Independent Cannabis Brands Flock to Radiant, California's Leading Supply Chain Partner

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Image: Radiant Farm

The cannabis market in California is valued at over $4 billion and the state has long been considered an epicenter for quality and innovation.

Northern California's Emerald Triangle is considered the largest and highest quality cannabis-producing region in the United States with growers cultivating the plant since the 1960s. You can also find quality marijuana in Southern California, with its perpetual sunshine and best-in-class indoor facilities statewide.

But ever since the state legalized adult-use in 2016 and Proposition 64 took effect in 2018, life in the cannabis market has been tough — especially for many legacy operators who have struggled to transition from the shadows of the traditional market to the heavily regulated, capital intensive recreational market.

At Benzinga's virtual Cannabis Capital Conference, Radiant CEO and Co-Founder Aaron Selverston discussed the state of affairs for legacy operators in the new recreational market. Read on to learn why Selverston believes there is a problem with the state's cannabis supply chain and what Radiant Farm is doing for legacy operators to help weed get back to its roots.

Challenges Faced by Legacy Operators

The new recreational market has been challenging for legacy operators who have little to no access to the tools or pools of capital needed to break into the heavily red-taped sector. Selverston discussed a few reasons why this poses a big problem to California's cannabis supply chain.

Loss in Talent

Quality and innovation in California's cannabis market have always been driven by legacy operators because of their multi-generational experience and deep understanding of the product and the consumer. Think of them as the same level of effectiveness as hiring a computer hacker for their underground knowledge to boost your security. 

Ever since Prop 64 took effect, most of the top talent no longer works in the industry because they couldn't make the transition or are just getting into the market for the first time and don't know how to.

Lack of Domain Expertise with Current Operators

Currently, there are too many operators in cannabis that lack the domain expertise to be able to source, produce and process high-quality products and carry them through the supply chain as the material changes from raw material to consumer packaged goods. This negatively affects the entire supply chain.

Competition from In-House Brands in MSOs

Many talented independent brands that need a supply chain partner look to multi-state operators (MSOs) for support, however, these vertically-integrated MSOs typically have their own in-house brands that will ultimately cannibalize the hard-won traction of independent brands. This is good for MSOs but not for consumers who want variety and quality. Since this market is no different from any other market, this poses a fundamental tension that is not being addressed.

How Radiant is Strengthening the Cannabis Supply Chain

In 2020, many corporate companies found their business models upended by COVID-19. Many of them were already in financial trouble and the pandemic expedited the situation as equity markets tumbled and volatility spiked.

Amid this catastrophe, many legacy brands and operators turned their trust to Radiant, and its distribution division, Cosmic Distribution.

Image: Radiant Farm

Radiant is one of California's fastest-growing, fully-optimized cannabis supply chain management firms. Its senior team has a collective experience of over 70 years in the California cannabis industry.

At its core, Radiant aims to stabilize the cannabis supply chain by giving economic opportunity to the top legacy brands, which, in turn, results in best-in-class products. Legacy operators who are typically wary of new entrants to the market have flocked to Radiant because of the management team's deep history in the industry and a reputation for honesty, integrity and fairness.

"This is a relationship-driven industry, not a transactional one," pointed out Selverston.

The company provides vertically-integrated services to brands — product development, procurement, production, extraction, co-packing and distribution to retail.

Image: Radiant Farm

Currently, Radiant is the single trusted partner to 17 multiaward-winning brands in California. The company owns and operates Cosmic Distribution, which offers statewide distribution to renowned brands including Insane, Ahti Hash, SOG Army, Wonder Extracts, Arcanna, Woodstock, Ridgetop Botanicals, Fleur D'Elite, Madame Munchie, and its own in-house extracts brand, Cosmic.

Today, the company is experiencing explosive growth. It currently distributes these brands to more than 300 retail dispensaries in California, which represents about one-third of the total retail footprint in the state.

Current Scope in California 

Selverston firmly believes that it's a very good time to be getting into the cannabis industry as there's a significant amount of momentum in California. He added that there is virtually zero brand loyalty as the brand concentration in the state is low, which infers that the industry is wide open. And, as long as consumers want variety and quality, California is the place to be.

"There's a lot of buzz about fully vertically-integrated operating MSOs, and for good reason," said Selverston. "On the east coast, the way that the regulatory regimes have been set up, it almost favors a kind of monopolistic regime — which is a bit of an anti-capitalistic, anti-competitive approach to building this industry. Luckily, in California, it's less true, and even on the east coast, these barriers are temporary." Selverston optimistically added, "There's no state cap on retail in California, and we're expecting to see double the number of licenses that are available now in the next year or two. So, the opportunity to bring these talented, award-winning, best-in-class legacy brands to the mainstream is huge."

Next Steps for Radiant

Radiant's vision is to build a global supply chain for cannabis that caters to independent brands and is currently raising capital. Now, the company is opening manufacturing operations to launch its hydrocarbon, ethanol and solventless extraction facility.

"I think anyone looking at the cannabis industry just needs to look at the supply chain," said Selverston. "The growth velocity of the industry as a whole is going o be determined by the strength of the cannabis supply chain, and it's still riddled with problems. If you want to see a company that is doing supply chain right, we're a great company to look at."

The larger vision of Radiant is that by bringing talented legacy brands to the mainstream, the Golden State will continue to hold up as the gold standard for cannabis cultivation and innovation.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.