MJBizMag July 2020 - 40

RECESSION ROAD MAP
GETTING IN
FIGHTING SHAPE
Sixteen avenues cannabis executives take to cut costs,
manage creditors and increase profit margins during a recession
By Omar Sacirbey
R
ecessions are a time for cost
control, but they can also herald
opportunity-especially if your
industry proves as resilient as cannabis
appears to be in the current downturn.
Deciding where to cut costs and/or
where to invest in times of economic
uncertainty requires research and careful
consideration as well as the discipline to
rein in expenses and eliminate waste.
These times also demand the foresight
and nimbleness to spot opportunities
and move on them quickly. Identifying
the right investments or costs to cut isn't
easy, so Marijuana Business Magazines
gleaned insights from executives across
the industry and summarized them here.
1
Assess what are
essential costs
and what are not.
Figuring out where to cut costs and
where to invest requires a careful
understanding and assessment of your
business. In other words, what spending
is least important and generates the
lowest return, and what is most essential
and produces the best payback, said
Ted Whitney, CEO of Nug, a vertically
integrated cannabis company in
Alameda, California.
" Going through that exercise, we were
saying, 'All right, so what are we willing
Vertosa saved money on rent by renegotiating its lease while keeping its lab. Courtesy Photo
to cut? What are we willing to not have? "
Whitney said. " It really is communicating
a lot around what's critical. "
" There were times when we said, 'You
know what? That's a critical element
that's going to be part of a new item
launch. I've already purchased $300,000
in packaging, so let's make sure that goes
to completion.' "
Meanwhile, Nug stopped offering
daily lunches for 200 employees. " It was
significant, " Whitney said of the expense.
" But things like that will come back. "
38 Marijuana Business Magazine | July 2020
2
Be ready to delay
state expansion plans.
Some expansion plans are more promising
than others, and executives need to
be ready to part ways with the sexy for
the solid.
That's what Florida-based Jushi Holdings,
a seven-state cannabis company, did
in May, when it canceled a deal to buy an
undisclosed marijuana retailer in San Di

MJBizMag July 2020

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