When most people think of commodities, they think of raw materials, such as petroleum, grains, juice, coffee, or cattle. However, any product market can become commoditized if there’s enough competition to eliminate the perception of differentiation.
Let us redefine commodity. A commodity is a product the suppliers cannot differentiate or control the differentiation. For example, if cannabis growers rely on a cultivar/strain held by the breeding companies to differentiate their products, it is not real differentiation. The manufacturers are in the commodity market, and the breeding companies are in the differentiated market. Remember, all agricultural commodities have unique, even patented genomes, so cultivar/strain does not guarantee differentiation.
The harsh reality will become mild if we accept fact and work from there. There are two strategies to cope with commoditization. One is to stay in the commodity market segment and win over efficiency and cost. The other one is to move out of the commodity segment by differentiation.
In the cannabis industry, THC and CDB extract, distillate, and isolate have become commodities.
Tolled solvent extraction service is a commodity too. It will take over more and more in-house extraction.
Tolled solventless extraction is slowly becoming a commodity. The highly efficient continuous extraction technology introduced by Robust Solutions Pro will speed up the process.
The vape pen is a commodity because every feature and benefit of a vape pen are matchable.
As I pointed out in another post, pre-roll will dominate the market in the future. Cannabis giants will grow out of flower milling and pre-roll production if they can
- Fully understand the science and engineering of smoking
- Produce stem-free milled flower
- Mill the flower to the right size distribution consistently
Fill the pre-roll consistently from tip to tip