Recently approved state licenses will soon allow over 100 new cannabis cultivation sites to open for business, but they are going to have to fight for construction materials amid ongoing supply chain woes.
“I’m dealing with supply chain like you wouldn’t believe. It is terrible,” said Charlotte Hanna of Rebelle, a cannabis company based in New York, with an adult-use dispensary in western Massachusetts “My HVAC condensers are delayed until May. That is something that is killing our industry.”
Rebelle currently operates an adult-use dispensary in Great Barrington, Mass. Hanna says her company will likely be able to open their manufacturing site this year, but cultivation will likely have to wait.
There are currently 168 provisional license holders for cannabis cultivation in Massachusetts, as of the Jan. 20 meeting of the Cannabis Control Commission. There are 24 final licenses that have been granted, and 71 commence operation orders. Under state regulation, construction for new facilities must be completed before the applicant can move from the provisional to final license stage.
“The supply chain issues are certainly real, and every part of the construction business, outside of cannabis and certainly within cannabis, is seeing it,” said Andy Poticha, CEO of Cannabis Facility Construction. “If you’re looking at HVAC units, depending on what you’re getting, you could be waiting anywhere, up to thirty weeks.”
Hanna said that obtaining HVAC systems for her upcoming manufacturing site was easier, but cultivation sites, with unique needs for exact temperatures for growing and proper air flow are a lot more complicated.
“It’s 10 months to get these things,” she said. “In Massachusetts you can’t grow cannabis without heating and cooling, we’re not California. This is a massive problem.”
Curaleaf, a well-established multistate operator, does not currently have plans to build new sites in Massachusetts. But they are still seeing the same supply chain delays, according to spokesperson Stephanie Cunha.
“This issue hasn’t impacted our existing locations across New England. However we are seeing supply shortages, HVACs, and steel, which have caused delays with construction projects in other states,” she said. “We have eight active construction projects, outside of new stores, and those span the entire country. Steel delays are not specific to a certain region but rather it is a national problem.”
“There is no jurisdiction that is not immune to supply chain issues,” Poticha agreed.
Poticha said that his company has been attempting to address supply chain problems by finding creative alternatives instead, for example, being dead set on a very specific brand and model for an HVAC system.
“The question becomes, how creative can you be?” said Poticha. “If there is another way to, to skin the cat, we’re certainly going to at least look at it.”
Getting creative is particularly important to Poticha, given that there is still no definitive answer if or when the pandemic will end, or how it has permanently changed the economy.
“Who knows when this problem is going to subside?” he asked. “If this is the new normal, you’re going to have to figure out how to navigate the new normal. Otherwise, you’re going to be waiting it out and somebody else is going to figure out what the new normal is and they’re going to beat you to the punch.”
Given the speed at which plants grow, cannabis cultivation requires patience. In Hanna’s case, along with most of the would-be cultivators in Massachusetts, it may require an even greater amount of patience.
“I can’t get cultivation online, maybe this year at all. It’s really devastating. This supply chain issue is no joke.”