When considering cannabis grow operations it’s helpful to consider more than the producers and cultivators of the plant. It’s more enticing to only consider these when hearing sales of legal cannabis in the U.S. amounted to nearly $20 billion in 2020. Growers and dispensaries aren’t the only players in the cannabis sector. In fact, when you run the numbers they’re actually only a relatively small chunk of the industry. If you look at the size and scope of the ancillary cannabis market, you may be shocked!
Even though cannabis remains federally illegal, those on the outskirts in the ancillary market avoid any hassle from regulators. Recently it was announced that the TSA will allow CBD on planes. The FDA recently had hearings about CBD being allowed in foods. Needless to say, the laws around cannabis aren’t black and white. The overall legality of cannabis can create confusion unless you’re included in the ancillary market.
Ancillary cannabis markets operate behind the scenes. These are companies involved with the packaging of cannabis products, the provision cash streaming to up-and-coming cannabis businesses, and the development hydroponic technologies for growers. The ancillary market participants don’t have direct involvement with the cannabis plant itself and are typically referred to as “non plant-touching” companies and as a result aren’t subject to the same regulations or legislation that the plant-touching companies are.
Many ancillary product companies are in areas many interested in cannabis wouldn’t even consider. Consider financial consulting and security. As the demand and scale of operations within the cannabis industry continues to grow, companies are beginning to turn to external organizations to handle cash management, logistics, ATM services etc. Companies like Brink’s, the world’s largest cash management firm is involved with transport, logistics and security as their main areas of focus. Brinks entered into a multi-year agreement with one of the biggest players in cannabis – Canopy Growth Corporation. Brinks provides secure transportation and logistics for Canopy Growth both in Ontario, Canada as well as internationally.
EyeChronic is a company who installs cameras into cannabis dispensaries to provide marketing information and WeedMaps provides a forum for cannabis smokers to find dispensaries near them. The number of non “plant-touching” companies involved with cannabis will only grow with increasing legalization and the next few years will be very interesting for the ancillary market. Hydroponics play an important role in the growth of the cannabis industry and without hydroponic technologies cannabis plants can take twice as long to cultivate.
Scotts Miracle-Gro has been around since 1868, when it was founded by a Civil War Veteran. The company began initially as a hardware store in Ohio, which sold weed-free seeds to farmers. Fast forward 150 years, and now Scotts Miracle-Gro is one of the market leaders in hydroponic technology. The biggest move made in the history of Scotts Miracle-Gro occurred in 2018, when the company acquired Sunlight Supply. “Combining Scott’s industry-leading products with Sunlight’s distribution system will benefit consumers in the hydroponic marketplace.
Along with Scotts Miracle-Gro is GrowGen, another industry leader in hydroponic growing technologies within the cannabis space. Started in 2014 in Colorado, GrowGeneration started out by acquiring Pueblo Organics and Hydroponics, which allowed the company to grow into what it is today. GrowGen is now the largest hydroponic supplier in the U.S., with 23 organic centers across 9 states. The company sells soils, lighting technology, pest controls, ventilation and propagation supplies.
KushCo Holdings is an umbrella company which houses a diverse range of subsidiary, ancillary companies specializing in cannabis accessories and supplies. “Kush Supply Co., the nation’s largest and most respected premier producer of vaporizer products, packaging, supplies, and accessories. Kush Energy, a provider of ultra-pure hydrocarbon gases and solvents to the cannabis sector. The Hybrid Creative, a premier creative design agency for cannabis and non-cannabis brands and Koleto Innovations, our research and development arm driving intellectual property development and acquisitions.”
Forty-one of the top 150 ancillary cannabis companies operate in Colorado. So when looking into which companies are the next big buy, don’t just think of the cultivators or the retailers, consider also looking into the ancillary market — the companies in finance, accessories, leasing properties, and any other non-plant-touching market where a lot of sideline action is occurring.
Cannabis Grow Builders has been involved in the emerging legal Cannabis Industry as a builder and developer of grow facilities since 2016. Daniel Stevenson and his team work with Cannabis Entrepreneurs and Solopreneurs to maximize the potential in their business while remaining on the cutting edge of constantly changing governmental regulations. Please reach out to us at 916-933-7333, via e-mail at email@example.com