s market. The former Speaker of the House of Representatives for the United States of America now sits on the advisory board of cannabis venture firm. Cannabis 2.0 is here. Cannabis 2.0 is industrial scale production, commercial operations, and corporate management.

To compete in Cannabis 2.0 operators are going to need no less than bleeding edge genetics, a killer brand and presentation, an aggressive sales force, a modern cultivation environment with documented SOP’s and KPI’s (if you don’t know what those things are, stop reading this and find out!), and a crystal-clear picture of what is happening in your business.

Back in medical, you were crushing if you had 20 lights and a killer cut of Blue Dream. In the Cannabis 1.0 days, it was enough to have the four fire strains, a good crew of homies, and a warehouse that was running well without powdery mildew. Even at the start of the recreational markets in Washington and Colorado, if you had decent genetics, 100 lights, and a glass jar with a sticker to put your flower in you were in good shape. Those days are gone.

The barriers that kept Corporate America out of cannabis, namely banking and the schedule 1 status of cannabis, are coming down real soon. Corporate Ag, Tobacco, and Food & Bev is building its infrastructure as you read this to enter the cannabis space. It’s an unpopular opinion, but this author believes that cannabis entrepreneurs operating today have 3-6 years to build businesses that can be sold. After that, the big corporate fish are going to eat anyone left in the pond.

Cannabis 2.0 is for business people only. Mom and Pop will still have a place in the Craft sectors of the industry, and for the specialty niche products. A few exceptions might be made for exceptionally beloved brands, but it will be increasingly difficult for smaller shops to compete as economy of scale gives large operators more margin.

This period of the industry is going to be messy. The low hanging fruit of free market share and visibility will be gobbled up much faster in newly legal states, if it even exists at all. We’ll see competition that is fierce and cut-throat. We’re going to see established players unceremoniously forced out of the game, and new faces muscle their way in. It’s already happening in the mature West Coast markets. Cannabis 2.0 has already shut down 30% of all original license holders in Washington and Colorado. As of this writing California had licensed less than 15% of the currently operating MMJ market.

Cannabis 2.0 will be about your data. The consistent production of great flower and oil is now the minimum requirement of a cannabis business. The numbers your garden produces and the way that data is collected, stored and acted on will determine the success of your operation. In a heavily regulated, highly competitive market like cannabis, operators will live and die by the data they can see and act upon.

When every plant needs to be tracked and accounted for, the shops that are operating in full compliance with State traceability will avoid costly fines and punitive shut-downs from the regulatory bodies. As margins get smaller and smaller, the organizations that can track total production costs to the tenth of a penny are the ones who will weather the price wars as brands compete. Cultivators will need the ability to correlate an improved yield with the changes in garden procedures or equipment that happened three months prior.

Set your business up to succeed in Cannabis 2.0 with systems that make sense in your workflow, collect the data that matters, and use that data to make your cannabis business more efficient, productive and profitable!

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Chris Guthrie
Chris is the General Manager of Delta9 Systems, a division of General Data Co. He is an expert in the cannabis industry, having participated in the birth of the cannabis industry in Washington, and has operated one of the first and oldest medical dispensaries in Seattle. For a decade, Chris has participated in the design and managed the construction of dozens of indoor gardens, and has been involved in cultivation, processing, retail operations, as well as industry activism.
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What Was Cannabis 1.0?

Cannabis 1.0 was the brief, shining period between the MMJ days and passage of full recreational use in Washington and Colorado. This first flush of what an industrial cannabis industry could look like showed that legalizing and regulating cannabis had a viable future....