Blog: Precision, Compliance and Low Production Cost: Guiding Principles for the Next Decade.
Published 8:11 AM EST, Fri August 25, 2023
With the increased adoption of cannatech, delivering on your "strain promise" will be key to retaining customers.
Compliant breeders will be more attractive to customers, regulators and investors.
As cannabis seeds become a global commodity, competitive COGS will reshape the industry.
The cannabis seed industry is expected to evolve rapidly over the next decade as more countries legalize marijuana for medical and recreational use. The increase in demand will also bring tighter, better-informed regulatory requirements and a more demanding and discerning customer base.
Alphatype is playing the long game. This is how we plan on consolidating our position as a global leader in the cannabis breeding and seed trade:
Obsessing over precision.
One of today’s key trends in the industry is the development of new technologies for breeding and genetic manipulation. This allows breeders to create strains with specific desired traits, such as higher THC levels, a specific terpene profile or greater resistance to pests and diseases. Achieving specific results and being able to consistently deliver on your “strain promise” will be key to retaining customers.
The use of precision farming techniques to optimize crop yields and quality will also become the standard in the cannabis industry. This includes the use of data analytics, machine learning, and software to improve growing conditions and monitor plant health. Growers will demand stable, consistent genetics to fine-tune these automations.
The big disruptor in cannabis breeding will be the consolidation of intellectual property and plant protection standards. By focusing on precision, Alphatype will be better equipped to protect our strains, research and products from being copied or stolen by other breeders.
Investing in compliance.
Compliance is a boring word. In business, compliance usually means annoying speed bumps, unnecessary investments and a deterrent of growth. But in a nascent sector, mastering compliance can be your best ally.
Understanding how to legally and safely produce seeds that meet or exceed regulatory standards will increasingly bring a competitive edge over other breeders who may not be as focused on these areas. Unlocking international trade routes to legally move cannabis seed across borders can be the single most important milestone of an international cannabis breeding company today.
Breeders that are able to demonstrate compliance with industry standards and regulations will also be more attractive to investors, which will translate to increased access to growth capital. Compliance-focused breeders will also be more likely to grow sales quicker, as they will be better prepared to meet the regulatory requirements of different jurisdictions as the cannabis industry expands.
Maintaining a low production cost structure.
By moving our main production center to Bogotá, Colombia, we anticipated an irreversible trend in the global cannabis seed industry: the plunge in wholesale prices. We operate what may be the most cost-efficient cannabis seed production facility in the world, and are iron-clad protected against price pressure going forward. Some European cannabis seed banks are already outsourcing their production to us, and we expect this trend to grow to a point where breeders in high-income countries will be put out of business. This will likely lead to consolidation within the industry.
In conclusion, by focusing on the above, we are confident we will be able to produce higher-quality seed products that meet demand standards, leverage the regulatory landscape in our favor, protect our intellectual property, and present lower COGS than competition, making us a preferred partner for consumers, regulators and investors.
