Cultivators looking to supply the growing cannabis concentrates market should focus on premium cannabis genetics.
Today’s cannabis consumers expect high-quality cannabis products, and growers are answering with premium cannabis strains.
The legalization of cannabis in key states such as California, Washington and New Jersey has created a new marketplace for consumer goods. In this modern cannabis marketplace, we are witnessing exponential growth in product diversity, especially in concentrated forms such as oils, soft gel pills, transdermal patches, shatter and vape pen cartridges.
With all of this product variety, today’s cannabis consumer is increasingly more likely to purchase concentrate products over traditional cannabis flower. Arcview Market Research and BDS Analytics dubbed concentrates “the hottest product category in cannabis” in a recent report on the US cannabis market that projects cannabis concentrate sales will pass flower sales by 2022 and reach US$8.4 billion.
The divergence between retail sales of flower and concentrate in the US cannabis market doesn’t have cultivators worried, however. For experienced cultivators with the skills to produce premium flower, this competitive landscape offers an opportunity to rise to the top of what is projected to become a US$20.9 billion market in 2021.
You don’t have to be a master grower to understand that premium-quality flower is necessary to create premium-quality cannabis concentrates. Just as premium grapes are necessary to create the finest wines, so too are premium flowers a necessary input in order to create a quality concentrate product.
“The starting material is the most important factor in determining the end quality of each extraction. A cannabis plant’s genetics are the starting material and hold extreme value for each strain to reach its potential,” said Will Hyde, cannabis strain specialist and co-host of Leafly’s “What Are You Smoking?” podcast.
How cannabis strains influence yield
When it comes to quality cannabis flower, consistency is key. Just like your typical pot aficionado, major cannabis brands with large-scale operations prefer consistent, high-quality flower for their product lines. Those cultivators that can provide top-shelf flower at high yields are expected to outperform the competition in any market despite changing preferences for concentrates over flower.
The effect, potency, aroma, taste and yield that define quality flower are all determined by genetics. “Genetics hold the key to your bud’s effects, flavors, vigor and growth attributes,” said Hyde on his podcast.
“Every strain carries a unique genotype that serves as a blueprint for its growth, as well as a specific phenotype that is influenced by its environmental factors and affects a range of strain attributes like color, smell, structure and potency.”
Selecting the right cannabis strain
Encompassing both recreational and medical consumers across varying demographics and geographic regions, the US cannabis market is as diverse as the country’s population. This diversity of consumer preferences calls for a variety of cannabis profiles, each specifically designed to target a wide range of consumer preferences for potency, flavor, aroma and effects. While cannabis genetics research is limited, to date more than 25,000 different genes have been identified in the cannabis plant. Crafting experiences for recreational consumers and delivering relief to medical consumers requires the ability to purposefully select for certain terpenes, cannabinoids and flavonoids within that profile.
The art of cannabis genetic selection isn’t an art at all, but a science that starts at the molecular level. Nicholas Zitelli, AKA Nico Escondido, co-owner and chief cannabis officer at HIGH TIMES, has become one of the leading cannabis genetics experts in the industry. Zitelli is also the founder and CEO of the Amsterdam-based Cannabis Genetics Institute, which focuses its research and development on the breeding of ailment-specific medicinal cannabis strains.
While most cannabis consumers have heard about the effects of well-known cannabinoids like THC and CBD, there are more than 100 other cannabinoids in the plant. According to Zitelli, one of those cannabinoids, THCV, has significant medical potential. “THCV has been found to reduce anxiety, stress and panic attacks, making it an effective treatment in PTSD. Additionally, it is known to alleviate tremors and aid in motor control skills, making it a possible treatment for MS and Parkinson’s Disease.”
The unique properties of THCV could aid in the creation of a pharmaceutical product treating conditions like PTSD, MS or Parkinson’s disease. While most cannabis strains are known to stimulate appetite, THCV has also recently been shown to act as a strong appetite suppressant, meaning it could help users who struggle with overeating.
Adding to the complexity of selecting the right strain to meet consumer needs, the large variety of terpenes responsible for flavor and aroma can have a strong influence on the type of “high” recreational users experience. “Terpenes that are most common in cannabis, such as myrcene, limonene, pinene, humulene and terpinolene, all have their own sets of medicinal values, have been used by humans for centuries and are easily derived from many other plants as well as cannabis. The various combinations when added together, and in conjunction with cannabinoids, can produce feelings of euphoria, energy, relaxation and hunger,” said Zitelli.
Strategically minded cannabis producers have recognized the importance of genetics management and are stacking their teams with experts whose in-depth understanding of cannabis genetics can bring significant value to their cultivation programs.
Chemistree Technology (CSE:CHM,OTCQB:CHMJF) welcomed Zitelli to its board of directors in April. The same month, the company appointed one of the world’s foremost experts on commercial cannabis cultivation, Sheldon Aberman, to the position of chief cannabis officer. Aberman’s decades of cannabis industry experience include managing and designing thousands of grows worldwide. He’s also built several multimillion-dollar brands, including Quantum Horticulture, Pure Essentials Black Label and Cannabis Consulting. Chemistree’s asset portfolio includes a 50 percent interest in a cannabis processing company in Humboldt County, California; prospective cannabis cultivation lands in Desert Hot Springs, California; a strategic investment in Canada-based Pasha Brands; and operational assets and branding rights for the Washington-based Sugarleaf brand. Sugarleaf produces 18 unique high-quality cannabis strains, such as Cannabis Cup winner White 99, a 50/50 hybrid that boasts a THC level of 36.6 percent.
Canopy Growth (NYSE:CGC,TSX:WEED), the world’s largest legal cannabis producer, is also taking on genetics management. “You can get more yield off of a plant if you can refine the genetics and that allows us to have more grams, more kilograms coming out of this place per year,” said Jordan Sinclair, Canopy Growth’s vice president of communications, during an interview at the company’s Tweed Farms operation. Beyond higher yields, a strong focus on genetics could also enable companies like Canopy and Chemistree to develop new proprietary strains as plants with quality genes are bred with one another to create new varieties.
Whether for medical or recreational use, cannabis consumers in the legal markets expect consistency and quality. As a necessary input for concentrate products like tinctures and oils, high-quality cannabis strains are expected to remain in high demand as consumers embrace new concentrate products. For licensed producers focusing on cultivation, quality genetics could provide the difference in a highly competitive marketplace.
This article was originally published by the Investing News Network in June 2019.
This INNSpired article was written according to INN editorial standards to educate investors.
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