Quickly switching production to new cultivars of main crops is a common approach for limited duration differentiation. Typically procured from specialty breeders, new cultivars such as honeynut squash are purchased, brought into a crop rotation, and marketed as a new take on an old standby. This approach, unless all breeding is done in-house, implies that a new cultivar is available to, at the very least, several farms at once, which may seem to negate some potential differentiation benefits. However, this availability and lack of complete uniqueness for new cultivars is actually a benefit to the farms embracing a new cultivar. The market must be informed of a new cultivar, its qualities, and must accept them before the benefits of differentiation can be harnessed, this awareness campaign is much less resource intensive when several farms are pushing the same message.
Newly legalized or deregulated crops provide a similar differentiation approach to new cultivars. However, for newly legalized or deregulated crops procurement of the crop is not the main speed bump to production at scale. Often entirely new cultivation methods, or significantly adjusted cultivation systems will be required, adding to switching costs for the farmer. Additionally, legalization or deregulation may not occur at a single moment in time, but as we have seen recently may be a slow domino effect over several decades, limiting the geographies that can switch to the new crop. These factors combine to extend the longevity of differentiation and may artificially inflate crop value. This can be a blessing and a curse for a budding industry around a deregulated or legalized crop…