At the recent Benzinga Cannabis Capital Conference, Lucas Jarzem, founder of Good 2 Grow Solutions and Resell Canna Equipment, shared his analysis of the current cannabis industry from a Canadian viewpoint. Traveling from Canada to participate, Jarzem sought to engage with U.S. executives and explore new packaging solutions that might be transferred to the Canadian market.
Economic Pressures And Strategic Responses
Jarzem discussed the substantial drop in cannabis prices in Canada, noting it as an indicator of the commodity nature of the product.
“We are witnessing a major contraction in cannabis pricing in Canada, similar to what we’ve seen unfold in California. This has opened up avenues for businesses to acquire critical resources at a fraction of the cost,” he explains.
This pricing pressure, exacerbated by high taxes, is leading to a high failure rate among Canadian cannabis companies — a trend also visible in California.
He highlighted how this economic environment creates a surge in available equipment and materials, which are then sold at reduced rates. His companies, Good 2 Grow Solutions, and Resell Canna Equipment thrive in this climate by offering affordable equipment and packaging solutions. By buying equipment from failing companies at reduced prices, his firms help new businesses acquire necessary resources at 30 to 50% below the standard retail price.
Affordable Solutions, Market Adaptations
“Our approach is to turn market challenges into opportunities for new businesses,” Jarzem says. “By securing equipment from failing companies at discounted prices, we provide a lifeline for startups needing to optimize their initial investments.”
Good 2 Grow Solutions specializes in economical packaging options, working closely with manufacturers to ensure low-cost solutions for clients. This strategic focus is about offering products and adapting to market needs where businesses are increasingly sensitive to cost efficiencies due to broader economic contractions.
The Importance of Due Diligence
Jarzem stressed the importance of due diligence, especially in equipment purchase decisions. “I’ve seen too many new ventures falter by overlooking the due diligence on equipment purchases. Learning from others’ mistakes before making significant investments can be the difference between success and failure.”
He shared that missteps in this area are common and costly for startups.
By consulting with industry peers and learning from others’ errors, companies can make informed decisions that safeguard their investments and enhance operational stability.
A Call for Prudence and Preparedness
“Understanding the pitfalls and successes of the market is crucial. We encourage emerging companies to study these patterns diligently as they lay the groundwork for their ventures.”
Concluding his presentation, Jarzem underscored the necessity for upcoming U.S. companies to heed the cautionary tales from the Canadian and Californian markets.
By understanding these precedents, new entrants can better navigate the complexities of the cannabis industry and position themselves for sustainable success.
Cannabis rescheduling seems to be right around the corner. Want to understand what this means for the future of the industry? Hear directly for top executives, investors, and policymakers at the 19th Benzinga Cannabis Capital Conference, coming to Chicago this Oct. 8-9. Get your tickets now before prices surge by following this link.
Image: Dall.e Canada cannabis industry
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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Cannabis rescheduling seems to be right around the corner
Want to understand what this means for the future of the industry?
Hear directly for top executives, investors and policymakers at the Benzinga Cannabis Capital Conference, coming to Chicago this Oct. 8-9.
Get your tickets now before prices surge by following this link.