With Domestic Farmers Eyeing the Legal Marijuana Cash Crop, Will Companies Like 1-800-Flowers Have to Change Course?| 0
With revenue from legal marijuana sales booming in nearly half of the country, it was only a matter of time before corporate America hit its tipping point and asked, “How can we get involved?”
We’ve already seen food companies market their billboards towards “stoners”, but now there may be a whole new crop of businesses that look to weed for a bump in the bottom line. They may not even have to make the decision themselves, as their supply chains increasingly make the decision for them. Let’s say you’re a food company, and you’ve been working with the same distributor for decades. All of a sudden, they decide they want to add medicated food to the repertoire now that it’s legal in your respective state; do you puff puff pass it on to your customer base, or do you find another distributor and risk higher overhead?
Look at a company like 1-800-Flowers, for instance; while the flower business rakes in a staggering $ 31 billion a year, the possibilities are endless if they add marijuana to their menu. The company has said they don’t have immediate plans to do so, but they know their network of growers is considering all available options. 1-800-Flowers CEO Jim McCann recently spoke on whether his company could shift to 1-800-Weed anytime soon. “There are a few states now, I haven’t seen it impact us yet, but we are concerned because some growers with large greenhouse facilities in California or Colorado or perhaps in Oregon are saying, ‘Is this the best crop I can grow, these flowers for all these florists around the country? Maybe I can switch to cannabis and get ten times on the revenue line.’ That’s a big concern of ours.”
While people will undoubtedly still need flowers, the growers face an enormous decision as they try to get the most bang for their buck acreage-wise. McCann stated that it’s a very real concern for them because the states where it’s legal for people to grow marijuana also happen to be the company’s highest yielding states for flower growth. “We haven’t seen it manifest itself yet, but a lot of people are on the precipice of making a decision,” McCann said. “The only places that we know of are legal states, so that’s where we’re seeing it but they also happen to be our best flower producing states.” If their network of growers eventually changes their crop of choice, it would force the company’s hand. They’d either have to look elsewhere for flower production, most likely overseas, or adapt right alongside their growers. Whether this would mean offering cannabis delivery, or more of a curated bouquet-style mix of weed and traditional flowers is still unknown. What is known, is that if 1-800-Flowers doesn’t run with that idea someone else surely will, and there will be growers ready and willing to supply them with the product.
It doesn’t sound like the company is eyeing a shift to legal marijuana distribution anytime soon, as they’re still trying to figure out how to keep their farmers growing roses. “That’s a concern we have, so we’re working with them all the time to make sure we do the right analysis. We’re more for rose production than we are for cannabis production.” The next few years will be fascinating as we watch our country’s titans of industry try to weigh outdated morals with the increasingly lucrative amount of money available in legal marijuana. Early estimates show legal weed sales climbing close to $ 7 billion this year, a number that could cast a shadow over the flower industry in less than a decade. Savvy Farmers will be weighing their options in the years to come.
Cover Photo Courtesy of DutchScenery