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American Cannabis Partners’ Vertically Integrated Business Model Holds It in Good Stead as Global Supply Disruptions Hit the Cannabis Industry
January 3, 2022

American Cannabis Partners’ Vertically Integrated Business Model Holds It in Good Stead as Global Supply Disruptions Hit the Cannabis Industry

  • Global supply chain disruptions are set to spread to the North American cannabis market
  • Supply shortages are already being felt in the manufacture of vaping devices and specialty packaging with rising concerns that these could extend to raw cannabis flower supply
  • American Cannabis Partners has distinguished itself through both a strict focus on a vertically integrated business model as well as through its adherence to unique Jamaican cultivation techniques
  • The company now has plans to expand operations to a third state in 2022 and a fourth state by 2024

A shortage of Nutella and new automobiles, higher gas prices, and delayed deliveries on Christmas presents can all be linked to ongoing and major disruptions in the global supply chain. However, and in a largely unforeseen twist, shortages have now extended to the North American cannabis market. Rolling power outages in China, incessant shipping disruptions and the upcoming Chinese Lunar New Year holiday are increasingly set to play havoc on the global cannabis supply chain. The shortages and resulting impact on cannabis supply has led to a greater premium being placed on vertically integrated producers, with American Cannabis Partners (“ACP”) — a multi-state 100% organic cannabis cultivation company headquartered within Northern California’s Emerald Triangle — a key proponent of the business model.

A recent survey delving into vaporizer use among cannabis consumers in the United States found that 37% of respondents had reported vaping cannabis in the past 30 days, with respondents revealing that they found the experience to be healthier, better tasting, producing better effects, and generally more satisfying in nature (https://ibn.fm/eKiCN). However and in a recent interview with New York-based vaping device manufacturer, Blinc Group, the company’s Chief Executive stated that they were finding increasing supply shortages in six of the 13 components which went into vape hardware, with disruptions and delays set to intensify ahead of the onset of the Lunar New Year holiday (https://ibn.fm/ODmL2).

“I believe this issue will go on at least until the end of May [2022],” stated Blinc Group CEO Dumas de Rauly. “[However] it is not just vape devices. The raw material for the equipment that fills them with cannabis, the LEDs for the grow houses — all of it comes from China.”

The cannabis industry has been shielded from supply-chain woes thus far, largely due to its hyper-local nature. As it is still classed as a Schedule I substance, companies risk legal imbroglios unless they grow and process the plant in the state where it will be sold. While most companies have thus far only suffered from shipping delays on items such as vape cartridges and specialty packaging, they believe it is only a matter of time until shortages start to affect the raw cannabis product itself.

“We’re trying to order ahead — we’re not paying more [yet], but we’re paying up front; also, we’ve begun to source domestic pools of inventory,” said Josh Krane, vice president of operations for 4Front Ventures, a US-based cannabis multi-state operator.

Since its founding in 2018, American Cannabis Partners has sought to establish a foothold in two key U.S. cannabis markets — California and Michigan, through a sustainable, vertically-integrated model. Since inception, the company has acquired 12 cannabis licenses, including 20,000 sq. ft. of cultivation licenses in California and 540,000 sq. ft. of cultivation licenses and one retail license in Michigan. The company currently supplies approximately 80% of its whole flower product to third-party manufacturers and distributors; the remaining 20% is used in the manufacture and sale of its exclusive in-house brand, ZÜK.

In addition to its self-sustaining model, American Cannabis Partners has sought to differentiate its product within an increasingly commoditized cannabis market through the company’s unique adherence to Jamaican cultivation practices, which has led the company to produce some of the most sought-after flowers in the United States. In fact, and following its most recent harvest, ACP revealed that it has already seen its new, patent pending strains marketed under their ZÜK brand, presold for 2021 (https://ibn.fm/QWO7L). (https://ibn.fm/K4ez5).

As a result of its strict focus on acquiring its own real estate and their vertically integrated model, American Cannabis Partners now finds itself in an enviable position to expand into its third U.S. state in 2022 and its fourth in 2024 (https://ibn.fm/GZZoC). (https://ibn.fm/FhwhC). With the U.S. cannabis market set to touch a forecasted annual value of $115 billion by 2030 according to investment bank Piper Sandler (https://ibn.fm/Ygilv), ACP finds itself in an enviable position to grow and develop their business at a time when the rest of the industry finds itself subject to the vagaries of the global supply chain.

For more information, visit the company’s website at www.ACPFarms.com

NOTE TO INVESTORS: The latest news and updates relating to American Cannabis Partners are available in the company’s newsroom at https://ibn.fm/ACP

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