5 Practical Tips for Cannabis Operators to Save Costs During a Market Downturn

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The current economic downturn has affected many industries, and the cannabis sector is no exception. High taxes, oversupply, price reduction, and a still-thriving illicit market continue to hurt licensed cannabis operators. Thus, cannabis businesses must adapt to market conditions or risk closure. One way to remain afloat and win over the competition is to implement strategic moves and control costs. 

There’s no one cheat sheet to follow for success, particularly during this market downturn in many state-legal US markets. Businesses must strategize on pivoting and working with the little they have during this inflationary period of high-interest rates and low capital availability.  Being open to R&D and finding new strategies for doing things is the way to go. Every bit of your business should be subject to analysis and change. The only caveat is determining which changes help you cut costs and make your business thrive. 

1. Re-evaluate Utility Costs

You can execute some simple, practical steps to cut costs related to electricity, water, gas, and HVAC. Distributing electricity within your growing facility using digital electricity or direct current (rather than alternating current) enables you to install the energy source for the lights outside the facility. By ridding your grow room’s interior of the heat source, you deflate the budget of removing excess heat, which can save you 5%-10% of your energy bill. 

Moreover, investing in a high-efficient HVAC system can reduce your total energy costs in the long term. Unfortunately, most operators under-appreciate HVAC as an investment in the cannabis space. Paying for high-quality HVAC can save you significant cash and headaches down the line. You might have to make a significant upfront investment, but it will offer cost-saving opportunities continuously.

2. LED Lighting and Other Lighting Solutions

Lighting is one of the most significant operational costs of an indoor or greenhouse. Therefore, finding ways to cut down your lighting expenditure can help you survive the tough economic times. 

Light Emitting Diode (LED) bulbs have recently become popular in the market because they produce very little heat and operate cheaply. They are slim and relatively smaller, which means less footprint in your grow room. Because they put off very little heat, your cannabis plants can be in direct contact with LEDs and not suffer heat burn. Besides the economics of these lights and the little energy they use, you can get tax rebates and incentives, further reducing initial investment and operational costs. 

Another lighting alternative is High-Intensity Discharge (HID) bulbs, which discharge enough light to produce more yields at a fraction of the costs of LEDs – at least up front. They are not only economically viable during the initial purchase, but also widely available. They have adjustable wattage output, allowing growers to lower their power when necessary, saving them a few bucks on energy. Other more economical lighting solutions are ceramic metal halide (CMH) lights, which are cheaper than HID lighting and produce less heat. You’ll spend less on cooling costs to maintain the right temperature. 

3. Labels and Label Printing 

Cannabis labels require printers and producers to adhere to specific rules, regulations, and requirements to legally and safely sell cannabis products. However, label printing is one of the areas of a cannabis operation that offers significant cash. So, how can cannabis businesses adapt to the ever-changing regulations and maximize visual appeal and brand visibility – all while keeping printing costs low?

If you purchase pre-printed or bulk-printed labels from a third-party printer, you understand how expensive (and sometimes wasteful) the process can be. Investing in a digital label printer is a cost-effective and flexible alternative, which allows you to bring the label production process in-house. You’ll be surprised how much money and time you’ll save producing quick, custom cannabis labels. With in-house label printing, you can keep up with the changing market demands while maximizing your ROI. Overall, a digital label printer could be the key to helping you stay ahead of your competition during this inflationary period and for years to come. 

4. Seed-to-Sale ERP Software

As the cannabis industry becomes more regulated, operators increasingly leverage the so-called “seed-to-sale” solutions to ensure compliance and mitigate risks. 

Seed-to-sale software is a platform designed to monitor, manage, and regulate inventory from when the seed is planted, through the harvest, to when the end-product is packaged and sold to the consumer. But a seed-to-sale solution is product-oriented and will only get you as far as compliance and traceability go; it won’t cover the end-to-end business activities. That’s where seed-to-sale ERP comes into play. 

An ERP platform centralizes and unifies your entire cannabis business: manufacturing and production, HR management, inventory management, finance and accounting, sales and distribution, project management, maintenance management, and quality management. 

Besides tracking products through their lifecycle – like seed-to-sale software does – an ERP solution drives business efficiency by automating and optimizing back-end processes. Users can customize everything, from automation and reporting to roles and workflows. Additionally, they can establish custom rules to maintain compliance and control with regulatory requirements and company needs.

The finance department can receive sales orders automatically, while fulfillment teams will receive alerts whenever an order is generated. Finance can easily and quickly close the books simply by accessing the same data and information as other in-house departments: sales, warehouse, retail, etc.

In sum, a seed-to-sale ERP system saves money by alleviating the need for multiple systems and manual processes prone to inaccuracies, inefficiencies, and high maintenance costs. 

5. Extraction Equipment Solutions

Cannabis oils have made a giant splash in the market. That puts pressure on processors to meet the rising demand while keeping operational costs down. That’s only possible if they can find more economical extraction solutions. Cannabis operators who face challenges that increase costs (specifically during post-winterization) use filtration solutions that enable them to improve the extraction process and lower operating costs. 

There are three ways that filtration can save you money when extracting cannabis oils and extracts:

  • Filtration extraction saves a lot of time. That means processors can have more production hours, increasing throughput and revenue.
  • Filtration extraction solutions adhere to Good Manufacturing Practice (GMP), enabling processors to maximize production (and revenue) because of the safety they have against the risk of closure or product recalls.
  • Extractive cannabis oil through filtration allows operators to leverage depth filtration with lenticular modules and lab-grade products, reducing costly human errors and product loss.


Are you finding it difficult to remain in business during market downturns? Perhaps the only ingredient missing in your business strategy is a robust technological solution tailored to your operation. MaxQ Technology is a value-added software vendor, dedicated to helping cannabis operators optimize their operations and achieve their bottom line. Our seasoned and certified developers can help you deploy a robust ERP system to help you generate profits and grow your business. Contact MaxQ Technologies and find out how we can help.

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