LOS ANGELES, CA / ACCESSWIRE / December 11, 2019 / Despite the billions pouring into the cannabis startup market in 2019, it's often not an easy task to find success. Building infrastructure for a new market is challenging, especially with many regulations still in flux and a faucet of money, growers, distributors, and manufacturers streaming into once entirely remote areas.
Even many hemp farmers, who planned on cashing out on the CBD boom, are now stuck with surpluses of hemp crops that they can't sell. The market inefficiencies across the industry so far are indicative of an emerging market and are expected growing pains as the market converges on equilibrium prices.
"Cannabis investors are now wary about the cultivation space," says Growpacker CEO, Stephen Boyd. "Investors should take notice of the next chapter in the cannabis sector, as it's no longer about just growing the plant or extracting oils."
The cannabis sector has moved from its cultivation roots into a more fluid market, one where innovation is critical.
"We were turned down by multiple investors who thought our business model was too risky; we were told our plans where too out of this world, and that our facility would never reach completion," says Boyd. "But like many entrepreneurs, we muted the noise and kept moving forward no matter the obstacles."
Growpacker, now a leading cannabis turnkey manufacturing, formulation, and distribution firm in California, has raised over US$12 million from investors that saw the company's vision and the management team's emphatic drive to build it from concept to reality.
Growpacker now operates one of California's largest cannabis manufacturing facilities, and has world-class formulation partnerships that allow it to streamline the entire product development process for it's customers – concept to shelf.
Industry Growing Pains & Streamlining Niche Brands
Marijuana may be legal in California, encompassing the largest portion of a $22 billion business, but that doesn't always mean it sits well with everyone.
For example, in Los Angeles, many marijuana farms and facilities have set up shop outside of the city to Desert Hot Springs because of landlord liability concerns, high property values, and excessive overhead costs.
Incidentally, Desert Hot Springs was the first Southern California city to legalize large-scale marijuana cultivation, and as a result, money poured in. The area continues to grow in marijuana infrastructure, but capital allocation has been inefficient with many startup runways depleted before product launch. Signs as early as 2016 pointed to failed businesses and prohibitively high infrastructure costs shuttering many projects in their early stages. And those infrastructure problems are what Boyd was referring to as a cautionary tale for investors.
But those types of stumbles have been precisely where Growpacker has excelled.
Relying on the type of verticalization that is common among early bellwethers of an emerging market, Growpacker has expanded its business model to encompass an Incubator and Accelerator Program, a partnership with the Intercontinental Beverage Company, and proprietary THC-infusion technologies for a variety of products.
Now, the firm operates a sprawling 28,000 sq. ft facility that seems more suited for high-tech consumer packaged goods manufacturing than cannabis. Perhaps, that was their plan all along — to bring cannabis manufacturing into the 21st century with tech-driven formulation, manufacturing, and distribution.
One of the most salient takeaways from Growpacker's success, though, is its emphasis on customization and niche opportunities.
For example, up-and-coming brands can approach Growpacker with a vision for a product, such as a type of edible or beverage. Growpacker, relying on its in-house formulation and infusion experience, then maps out a product pipeline, with streamlined product development, packaging, and distribution, using its vast network in California.
Eventually, the products go live in dispensaries around the state, and startups can circumvent many of the infrastructure problems that plagued early projects in Desert Hot Springs.
But Growpacker is even going further by targeting niche areas with profound upside — like the THC-infused beverage market. "We are leading the charge with our proprietary beverage production processes that solve many of the issues the industry is currently facing," says Boyd.
Their flagship effort? A seed round investment into Ceria Brewing Company, a dealcoholized, THC-infused craft beer company from Blue Moon Beer Creator, Keith Villa.
"THC infused beverages may become the most socially acceptable form of cannabis consumption," says Boyd. "It's a potentially gigantic market opportunity, and as our first official accelerator member, we're excited for the launch of Ceria's Grainwave in California."
Grainwave is the THC-infused Belgian white ale from Ceria, which is pegged for launch in California this December. Backed by the success of Growpacker, Grainwave's California reveal is brimming with potential.
Not many cannabis firms can claim the type of success as Growpacker amid a veritable boom of the cannabis industry. But where many startups stumbled in infrastructure, Growpacker excelled. Now focused on innovation and creativity with THC-infused products, the firm is truly setting an example for progress in an emerging market.
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SOURCE: Growpacker
ReleaseID: 569967
