Marijuana Business Magazine February 2020

Marijuana Business Magazine | February 2020 18 O ne of the most important uses of data in any industry is giving companies a realistic picture of supply and demand. As the locavore movement kicked off around 2005, farmers and food producers took note of market data predicting the consumer trend toward locally produced goods and began placing labels of origin on their products to capture this premium market share. Similarly, when data began to reveal white-hot consumer demand for CBD products in 2019, mainstream retailers from nutrition to footwear jumped on the bandwagon and began stocking CBD products on their shelves. Farmers also took note and began planting hemp in droves. Having a true sense of demand for hemp and its derivatives—notably CBD—can help prevent the kind of widespread overproduction that causes prices to crash. Low prices for hemp biomass could be good news for processors and end users of CBD— but if hemp growers pull back after an oversupply, the response could be underproduction, causing prices to swing in the opposite direction. Again, this could be good news for some: Market volatility will always provide opportunity for speculators (see “Responding to Industry Shifts” on page 20). But for individuals trying to build a sustainable business, mar- ket stability with sustainable growth will be the key to creating lasting brands, jobs and economic success. That’s where publicly funded research can come into play. Farm Funding Mechanisms I started my career as an agricultural economist at the University of Nevada, Reno—the state’s land-grant university—collecting and analyzing survey data on consumer preferences for niche and value-added food products such as organic, local and sustainably produced beef. These so-called “credence attributes” are product characteristics that have value to consumers but cannot be detected through inspection or consumption of the product. The purpose of the research was to determine exactly how and why con- sumers value these credence attrib- utes and howmuch of a premium they were willing to pay for them. Our audi- ence—Nevada’s small-scale farmers and ranchers interested in diversifying their operations—used the information to hone their production, processing, marketing and sales tactics. This research was funded through state dollars and competitive nationwide grants, with the bulk of the findings available to the public at low or no cost. For decades, agriculture producers have worked with public- and private-sector data analysts to collect such information. Groups use this production data to obtain public funding for agriculture projects, with funds designated for farm and community improvements, including infrastructure development, market analyses and education. To be sure, well-capitalized multistate operators and other companies will have the ability to conduct such research in-house. But smaller-scale operators have neither the time, money nor expertise to engage in this type of valuable data collection, which can have significant financial impacts on small operations and, by extension, their communities. Bringing Cannabusiness Into the Future With hemp production now legal in the United States, hemp producers are eligible for some of the same federally sponsored crop and farm insurance programs available for traditional crops. The risk protection afforded by these programs is reliant upon data collected and reported by farmers. Researchers at the U.S. Depart- ment of Agriculture and other organ- izations will use this data to highlight pain points along the hemp supply chain. As areas of weakness are revealed, they will likely be addressed through modified insurance pro- grams and, hopefully, open the door to publicly funded hemp research and education programs. Not only will this benefit hemp producers in the immediate future, it sets the stage for a similar process to occur once all cannabis—including marijuana—is legalized nationwide. And it all starts with data. Maggie Cowee is a data and research analyst for Marijuana Business Magazine. You can reach her at maggiec@ . The Importance of Agricultural Data Trends & Hot Topics | Maggie Cowee