From Trash to Cash: Business Ideas for Seed Breeders
By Paul Josephs and DandH Banks
At one time, Cannabis seeds were an annoyance. They would weigh down a bag and taste just awful when smoked by mistake. Seeds were a waste of money, trash.
Today, however, seeds hold the potential for producing both little green sprouts and big green dollars. Most seed strains are worth many times their weight in gold–a very profitable turn of events, indeed.
What are some seed businesses doing now to make money and what exciting opportunities may become available in the future? Now that new laws and regulations for Cannabis continue to evolve around the world, this is an auspicious time to consider these questions and the businesses that can be built around breeding and selling seeds. Ultimately, this may include the real possibility of a sustainable and exportable commodity that will increase our gross domestic product.
The current market
Several seed breeders market their seeds through medical dispensaries where they are sold to medical Cannabis patients only. Local regulations dictate exactly how seeds are packed and labeled for unique markets. Their labels indicate the intention for medical use only, often referencing the governing entity and regulation. Some seed outfits label their product as “souvenirs” that are not intended for germination where laws prohibit Cannabis cultivation.
Laws regarding the sale, possession and cultivation of Cannabis are changing rapidly and vary at the local and state level–even in Washington and Colorado, the two states that allow the use of recreational Cannabis. With these rapidly changing regulations, responsible business owners must understand applicable laws wherever they intend to do business.
The future market
As details regarding the legality of Cannabis production, testing, packaging and sales unfold, it will become clearer exactly how seed breeders can realize profits. For the purposes of this article, we will assume the future will offer many ways to market and sell seeds. As such, the ideas presented here are based on the premise that the businesses are operating in compliance with the law.
The current model
Cannabis seeds retail for as little as $1.50 to as much as $30 or more per seed. Dispensaries often offer seeds of their own crosses for test purposes and patient use at the low end of the price scale. Well-known seed breeders’ feminized seeds sell easily for $30 or more apiece. These are often brokered through seed banks, many of which can be found on the Internet. The international, national and state market for Cannabis seeds could expand dramatically in coming years.
Bringing it home again
Modern Cannabis breeding began in California in the 1960s. The strains developed then were exported to Canada and the Netherlands. In the Netherlands, these strains were refined to produce modern Cannabis strains and a burgeoning seed market. Strain breeding never stopped in the United States, and as the laws relax here we will be able to regain our former status as the Mecca of modern Cannabis breeding. This is a big market to reclaim, and we have the genetic building blocks and know-how to easily achieve that goal.
There are a number of specialized categories that are ripe for development in the upcoming seed market.
The profit potential for the niche breeder is high. The breeder can wholesale his or her high-quality seed product to local retail establishments or seed banks. There should be the ability to earn from $2 to $10 or more per seed wholesale. The byproduct material remaining after seed extraction could be sold to producers of concentrates and edible Cannabis products for additional profit. Even at $2 a seed, 1,000 seeds would earn $2,000–and more if there are ways to capitalize on the deseeded byproduct material for additional income. If the seeds can be sold directly to the consumer for $15 a seed, that is $15,000 for 1,000 seeds!
Another important benefit to the customer is that as the legal environment improves more open communication between the breeder and the buyer will develop, allowing for greater consumer confidence and trust.
Contract seed production
Not every breeder and grower will want to produce seeds of their strains on a large scale. Many very talented breeders have limited facilities with which to work their special magic. They can’t always continue to produce seeds of their best crosses, but they can have others do it for them. By supplying contracted seed producers with clones of original parent plants, these breeders can continue to control the production of seeds of their favorite high-demand crosses, while being free to continue with new breeding projects.
The contract grower can grow just for the breeder and sell the seeds back to the breeder for $3 to $8 each. The breeder can then sell them directly or to a seed broker for whatever the market allows and keep the profit. This way, both parties are making money. The breeder may just want a flat fee for the rights to produce the seeds, and the rest of the proceeds go to the contract grower. As with all seed-production ideas, there can be profit made on the deseeded byproduct in addition to the seed sales.
Cannabis seeds are an attractive commodity. They are compact–a film canister holds several hundred seeds–and easy to store. If kept in a cool dark location, there should be high germination rates for at least two years. They are easy and inexpensive to ship, when sales are possible to customers at a distance. The cost to produce regular, non-feminized seeds is the same as it is to grow the plants, unless the flower cycle is extended by a week to allow maximum seed production. Feminized seeds take some extra labor to produce and, therefore, cost more, but those costs are recovered from the higher prices charged for feminized seeds.
Seeds will be a desirable item for a Cannabis retailer to stock because of their long shelf life, compact size and inexpensive packaging. The seed seller can also offer books and supplies to assist seed-buying customers with their growing endeavors. As more and more people have the opportunity to legally grow Cannabis and realize how easy and rewarding it is, the demand for seeds will continue to increase.
This is an extremely exciting time for Cannabis breeders. In the not-so-distant future, an open market for quality seeds will exist at home and abroad.
The ideas set forth here will be real opportunities for entrepreneurs. New jobs and income streams will proliferate and the Cannabis seed market promises considerable profits on a long-term basis.