The cannabis market is currently expanding at approximately 35% CAGR making it one of the fastest-growing opportunities in the last 30 years. The market is also rife with volatility and extreme pricing fluctuations. This makes entry into the direct cannabis-to-consumer market unattractive and fraught with risk. However, supplying best-in-market equipment to automate slow, manual processes and packaging is a unique and significant opportunity.
Unique Market Conditions – USA
-Each facility within a state needs to produce a product for that individual state. This creates a need for significantly more equipment that traditional businesses do not have. Most businesses use equipment to maximum capacity on one – three shifts and ship products to other states or to other countries.
– Since each state is geo-fenced, even MSO’s who operate in several connecting states will need to buy equipment for each state in which they operate.
– This creates a need for significantly more automation and packaging equipment.
– Manufacturing prerolls is a time-consuming process that requires an operator to focus on a repetitive task for 8-10 hours daily. A trained operator can fill, weigh, and crown 300-400 prerolls daily.
– In most emerging cannabis markets, the consumer purchases cannabis based on the highest amount of THC for the lowest price. This quickly creates a race to produce quality products as inexpensively as possible. Automation reduces the cost of labor by over 88%.
Benefits of Automation (Prerolls & Packaging)
– 88%+ reduction in labor cost for prerolls
– Reduction from 16 employees to 2 for 100,000 units monthly
– Knocking joints in a traditional KnockBox create a loss of ~5% of the material.
– A manual fill and crown process typically “overfills” by 5-10%
– Creating a low-cost high-quality product is essential in Cannabis for market share.
– Successful brands from other states will seek out high-quality low-cost manufacturers to create their products and sell into the local market.
Benefits of Leasing Program (Customer)
– Many cannabis companies are cash constrained and cannot purchase equipment for $300-500K.
– Run rate of up to 1,300 units per hour
– Significant labor savings (up to 88%) provide cash flow for automation equipment and provides the customer with significant additional profits.
– One price with no unexpected charges and no significant downtime.
Benefits of Leasing Program (Manufacturer)