As Colorado Faces Regional Shortages, Cannabis CEO Says Marijuana Will Eventually Be Traded like Any Other Commodity

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Ryan Fox, founder and chief executive of Denver-based Kindman, says the legal marijuana industry is still evolving, and that current cannabis shortages reflect the sector’s growing pains.

Kindman

Kindman

Some day cannabis will be traded just like every other commodity. Just as orange crops and the futures on frozen OJ can be influenced by severe weather, the price of cannabis is susceptible to many variables as well.

Is Colorado’s legal cannabis industry the victim of its own success?

Next month the Centennial State will mark the 18-month milestone of its historic experiment with legal, recreational cannabis sales to adults. And while Colorado’s legal marijuana industry has been successful and has seen rapid growth during that time, it’s also facing some new challenges.

For example, many marijuana retailers in the state are currently facing shortages, especially in the wake of last month’s “420” cannabis celebrations. And part of the problem, according to Ryan Fox, is that much of the industry still isn't thinking of itself as a legitimate, long-term venture.

“Some day cannabis will be traded just like every other commodity,” he says. “Just as orange crops and the futures on frozen OJ can be influenced by severe weather, the price of cannabis is susceptible to many variables as well.”

Fox is the founder and CEO of Kindman cannabis, one of the oldest and largest recreational marijuana growers and distributors in Colorado. Over the past year, he says, his organization produced nearly 20 percent of the recreational cannabis purchased in the state.

With a statewide shortage of cannabis to sale at local dispensaries, Fox has positioned Kindman to be the go-to wholesaler for resupplying the empty shelves.

“I predicted there would be a healthy demand for our more than 20 premium strains when we rolled out our wholesale operations last year,” he says, “but I’m happy to say I overestimated the number of growers that would follow our lead into the wholesale vertical.”

Fox is now in the process of doubling his grow facilities, to keep pace with the growing demand for his Kindman strains.

One major issue the industry struggles with, he believes, is the over-emphasis by dispensary owners on expanding their retail operations; and that coming up with a sustainable, long-term production and supply chain solution has been a costly oversight for some.

But Fox has avoided that issue. “We sat down to strategize and rework our business model a few years ago, in preparation of the upcoming changes we would see here in Colorado for 2014,” he recalls, “and it didn’t take long for us to identify what end of the supply chain we wanted to be on.”

Fox acknowledges that the legal marijuana industry is still in its infancy, and its once-outlaw culture hasn’t yet fully evolved and adapted to current business norms. And he says Colorado, with its well-planned, state-established regulations, is handling that transition better than any other state where recreational marijuana is currently legal.

But he also expects California, where the cannabis culture is strong and where medical marijuana is legal, will have an uphill battle if and when voters there legalize recreational cannabis.

“California is probably going to have the hardest conversion to recreational cannabis of any single state,” observes Fox.

“They have thousands of dispensaries that will most likely be out of compliance the moment those regulatory guidelines are established – and that will likely create additional economic growth due to the large number of ancillary companies formed, just to assist in solving those problems.”

About Kindman

Established in 2009, Kindman provides customers with an unmatched cannabis product – grown in Colorado state-regulated facilities at indoor locations, using a customized process that combines food-grade nutrients and a unique soil mix that brings out the plant's best features. Close attention is paid to product cleanliness, quality, curing and processing.

Since the January 1, 2014 start of legalized sales of recreational cannabis to adults in Colorado, Kindman has provided high-quality marijuana flowers to tens of thousands of customers from over 100 countries.

For more information, visit: http://www.mykindman.com/

Tags: Marijuana, cannabis, dispensary, cannabis business, Colorado, retail, supply chain, shortages, cannabis shortages, investment Ryan Fox, Kindman

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Bruce Kennedy
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