Marijuana Business Factbook 2019

183 © Copyright 2020, Marijuana Business Daily , a division of Anne Holland Ventures Inc. You may NOT copy this Factbook, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call (720) 213-5992, ext. 1. Financial & Operational Data: Wholesale Cultivators | Chapter 3 MJBIZDAILY.COM CHART 3.02: Wholesale Cultivators Business Expectations For 2019 Source: 2019 Marijuana Business Factbook © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Wholesale Cultivators Business Expectations For 2019 2019: 35 2018: 18 We'll Be Doing A Bit Worse: 4% We'll Be Doing About The Same: 4% Average Number Of Actual Clients In 2018 Vs. Average Number Of Expected Clients In 2019 Overall Business Outlook For The Next 12 Months : 35 We'll Be Doing A Bit Better: 44% Business Will Be Booming: 48% Despite depressed wholesale prices and shrinking profit margins, cultivators remain optimistic. In addition to predicting they would have more clients in 2019 relative to 2018, the vast majority of survey respondents believed their business outlook would improve in 2019. That optimism may be due to: • Favorable regulatory conditions: Regulators have kept a close eye on market imbalances facing cultivators and have instituted or proposed changes to ensure cultivation remains profitable ― particularly small-scale operations. • Improved growing techniques: The 2018 harvest season returned higher yields and increased cannabinoid potency over past seasons, demonstrating that cultivators have improved their methods. • New business models: Cultivators are responding to market conditions and changing consumer demand by devoting a portion of their flower to the extract market ― in some cases reducing their risk by engaging in forward contracts with processors, guaranteeing them a buyer and a set price after harvest. • Rising demand: Although consumer demand is shifting from flower to concentrates, consumers continue to enter the market for cannabis products, and retail sales are still increasing year- over-year in adult-use markets.