Cannabis In The Deep South: This Mississippi Company Delivers More Bud For The Buck To Medical Marijuana Patients

Mississippi's medical cannabis market is one of the newest in the U.S.

presenting unique challenges and opportunities. Alec Pagliaro, chief revenue officer of Southern Crops, provides insight into the dynamics of this emerging market including types of consumers, setting up operations, product offerings and branding strategies.

The privately-owned Southern Crops aims to offer a unique and engaging retail experience. "We operate six dispensaries and supply over 100 across the state," Pagliaro said. The company's mission is to provide pharmaceutical-grade products and exceptional customer service, reflecting the values Pagliaro honed in his previous roles.

Setting Up Operations In A New Market

Setting up operations in Mississippi involved extensive community engagement and strategic planning. The use of tissue cultures, instead of mother plants, ensures consistent quality and quicker turnaround times, said Pagliaro. "We can harvest every six weeks, which allows us to meet market demand efficiently." 

Their facility spans 200,000 square feet and includes four flower rooms, each capable of holding up to 3,456 plants. "Each harvest can produce approximately 600 pounds of biomass per room, resulting in a potential output of 2,400 pounds per month," he noted. This level of production is strategically managed to align with the state's demand, which is roughly around 2,000 to 2,500 pounds of biomass monthly.

Southern Crops operates with a reduced number of rooms to match market demand but is prepared to scale up quickly if needed. "We have indicators to increase production from two rooms to three or four rooms based on sales trends," Pagliaro said. The facility includes a full processing area with capabilities to process distillate, biomass into oil, and produce gel capsules and blister packs.

Their processing capabilities allow for a diverse product range, including premium vapes and edibles. The facility is equipped with a full kitchen setup, a gel capsule machine, a blister pack machine, and advanced equipment to process cannabis-derived terpenes in-house. "Our setup is designed for efficiency and scalability, ensuring we can meet the needs of the Mississippi market and beyond," Pagliaro said.

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Understanding The Mississippi Market

Pagliaro highlighted that their market share in Mississippi predominantly consists of older adults. "Our consumer base is mainly 55-plus, looking to replace pharmaceuticals with cannabis." This demographic's needs drive the company's focus on education and product curation to ensure customers find the right products for their specific conditions.

Pagliaro said it's important to understand Mississippi's history, which plays a significant role in consumer behavior. "Mississippi being from the South has its own set of unique challenges as a community that cannabis is still overcoming and still breaking into," he explained. "It's still kind of that stigmatization challenge that we have here in Mississippi more so than other states."

Education is a crucial part of Southern Crops' strategy. "Even though it's a brand new medical program for the customers, it's also a brand new medical program and job environment for the workers," Pagliaro said.

Training staff from the ground up to understand and address the specific needs of patients is essential. He stressed the importance of understanding each customer's prior experience with cannabis and their specific goals, whether for pain relief, daily wellness, or recreational use.

Pagliaro also pointed out that the Mississippi market is influenced by the state's economic landscape. "Mississippi is not the richest state. The average income is roughly under $50,000 to $60,000 a year for a household." This economic reality impacts how Southern Crops prices and positions its products to ensure they are affordable for the broader patient base.

Product Offerings And Market Strategy

Southern Crops started with a focus on flowers, vapes and gel capsules. "We aimed to offer high-quality products at affordable prices," Pagliaro said. The initial product offerings were designed to cater to the primary categories that perform well in most markets. "In almost every market, you’re always going to see predominantly 50 to 60% flower mix, about 20 to 30% vape or oil cartridge mixes, and 12 to 20% edible mix," he explained.

The process of selecting products involved understanding the demographics and economic conditions of Mississippi. "We started from the baseline of the average market categories that do the best," he noted. They had to factor in state regulations, which allow patients to buy only six units a week. This influenced their product offerings to ensure they provided the best value within those constraints.

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Southern Crops seeks to cover the largest revenue buckets while catering to the specific needs of their consumer base.

They introduced gel capsules to appeal to older adults accustomed to taking medication in pill form. "We have blister packs in our gel capsules that are amazing for our consumers," he said.

Market feedback played a significant role in refining their offerings. "We have to focus on the best quality and highest percentage output flower as possible," Pagliaro noted. Given the competition, producing high-THC flowers with great bud structure and terpenes became crucial. "Patients right now can walk into a dispensary and hand-select an eighth for over 25% from more than five or six cultivators if they like," he explained.

Their product assortment, which includes approximately 40 to 50 SKUs, was designed to balance quality, affordability, and market demand.

Southern Crops also leverages automation in their processing to maintain cost efficiency. "We relied heavily on automation to maximize our costs to meet the income standards of the Mississippi community," Pagliaro added.

Branding And Future Plans

Leveraging local identity is key to Southern Crops' branding strategy. "We've created brands that resonate with the local culture, like Queen City OG, named after Meridian," Pagliaro said. 

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