California Wildfires Could Impact Cannabis Business Revenue

Back in October, the Northern California wildfires inflicted damage on thousands of acres across the famed vineyards of Napa, Sonoma, and Mendocino. More than 30 large-scale cannabis farms were destroyed, and many more cannabis businesses were affected.

The wildfires took an enormous human and property toll: 42 people dead, more than 100,000 residents displaced, 160,000 acres charred, 8,400 homes and buildings destroyed.

But the burgeoning cannabis industry suffered its own losses, which figure to impact the region’s economy for the year ahead, as well as the cannabis marketing efforts of dispensary owners and vendors.

California Cannabis Businesses Could Take a Revenue Hit

Sonoma County, with its estimated nearly 10,000 privately-owned cannabis gardens, was expected to generate $3.8 million in tax revenue by next year. Now its cannabis revenue will be far less.

What wasn’t completely burnt to the ground was charred by shrouds of ash and smoke that is equally damaging to sensitive buds. The fires struck during harvest time for wine and cannabis, by far the most potentially lucrative season for both industries.

Worse, most of the farmers were prevented from purchasing fire insurance for their businesses. Having likely spent much of their startup funds to prepare for California’s new era of legalization for recreational use, starting in January, they’re saddled with severely damaged crops or none at all.

The first week of October heralded the onset of harvest season, when cannabis farmers begin to trim their plants and dry outdoor crops. They were depending on the sale of those crops to cover the steep costs of new local permits and state licensees to do business, as jurisdictions prepare for California’s cannabis legalization for personal use in January.

According to the California Growers Association, much of that promise went up in smoke because, similar to wine that tastes smoky if exposed to fire smoke, the effects of smoke adversely taint the taste and smell of a crop.

Another potentially longer-lasting woe and long-term cannabis marketing concern: The region’s soil could be contaminated by the fire’s castoff of heavy metals and toxins. Then there’s the fear of mudslides from winter’s rains. The previous year’s monsoons broke the drought and caused flooding throughout Northern California.

Cannabis Concentrates Could Offset Damage

Ever inventive, the growers are reportedly turning to a solution that involves packaging the smoke-exposed cannabis to be used in concentrated form for oils or vape pens. This process of extraction rids some, though not all, of the impurities.

Many cannabis farmers are testing their damaged crops now to determine whether or not it’s worth the expense to clean up the plants for the market. If damaged crops fail quality testing, they are often used to create the distillate used for making concentrates. It’s considered a safe way to salvage a crop.

Cannabis marketing teams will need to concentrate on making quality control as transparent and public as possible moving forward. Purchase increases have been observed immediately after an event that can cause product contamination, either to ‘stock up’ or to support disaster victims, but eventually possible wildfire contamination could affect product sales without effective marketing of good cannabis quality control.

What Cannabis Dispensary Owners Should Do

Companies should look at disasters as opportunities to build closer relationships with customers, and in this case vendors. The focus should always be on building brand goodwill and on strengthening public trust. Many marketing-challenged cannabis businesses have inadvertently given the impression that they are exploiting customers during disasters.

A smart dispensary with a solid cannabis marketing strategy should take the long view, and sacrifice short-term sales and profits to build long-term trust, especially when the industry is as new as cannabis. People never forget those who try to help them, or those that try to take advantage of them.

Companies under the “CannaCraft” brand have donated $50K to wildfire victims, and any medical cannabis patients who were displaced by the fires are eligible to receive free cannabis products. The brand is showing its commitment to the community by taking these actions, and by partnering with dispensaries that will be distributing the free medicine to victims of the fire.

If you are a cannabis business owner who needs help showing commitment to the local community, 4Blooms can step up. As a boutique cannabis marketing agency, we nurture relationships with communities and customers with inbound marketing. You run your dispensary. 4Blooms is your cannabis marketing relief.

Contact us today if you have questions about cannabis marketing and recent industry developments. Like us on Facebook, follow us on Twitter, and check out our Instagram for company news and updates.

2018-10-05T22:25:32+00:00January 10th, 2018|Cannabis Industry News|