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How to Determine if it’s Time to Expand Your Cultivation Business Domestically?

Editor's note: This is an excerpt from "From Seed to Success: How to Launch a Great Cannabis Cultivation Business in Record Time" by Ryan Douglas. Douglas is founder of Ryan Douglas Cultivation, a cannabis cultivation consulting firm. He was Master Grower from 2013-2016 for Tweed, Inc., Canada’s largest licensed producer of medical cannabis and the flagship subsidiary of Canopy Growth Corporation. He also has contributed to Cannabis Business Times.

Domestic expansion is the addition of one or more cultivation sites within the same state, province, or country. A cannabis business can expand by building new cultivation assets from scratch, or acquiring existing operations that are fully functional. However, entrepreneurs should determine whether they are legally permitted to expand their business before they establish high hopes for domestically increasing their cultivation footprint.

Do you have permission to expand?

The biggest deciding factor on whether or not to expand a cultivation business should be determined by regulations. If your existing license allows for more than one cultivation site, and you are now in a position to take advantage of that option, initiating an expansion project should be fairly simple. If your current license only allows for one cultivation site per license, expansion won’t be as easy. In this scenario, a cultivation business must either purchase an existing license or submit a new license application. Regulations governing these activities differ by state and country, and some jurisdictions prohibit the transference of licenses between companies.  

Expansion through building more facilities

If you’re considering expansion, then you’ve already been through the start-up process and you recognize the importance of proper land selection and facility design. Review Chapters Four and Five, or consult the site assessment checklist found in the Appendix to help expedite these processes.

Expanding to an additional site should be much faster than starting your first cultivation site. The buildout process will be the same, but the launch should be expedited. You can pull from seasoned personnel and previous experiences to help make the second launch much smoother. You already have protocols in place, and an entire staff trained on your company’s SOPs. You will have genetics that have been grown out several times and refined to varieties that are appropriate for commercial production. You’ll also be able to promote from within—moving lower-level employees up to management positions at the new site.

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