Marijuana Business Factbook 2019

269 © 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. Cannabis Testing Labs and Ancillary Firms | Chapter 6 MJBIZDAILY.COM CHART 6.15: Ancillary Technology & Products Companies: Sampling Of Annual Revenue FromCannabis Industry By Type Source: 2019 Marijuana Business Factbook © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Ancillary Technology & Products Companies: Sampling Of Annual Revenue From Cannabis Industry By Type Processing & Extraction Equipment & Supplies Cultivation Structures, Equipment & Installations Cannabis-Specific Software Other Cultivation Supplies Other Ancillary Products $225,000 $250,000 $500,000 $650,000 $1,150,000 Median Two types of ancillary technology and products companies are faring particularly well, with multiple survey respondents indicating their firms earn more than $1 million per year in revenue: companies that supply processing and extraction equipment and supplies as well as businesses that supply cultivation structures, equipment and installations. Processing and extraction equipment is costly to develop and manufacture and may be sold for a high price as well. Extraction equipment serves a critical function in the development of concentrates ― a product category that has become increasingly popular among consumers ― while processing automation, such as machine trimming and pre-roll manufacturing, is rising in use among cultivators and retailers to increase efficiency and reduce staffing costs. Cultivation structures, equipment and installations are also faring well, in part because cultivation serves as the backbone for the rest of the cannabis industry. As with processing and extraction equipment, as the industry grows and competition increases, there is increasing demand for advancements in cultivation to increase efficiencies and reduce costs. Median Ancillary Technology & Products Firms Annual Revenue From Cannabis Industry: Serve Cannabis Industry Only: $350,000 Serve Both Cannabis & Other Industries: $275,000 All Ancillary Services Firms: $325,000 As with ancillary services firms, ancillary technology and products companies that focus solely on cannabis bring in higher revenue than those that work in multiple industries and, again, might benefit from specializing in cannabis-focused technology and products rather than working with multiple industries.