Your seed-to-sale data alone can be very actionable – add financials and you’re golden
Highest weight yield doesn’t always mean the best strain
You may want different strains for different purposes
Some cannabis strains are much better than others
Every grower already knows that some strains perform much better than others. At the same time, cultivations need to grow different strains to maintain product diversity. Depending on the size of your space and your team, some grows focus on as little as 10 strains while others have pursued over 100 strains at the same time.
So what’s the right number of cannabis strains to cultivate and how do you pick which ones to grow? Some groups talk about quality (best smelling, best tasting, best effect, etc.) while others focus on yields (best grams / plant, highest grams / watt, etc.) and others still drive their grows by highest profit. Each of these are valid (and interrelated) considerations, and it’s important to take each of them into account.
As long as your strain strategy isn’t “because Farmer Joe says it’s the bombest bud”, your cultivation data can help answer both questions with extreme precision to align your team and your operation.
Data-driven strain strategies increase yields and profits
Every licensed cultivation in the United States (and many other countries) has to report their cultivation data via a seed-to-sale or track-and-trace software such as METRC. Since you already have this data, it’s a great place to start comparing your strains in a meaningful way.
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One of the easiest places to start is understanding your wet weight, processing loss weight, and sellable product weight for each harvest batch you’ve ever completed. If each batch has a different number of plants, or a different cultivation technique, you will want to “normalize”, or create a standard of comparison, so you can compare apples to apples. This can be done by dividing by the number of plants in a batch, the number of days in the grow cycle, the square footage in a room, or many other metrics.
For example, let’s look at two harvest batches of two different strains in the same room with the same nutrients – Batch A with 10 plants yields 30 pounds of sellable product and Batch B with 5 plants yields 18 pounds. Although Batch A seems like it made more product, Batch B was actually more effective! When we normalize to the plant we can see that Batch A yielded 3 lbs / plant (30 pounds divided by 10 plants) but Batch B yielded 3.6 lbs / plant (18 pounds divided by 5 plants). Since the Batch B strain is so much more productive, you’ll produce more product and earn more money if you grow more of that plant!
If you have different physical locations, or different grow masters, it can be very informative to look at the same strain across locations. Often times, one location has vastly better yields than another location, so you can take those lessons and best practices and apply it across your organization. You may also consider creating bonuses or other incentive structures for your cannabis cultivators based on beating the “average yield” for the plants that they grow.
Starting with normalized yields by strain can be hugely valuable to drive your cannabis strain strategy, and you already have all the data you need!
Moving beyond strain yields for a more comprehensive perspective
Just because a plant produces a lot of weight doesn’t mean it’s always the best plant to grow. It’s often helpful to layer in your laboratory testing data (typically in your seed-to-sale) as well as your financial data to truly distill the best strains for your grow.
With regards to lab data, the first key point is how often a given strain fails a laboratory test. Consider our example of the two strains above – it seems like Strain B with 3.6 lbs / plant was much better than Strain A with 3 lbs / plant. But if Strain B fails 50% of all microbial tests, but Strain A only fails 10% of the time, the effective yield of Strain B falls to 1.8 lbs / plant (because you have to throw away half every time) whereas Strain A only drops to 2.7 lbs / plant. You can quickly see that factoring in the failure rates can make a big change in what plants you’d choose to grow.
The other lab data to consider is the percentage of THC, CBD, and terpenes in your product. If one strain yields much more in any category, you may be able to sell that product for more at retail, or you may need less product in manufacturing to get the same amount of material for your edibles or concentrates. In either case, you can choose the strains that get you more with less when you understand the lab data.
Many times, the most important consideration for a cultivation is how much money you make from any given harvest batch. This is often called your “profit margin” and, simply put, is your how much money you made minus how much money it cost you to grow. This is often written out as Profit = Revenue – Cost. We’ll write about the difference of Gross Profit vs. Net Profit later, and for now it’s enough to know that more profit is almost always better.
The amount of revenue you earn from any given strain can be a factor of many different considerations including your buyer (wholesale, retail, manufacturing), the lab results of that plant, it’s age, market prices, and much more. The costs can be a factor of your nutrients, water, labor, energy bill, capital investments, and much more.
If calculating your profit sound complicated, that’s because it can be! There are many moving parts in every cultivation, and it can be difficult to tease out each component cost and assign it to a specific harvest batch. That’s why we created our Product Cost and Gross Margin modules to help growers that don’t have the time or resources to calculate everything on their own.
Understanding your “Profit / Gram” is arguably the single most important metric for your entire business – the higher your Profit / Gram, the more money you’ll make on every plant you grow.
Start focused and add more cultivation data as you level up
There is A LOT of data in your cultivation, and it can sometimes feel overwhelming to know where to start to optimize your business. Data can be confusing and daunting, and that’s why we’re here to help!
For cannabis cultivators just getting started, we often suggest the identifying these 3 elements in order:
- Effective yields
- Cost per gram
- Revenue per gram
Once you are tracking each of these 3 core components, you can begin to understand what is driving each of those elements and watch your progress as you make changes over time.
For yields, you may start tracking environmental data such as temperature, humidity, pH, electrical conductivity or other environmental cues to appreciate the “why” behind your most and least productive plants, rooms, or facilities. For costs, you may look at your energy data, your nutrients, or your payroll to see how to decrease costs without impacting quality. For revenue, you may consider who you’re selling to and in what quantities to optimize your product allocation for the highest revenue.
The most important thing is to start with a very narrow focus, say just your yields, so you are fully confident in that area before moving on to the next. You can think of these data pieces as building blocks in your grand castle of cultivation excellence, and know that we are here to help you every step of the way.
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