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Since the legalization of recreational cannabis in 2016, growing herb here in the Golden State has become increasingly complicated. Compliance costs and competition have increased significantly, while prices for bulk flower have cratered. The relatively idyllic, romanticized lifestyle that family farms enjoyed for decades is being upended quickly. Multibillion-dollar deals are now commonplace in the industry, with major Pharma, tobacco, and beverage players entering the space and staking their claim.

Humboldt County, long recognized as the powerhouse in global cultivation, is now a takeover target. Reports of “distressed outdoor assets” are now being discussed in corporate boardrooms as are strategies to move in, purchase farms on the cheap, and greenwash the Humboldt brand. Our story, which took decades to unfold is at risk of being upended in just a few short years.

To survive and thrive in a new corporate paradigm, family farms need to up their business and cultivation skills. As someone who has engaged dozens of commercial cannabis farmers through my financial consulting platform, it’s become clear that many smaller operations could benefit from professionalizing and formalizing their operations. Doing so can help farmers stay in the game and capitalize on the world’s most rapidly growing industry.

For decades farming cannabis profitably in California was simpler. Because of this, operators never had to bother with many of the business planning functions so common to other industries. Things like business plans, mission and vision statements, target markets, and product diversification weren’t really on the minds of folks operating in the space. One could buy rural land on the cheap, grow tons of decent weed, sell it for high prices, and earn a marvelous living. There was lots of work involved and the risk of incarceration and theft was real, but it didn’t take a rocket scientist to be a successful cultivator. Humboldt, like neighboring communities, minted many millionaires from the mid-nineties onward.

Corporations and investors took notice. Now that billions of dollars are flooding into the industry, competition is fierce and farmers must become astute businesspeople if they want to survive. They must formalize and professionalize their operations to find lasting success. The first step in this process is creating a written business plan to help guide the operation forth with clarity. The second is creating an operations plan that guides day-to-day workflow to control quality, improve outcomes and generate the consistency necessary to build a successful brand.

A business plan doesn’t have to be intimidating. It can be a real joy to create, especially for those who truly love farming cannabis and competing in a growth industry. It’s your chance to be creative and identify how you want to operate and where you want your business to go.

When creating your business plan, you must first describe your company in detail. Things like your vision, mission, and value proposition are included here. What problems are you trying to solve? What market needs are you attempting to meet and why/how can you meet them better than others? What do you hope to achieve with your business, in other words, what is its meaning and purpose?

Your plan should also include market analysis. Many use a SWOT analysis that outlines your specific strengths and weaknesses as well as opportunities and threats facing your company. In the case of cannabis, market analysis should talk about increasing social normalization and competition, changing consumer needs and preferences, product proliferation, price action, and a developing national and global marketplace among other things.

The business plan should also detail your company’s organizational structure. What type of entity are you, a corporation, an LLC? How about the structure in terms of employees, management, and outsourcing of critical business functions like accounting and human resources?

Product focus and marketing/sales are often the bread and butter of the business plan. Are you competing for shelf space with high-end flower, seeking celebrity endorsements, or growing biomass for extractors and other value-added participants in the supply chain? Are you focused on cannabis as a medicinal, lifestyle, or recreational product? How will you get your product to market? What distribution platforms will you use and will they provide acceptable sales velocity and revenue? How does your operation help distributors fulfill the needs of their customers and do you fulfill them better than others?

A natural offshoot from this section of the business plan is financials. Using reasonable figures for production, prices garnered for a product, and a detailed breakdown of costs, how do things pencil out? At what point during the year will you break even? How much must you set aside post-harvest to fund the following season’s operation? How profitable is your business? What changes can be made to improve financial performance?

When complete, you will be proud of the plan created. It will guide your organization forward and can always be adjusted as needed. Once commercial lending finds the cannabis space and as mergers and acquisitions continue in the coming years, having a sound plan and a proven track record of success will show your professionalism and help you stand out from the crowd.

An operations plan is also critical to your ongoing success. This plan should outline your farming process in exceptional detail. Everything you do to create a product, from start to finish, must be written down. This not only helps improve consistency and predictability but also allows you to transfer your knowledge efficiently to workers or potential suitors.

I build a master plan in January of each year that outlines planting and harvest dates, clone dates, farm purchases, and other pertinent information. From that basic blueprint, I create a weekly calendar each Sunday with the necessary action items to keep me on track for the week and the season. I enjoy the process as it clears my head and allows me to farm more confidently than I otherwise would. It is enormously beneficial in terms of dictating workflow, improving efficiency, and creating accountability. Was the work done or not? If not, why not? Calendaring helps avoid distraction and helps prevent overlooking important details. Many farmers are paranoid about documenting their “trade secrets” and workflow, but failing to do so will inhibit your ability to scale or grow your operation. Transferability of your winning systems will help drive enterprise value and will become increasingly valuable in a marketplace dominated by consolidation and M&A.

While somewhat time-consuming, professionalizing and formalizing your operation is a must. Failing to do so will only hasten one’s demise and facilitate the transfer of wealth from your pocket to corporate coffers. As margins continue to compress and as excess profits or economic “rents” are priced out of the cannabis supply chain through increased efficiencies and increased competition, your cultivation business must run like a well-oiled machine. Sound planning, creative marketing, and a laser-like focus on quality and cost control can help your business survive the challenging times ahead. Everyday execution of your plan coupled with love, faith, unwavering commitment, and authenticity will help you win the hearts of consumers and allow you to continue operating in the industry you helped create.

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Jesse Duncan is a lifelong Humboldt County resident, a father of six, a retired financial advisor, and a full-time commercial cannabis grower. He is also the creator of NorCal Financial and Cannabis Consulting, a no-cost platform that helps small farmers improve their cultivation, business, and financial skills. Please check out his blog at, his Instagram at jesse_duncann, and connect with him on Linkedin.