Russian Invasion of Ukraine (Part 3)

Russian Invasion of Ukraine Part 3 of 3

Russia’s invasion of Ukraine on February 24th, 2022 spelled further disaster for the industry by disrupting the critical fertilizer supply-chains that sustain cannabis production globally. Together, Ukraine and Russia produce 28% of the NPK fertilizers (nitrogen, phosphorus and potassium) sold on the global market. The resultant sanctions placed on Russia by the United States, have, in effect, cut-off the global market from the largest exporter of fertilizers and soil nutrients. As a result, fertilizer prices have skyrocketed within the United States. Modern Farmer reported that, over the past year, the price of anhydrous ammonia rose 225%, liquid nitrogen rose 192%, and Urea rose 149%.

Huston Hoelscher, manager of the environmental sciences group and senior pest control advisor at Urban-Gro, a Colorado based cannabis cultivation facility design and engineering firm, said that without these critical fertilizers, farmers will experience lower yields and produce lower-quality products.

Furthermore, Liz Geisleman, the co-founder of Canna Consortium and acting CEO of Rocky Mountain Reagents, predicts the industry will experience supply-chain disruptions to other key inputs such as solvents and packaging. Geisleman adds that skyrocketing gasoline prices caused by US sanctions have also disrupted cannabis delivery firms, placing greater strain on the industry.

Alain Menghé à Menghé, the CEO of Lio Pharmaceuticals, adds that rising energy costs will impact more than just transportation, but also the storage and production of cannabis. Furthermore, he insists that with the war raging on, the EU will deprioritize regulatory changes for cannabis use until the conflict is settled.

Bill Gorman, the sales director at Botanical Extraction Huber USA, advises others in the industry to follow the three Ps: “Patience, Patience, and Plan B.” He recommends businesses line up secondary sources for their core materials, adding that “if you don’t do that, then you just put all your eggs in one basket.”

Lauren Fortier, the director of cultivation for Theory Wellness, a Massachusetts based marijuan company, offers a solution for domestic cannabis producers. Fortier recommends the adoption of regenerative farming techniques which ‘close the loop’ by recycling or reusing resources in as many stages of a plant’s life cycle as possible. This has allowed regenerative farmers to insulate themselves from supply-chain disruptions.

Regenerative farming techniques include, but are not limited to:

  • Capturing and reusing wastewater
  • Using eco-friendly packaging
  • Using living soil which doesn’t require additional nutrients
  • The incorporation of an integrated pest-management system through the use of specific insects, mites, and other organisms
  • Utilizing outside air in greenhouses to lower temperatures; thereby reducing energy consumption

Fortier has already deployed many of these techniques at Theory Wellness, stating, “all of the things that we use are either reused or genuinely grown on our farm or sourced locally.”

As it stands, regenerative farming techniques provide a path forward for the domestic cannabis producers, allowing them to insulate themselves from the current and potential future disruptions to supply-chains.

Part 1, ‘The History of Cannabis in Ukraine

Part 2, ‘The Legalization of Cannabis in Ukraine

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