Read the PDF: 20170608-infinity-supercritical-california-cannabis
The California recreational sales has begun. The current strategy is to put up cultivation, and then start extraction after harvest. While this may seem intuitively correct, it is the worst strategy for cash-flow.
Start-up Cultivation Means Delayed Cash-flow
If you start with cultivation, you’re looking at 9 -12 months to begin getting cash-flow (in the process from building the grow-house to mature harvest). The time might be a bit better for pure indoor grow, but still a long time regardless. This means you will need a large amount of initial capital outlay, to build facilities, and during the grow. This is valuable time that can be better utilized.
Start with Extraction of Oil for Cash-flow
The profit-makers out in the Cannabis industry have realized that while you can make money cultivating (which everybody is doing), faster access to cash-flow is from the value-added sector, of running extraction machines to produce live resin, shatter, crumb, concentrates for edibles, and vape- pen oil.
Don’t have your own Cannabis product ? Then check with your state regulations and purchase trim or other products from producers who do not have extraction facilities, and then work the value-added space. $50 a pound trim has the potential to get you more than $200 of oil extract. That’s a minimum of four times the value of the trim, and great cash-flow. Of course you will still need to look into the extraction license and other regulations, but this gets you started faster, and with less capital outlay.
Equity Versus Cash-flow
This type strategy gets you faster cash-flow and the all-important sales. This builds equity faster, and requires less initial capital. Starting with just a licensed extraction facility can provide you with a springboard of capital which you can leverage into your own indoor grow, or expanding extraction machinery and capabilities.