Wholesale ‘Black Holes’: Avoid These

When processing this years crop beware of value ‘Black Holes’ on the wholesale market. On the Kush Marketplace we see all kinds of products posted at every price imaginable. Check out average prices and statistics on our recent WA Marketplace Analysis. We’ve found a few categories that generally seem to fetch less interest, and lower offers. Beware!

Untested Preroll Material

Probably the most common Black Hole seen in the marketplace is with untested preroll grade trim and popcorn. Buying wholesale preroll material can be tricky because of the varying grades in quality. Everything from machine trim to B buds can be lumped into the same category, and when a buyer doesn’t know what test results to expect, you’ll see low offers.

In most cases untested preroll material wont make it to prerolls, it sells for extraction at a much lower price. If you have it tested you can avoid extraction prices but there’s always the risk of low test results. Untested material will likely receive offers $0.15 – $0.25/g less, worth the cost of testing IF you can get results above the 17% Total THC benchmark.

Tested & Untrimmed Flower

Trimming flower can be a pain, even with automated trimmers. The labor and weight loss will cut at the bottom line, but that’s exactly what the buyers are thinking. If you can fetch a reasonable price for your trim, or use the material for prerolls, then you’ll see a $0.15 – $0.20/g increase in the flowers value now that it’s ‘ready for retail’. The real trick here is to end up with tested trim. We commonly see farms getting flower tested and then doing their final trim as they sell the buds, while making sure to keep the trim attached to the test results. From here you can get top dollar for the tested trim and your flower, increasing overall value by roughly 20% v.s. selling the untrimmed flower at one price. See example below 

  • Scenario #1: 100lbs of tested but untrimmed outdoor flower sells on the high end around .50/g = $22,680
  • Scenario #2: If 25% of the weight was trim / popcorn loss, we’d have 75lbs of trimmed flower that you could potentially sell around .70/g = $23,814. Then 25lbs of trim & popcorn, if tested, could be used for prerolls at a great price to retail, or sold bulk at around .30/g = $3,402. Grand total for the 100lbs at $27,216

After looking at this VERY general scenario you would see an increase of value at about $4,500 for every 100lbs. This gap might not cover hiring an entire crew to facilitate hand trimming, but if you can machine trim the flower at a reasonable labor cost, the 20% increase in value should make a big difference at the end of a large harvest.

Fan / Water Leaf

Nothing tanks a products value better than dark green leaf that contains very little cannabinoids. When looking at any material containing some fan leaf you are probably selling for extraction purposes. Extraction is all about yields and colors, and the fan leaf will effect both. High yielding, 14%+, extraction grade flower this year could earn over $0.30/g, even sold bulk untested and untrimmed. Once an extractor sees any fan leaf their offers will plummet, likely under $0.10/g. This is simply because their quality & yields for extracting will be unpredictable since a portion of the weight is useless plant material. Make sure you buck and remove any large leaves from your trim and extraction flower before selling. You will loose some weight, but you could see a 2x increase in value for the better looking material that you keep.

Low Testing A’s & B’s

And finally one of the most heartbreaking numbers in the industry, test results. We all know that strains are different, and THC isn’t the only cannabinoid, but retailers seem to care about the Total THC number. When you get nice looking trimmed and tested flower that comes in below 15% it’s very hard to move. Some growers will result to split deals with processors, and others will take a large price cut whether through retail or wholesale routes. In a worse case scenario, you could end up selling packagable flower for extraction purposes at roughly 50% less than higher testing lots from the same farm.

Conclusion:

You won’t be able to completely avoid the value ‘Black Holes’ within wholesale. For some, labor costs or low test results may be unavoidable but keep these categories in mind while processing your crop. Think about maximizing your packageable flower while at the same time avoiding pushing weight down into extraction prices.

If you need any help, or have any questions feel free to reach out. We have many growers and experienced farm owners on staff, we can definitely help. Reach out over the site, or give us a call at 206-587-5874.

 

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