In the rapidly-growing cannabis industry, many growers and retailers find their greatest challenge is successfully scaling up to meet demand. The growing pains are exasperated in this industry because there is often considerable investment associated with stretching infrastructure, and funding is not usually quick at hand.
Many North American banks will not offer basic funding services to cannabis entrepreneurs, and this leaves growers and retailers in a quandary as to how to find funding to either establish their businesses or accommodate increasing orders. The customers are there—the need is there—and banks see this, yet they fear the potential risks associated with the unpredictability of legislative shifts, leaving promising companies challenged to find a way to expand facilities in order to grow, produce, and sell more product without financial support.
A primary issue is how to expand growing and manufacturing facilities. Many companies struggle to stretch their facilities’ capabilities, but this is not sustainable. Facilities must be built or expanded in a cost-effective and quick manner in order to keep pace, and while some turn to conventional, one-off construction services, this is not always a timely solution. It can be difficult to meet needs quickly because many construction companies lack understanding of the market, and facility expansion in the cannabis industry in particular often needs to be highly customized.
According to Bruce Granger, Vice President of Business Development at FlexMOD Solutions, “A conventionally built facility could take up to a year to complete,” and companies simply don’t have that luxury in a quick-paced business environment. FlexMOD Solutions was founded in 2014 and is based in Colorado. Its team leveraged decades of cannabis expertise and set out to create a solution that is pre-designed, yet adaptable to industry needs, because, “Speed-to-market is the driving force for growers and investors today.”
FlexMOD designs, engineers, constructs and installs modular solutions, from single grow rooms to commercial-scale facilities, and sets a clear timeline based on the customer’s needs. According to Granger, “Our pre-designed grow facility is built up to 70% faster than conventional one-off construction with up to 20% cost savings, making FlexMOD the obvious choice for getting up and running quickly. With our facilities, growers could generate up to two harvests in the amount of time it would take to build a traditional facility.”
FlexMOD is a company that recognizes the uniqueness of the cannabis space. The company’s founder, Dano Keys, is an entrepreneur and visionary in the industry, with direct experience building and running dispensaries. Addressing the fact that commercial facilities have gone from small operations in garages and basements to fully functioning complexes with intricate lighting and temperature control, its team of engineers and designers have been able to leverage over 20 years of experience in the oil and gas industry as well as deep insight into the cannabis industry’s unique needs to create customized commercial facilities.
Despite state-level exemptions, the fact that cannabis is still illegal to possess or sell at a federal level seems to be the primary challenge to gaining traditional funding in the industry. While many banks fear the risks associated with investing in cannabis businesses, they cannot deny the obvious growth and explosive potential in the industry and are beginning to realize they are missing out on a tipping point of investment.
As legislative barriers break down, funding will become less of an issue. But for those entrepreneurs currently establishing the groundwork for a booming industry of tomorrow, companies that enable cost-effective and efficient solutions for their expansion now are crucial. Solutions like FlexMOD enable today’s cannabis organizations, in response to these potential barriers that could otherwise thwart startups and expansion.
The innovative and adaptable cannabis market participants today will operate leading businesses tomorrow; accordingly, they cannot afford to wait on banks to feel safe. Temporary hurdles may be cleared with industry insight and strong partnerships that other industries should take note of. The cannabis industry can be incredibly self-sustaining. And with more creative and insightful expansion solution providers, such as FlexMOD, and less reliance on traditional funding or solutions, it is possible that the challenges of today may mean an even more solid foundation for the future.