Cultivating Cannabis in Rhode Island Requires Strategy and Luck

A successful cannabis marketplace is determined by how successful its cultivators are. The supply chain is dependent on a good starting point, which is where cultivators come in. If cultivators are struggling, you can bet that processors and dispensaries are feeling that pinch too. So, when we look at a state such as Rhode Island—which is the smallest state geographically at just 1,214 square miles—and see what the licensing process is going to look like, and what the restrictions are for cultivators, you may have some understandable reservations.  

But rest assured, cannabis cultivation success can be found even in the nation’s smallest of states, and in Rhode Island’s case, to be successful requires some strategy and luck. And we at Canna Advisors are happy to offer some strategizing tips.  

Restrictions for Cultivators

As of this writing, there are 60 operational cultivators in Rhode Island. That’s a healthy number given the geographic size and the state’s population—just over 1 million. But let’s dive into these figures a bit more. Of the 60 cultivators, 25 are regarded as Class A cultivators, 20 are Class B, and 15 are Micro. Each of these classes have restrictions not just on canopy size for cannabis growing, but on total area of operational floor space. A Class A cultivator, for instance, can only have a 5,000 square foot operational footprint, a Class B up to 10,000 square feet, and a Micro just 2,500 square feet. Again, this is not flower canopy, this is the entirety of the production area which includes cultivating, storing, drying, curing, and processing.  

 

If each operating cultivator had the maximum square footage allowed, in total that’s just 362,500 square feet of maximum cultivation space. For comparison, this equates to about the size of two average size Costcos. For the entire state.  

 

Suddenly, that doesn’t seem like a whole lot.   

 

And remember, on top of this, there are additional zoning requirements for licensure and operations for cultivators that aren’t applicable to other license types such as dispensaries.  

Mitigating Risk

So what can you do? What should you be doing if you’re an operational cultivator or seeking to open up shop as a cultivator? As it seems, based on all the above information, things might be challenging and even risky. Luckily you can take steps to mitigate risk.  

Step 1:  Choose Your Size Wisely

You want to be in a position where you’re not too small, that the costs don’t justify the total output of product and you don’t want to be too large that you’re spending needlessly on unused space.  

 

Typically we recommend going for a middle-size option for cultivation (based on what past states have offered) but in Rhode Island’s class breakdown and restrictions on square footage for the entire premises, it seems that Class B may be your best option to allow for enough room (again, Class B allows for anywhere from 5,001-10,000 square feet) for business operations and grow space without being too cramped or unable to expand. When in doubt, start smaller and grow as demand increases as opposed to starting too large and having to downsize.   

Step 2:  Carefully Consider Growing Methodology & Technology

Another aspect to consider in mitigating risk is to look at improved growing techniques. Cultivators are far and away the most water and electrical dependent business in a cannabis supply chain and the costs can be much higher than anticipated here. Be sure when investing in lights and irrigation systems that the quality is there and that the practices are managed by a skilled cultivation manager to reduce waste. This can help bring costs down significantly.  

Step 3:  Know Your Community & Partners

Finally, you want to make sure you have strong relationships with current dispensaries and prospective ones as well. With Rhode Island set to issue 24 additional retail licenses for their adult-market later this year, now is the perfect time for cultivators to get a feel on who out there may be interested in pursuing one of these licenses. It is strongly recommended to establish vendor and partnership agreements with new, reputable licensees quickly so to get cannabis and cannabis products out of the soil and onto the shelves.  

Rhode Island’s Cannabis Future

We’re feeling bullish about the state of cannabis in Rhode Island when looking ahead. With 24 new retail licenses set to be issued later this year, which will be a tremendous boon to the state which currently has only seven dispensaries. This exceptional growth will alleviate a lot of pressure and anxiety cultivators have in the state.  

 

And perhaps, you know individuals or businesses who are eager to get into the Rhode Island and seize on this rare licensing opportunity. If that’s the case, don’t hesitate to reach out to Canna Advisors for any and all of your licensing, business planning, financial model, and brand development questions!