marijuana plant
Marijuana plant in the sunshine (Photo by tjasam /

By Geoffrey Taylor, MA

Across California’s vibrant hemp and cannabis marketplaces, producers are touting the benefits of taking a more sustainable approach to the growing process while streamlining operations using time-tested technologies. By focusing their efforts on creating more mission-driven, ethical and focused organizations, the hemp and cannabis industry are proving to industry outsiders how important it is to invest wisely into transparent operations. 

According to a February 2020 article from Green Entrepreneur, writer Peter J. Schmitt states that “as sustainable and ethical business practices increasingly fuel consumer spending habits and investors’ decisions, significant competitive advantage is available to businesses that invest in sustainability and social impact efforts.”

For any farming entity focused on corporate social responsibility and enriching the potential valuation of their operations, a robust ESG initiative, or environmental, social/sustainable and governance initiative, allows operators in the hemp and cannabis space to differentiate themselves from the competition in a number of ways.

In his article, Schmitt notes that hemp and “cannabis businesses have an opportunity to make a difference as the industry evolves. Within this decade, we will see that the dominant business and brand leaders that emerge protect consumers as well as the environment.”

From integrated pest management to packaging, hydroponic growing methods to digital monitoring, these industries are bringing technology to the forefront to set a new standard for best practices when growing, processing, curing, packaging or formulating cannabis products for the retail marketplace. 

Positioning your cannabis or hemp organization as a differentiator is critical to setting yourself apart from the crowd. A well-defined vision, mission, ethics and initiatives help to create an environment that appeals to investors and consumers alike. Knowing your intentions in the industry is vital to formulating a meaningful corporate approach to where you belong in the cannabis and/or hemp industries. 

Schmitt writes: “In addition to consumers, stakeholders such as investors, employees, and government agencies are all pressuring companies to uphold social and environmental practices” and that over two-thirds of consumers consider sustainability and social impact when purchasing a product.

Starting with the environmental emphasis, all raw California hemp and cannabis are subject to strict testing requirements thus one major focus is on using more sustainable integrated pest management, or IPM, approaches. By eliminating harmful chemicals from the growing process, manufacturers that produce concentrated cannabinoids can reduce the risk of consumer exposure to those chemicals from consumption of those concentrated products.

Another focus for the hemp and cannabis industry is on utilizing more sustainable packaging options, not only on the retail side but in the agricultural supply side. By utilizing more sustainable packaging options in the retail sector, companies can provide visual proof to consumers that the packaging of their favorite products has a low environmental impact. For the agricultural supply side, reducing the use of non-recyclable plastics can help create a leaner and greener supply chain.

Moving beyond the environmental, we can look more deeply into the social and sustainable initiatives and how they relate to building a robust organizational structure with lasting power. Many organizations in these sectors have robust environmental plans that outline the social and sustainable policies and initiatives that compliment their vision and mission. By developing a committed strategy to act as a steward of the community and the environment, cannabis and hemp entities can put their money where their mouth is.

Lastly, when we dig into corporate governance and the ways in which accountability is purpose built into the business model, it is critical to understand the constructs around hemp and cannabis that require such robust organizational structures. Whether you’re an established entity with generations of agricultural experience under your belt or whether you’re new to farming but not so new to the cannabis industry, your organization brings with it a unique culture defined by your executive leadership, marketing, Human Resources and other departmental executive and leadership roles. Having the right people in the right place to build the right culture takes immense commitment to setting strong ESG initiatives in your farming operation.

At the end of the day, you know your operation better than anyone. But the smallest steps toward social and sustainable responsibility can make a huge difference in how your organization is seen by consumers, investors and other organizations interested in working with your own.

The investment in your organization’s ESG initiatives is the key to creating stronger investment valuations, engaging with more conscientious consumers and creating greater transparency in your organization’s everyday practices. It all begins with the idea of change, but do not be afraid to rule out using a knowledgeable consultant who has a strong grasp of the hemp or cannabis industries. For those of us who find it easiest to develop a strategy in-house, don’t be afraid to take calculated yet heartfelt risks to bring your ESG initiatives to the forefront. It can only serve to benefit the core of your operation.

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