In commercial cannabis cultivation, investors and professional operators alike have many questions, regardless if they are entering the industry or just want to see how their operation compares to others. One of the more significant questions that is always brought up is yield. How do you compare to your peers? It can be hard to know with so many different ways to measure this one metric, and not all measurements are created equal.
Production Per Light
Let’s first talk about a few of the most common methods for measuring yield, starting with the most common legacy measurement of yield per light. This metric has been around since illicit market growers grew in basements, and it is still mentioned today—though less and less as the industry has matured and migrated toward more defined metrics.
This measurement tells us the yield under a single light. An older benchmark that I still hear about often is yielding at least 2 lbs. per light. The output and footprint (more on this later) aren’t defined in this measurement, and as such, you are not able to accurately say if that is a good production figure.
Let’s look at several scenarios. Grower A has a single 2,000W light comprised of two 1,000W bulbs and grows approximately 2 lbs. under that light per cycle. Grower B uses a single 1,000W fixture and grows the same amount per cycle as Grower A. At face value Grower A and Grower B appear to have the same yield; but once you explore past that basic figure you clearly see Grower B’s production is more efficient, and Grower B is more attractive from both an investment and operational standpoint.
If Grower A is using a 2,000W-fixture to grow over a 25-square-foot area and Grower B is growing over a 16-square-foot area and getting the same yield, you can now tell that Grower A is approximately 50-percent less efficient.
Photos courtesy of Andrew Lange
Grams Per Square Foot
Currently the most common metric reporting seems to be grams per square foot (g/sq. ft.). This measurement is a step up from the yield per light, but it also comes with its own set of drawbacks. This measurement is taken using the following equation.
(total yield in grams) / (total cultivation footprint) = (grams per square foot)
So, if you are growing using a 1,600 sq. ft. canopy and you yield a total of 90,600 grams, your equation would look like this:
90,600/1,600 = 56.625 grams per sq. ft.
With this type of reporting metric, we can more easily compare yields at different facilities based on productivity. For example, if Grower A reports a yield of 56.625 g/sq. ft. on her last harvest, and Grower B reports 60 g/sq. ft. (based on a total yield of 96,000 g), we can clearly see that Grower B is more productive with the cultivation space that he has.
But for this measurement to mean anything we need to standardize the reported metrics that go into this figure:
Square Footage of Cultivation: This figure should be calculated using only the canopy of the cultivation area. Canopy is defined as the area in which plants are present. If you have a 2,000-square-foot cultivation room that houses 48 4-foot by 8-foot tables, you would report your canopy space as 1,536 sq. ft. (48 tables x 32 sq. ft. of table space).
Product Weight: Product weight should be reported as dry and destemmed. The flower should be untrimmed, so that you account for the full weight of usable flower product; but if you can only weigh post-trim, then simply add in the weight of the collected trim. Reporting only dry weights is important as the product should be in a state in which it would qualify for sale as a final product according to your local laws and regulations. And of course, the product should be completely destemmed as the stems are not a flower product. (Keep in mind these calculations are intended to figure out total usable flower product and may not be the same if you extract the entire plant as some cultivators do.)
Several of the cultivars grown at Agrios’ leased facility. These are about one week from flowering and are producing 90-plus grams per square foot or about 2.5 g/W.
Grams Per Watt
As you can see with the previous example, as long as the reporting requirements are the same, it is quite easy to see which grower is more productive; but what it doesn’t show you is the potential for profitability. Measuring grams per watt (g/W), however, is the most accurate way to truly look at both production quantity as well as potential profitability. This metric takes into account the amount of energy (watts) used to produce one gram of product. The higher the production output per watt, the more efficiently the grower is producing. To calculate this figure, use the following equation.
Step 1. First calculate your total light output in watts:
(number of lights) x (draw per light in watts) = (total draw in watts)
Step 2. Then, once we have our total draw in watts, we use the following equation to get our grams per watt figure:
(total yield in grams)/(total draw in watts) = (grams per watt)
To illustrate this, let’s apply the formulas from each step above. Let’s say Grower A produced 90,600 grams using 100, 660W LED lights, where Grower B produced 96,000 grams using 100, 1,000W HPS lights. Both growers utilized a 16-square-foot footprint per fixture, and for ease of comparison, each grower had 100 lights for a total coverage of 1,600 sq. ft.
With this information we can tell that even though Grower B has produced more per square foot, Grower A is 43-percent more efficient than Grower B.
Why Efficiency Is More Important Than Raw Yield
With all the talk around yield, why is efficiency more important? As commercial operators, it’s important for us to maximize productivity per square foot the same way any other manufacturer does in other industries, but we must do so without sacrificing efficiency.
Cannabis cultivation licenses are usually accompanied by strict zoning laws, limiting potential sites to a mere fraction of available land. This, along with the increased cost and operational risk of building ever-larger facilities, shows the importance of focusing on efficiency over raw yield.
Efficiency not only helps reveal how profitable a company could potentially be, but it also shows how environmentally friendly a company is. The indoor cannabis industry alone uses 1 percent of the nation’s power (according to the 2012 report “The Carbon Footprint of Indoor Cannabis Production,” by Dr. Evan Mills); that may not sound like much, but that is the equivalent of power used by 1.7 million American households. Greenhouse gas emissions are estimated at the equivalent of 3 million cars each year. As cannabis production expands across the U.S., those figures will only increase unless we start focusing on efficiency while designing and building new facilities.
Production efficiency also gives us a measurement tool of a company’s potential profitability. In other words, if you are spending more to create the same amount, you will be less profitable. As you can see from the previous examples, overall production doesn’t tell the complete story on how a given company is set up to perform financially. By taking into account even simple metrics such as the power used to produce the reported yield, we get an idea of that company’s potential for profitability, and when companies are evaluating a potential investment opportunity, that is much more important to know than the raw yield figures that are often presented.
Andrew Lange is the chief technical officer of Agrios Global Holdings, an agriculture technology and services company based in Canada.
How to Control Alkalinity in Greenhouse-Grown Cannabis
Features - Nutrient Matters
Several options exist for neutralizing excess alkalinity to prevent pH creep.
We’re typically cautious about what’s in our drinking water, but how often do we think about the water our plants are consuming? The pH and alkalinity of your irrigation water can have a dramatic effect on the substrate pH and, consequently, plant production. That’s why testing your irrigation water is important.
pH is a measurement of the relative hydrogen (H+) ion concentration in the water. By itself, it has only a minimal influence on your substrate pH. Alkalinity levels, on the other hand, can quickly influence the substrate environment and nutrient availability. Alkalinity is a measurement of the carbonate concentration in the irrigation water. The relative concentration of carbonate species—carbonates (CO32-), bicarbonates (HCO3-), and carbonic acid (H2CO3)—is the main buffering system controlling irrigation water pH and substrate solution pH. If the irrigation water contains a high concentration of carbonates and bicarbonates, the substrate solution pH can rise to undesirable levels for cannabis production.
Bicarbonates are not thought to be directly toxic, but they will interfere with essential element root uptake and increase the substrate solution pH. Iron deficiency, identified by yellowing or interveinal chlorosis of newly expanding and developing leaves, is the primary problem for plants growing in a high pH substrate (Fig. 1). Iron deficiency is more acute for crops being grown in a small volume of root substrate or those grown for a longer production time, which allows a gradual rise in substrate pH.
Alkalinity Levels: Why They Matter
High alkalinity levels in irrigation water can limit plant growth and cause economic losses for producers of container-grown cannabis crops. High alkalinity can occur in coastal areas or at locations over limestone bedrock. Much of the well water in the Midwest and Great Plains of the U.S., southern Ontario and the prairie provinces of Canada contain excessively high levels of alkalinity. Testing your water is the first step in determining a management plan.
Considerations for Alkalinity Testing
The level of alkalinity in irrigation water can vary with well location, well depth and time of the year. A standard water analysis usually includes pH, electrical conductivity and alkalinity. Cannabis growers may also want to test for macro-nutrients, including nitrogen (N), phosphorus (P), potassium (K), calcium (Ca), magnesium (Mg) and sulfur (S), and micronutrients boron (B), chloride (Cl), copper (Cu), iron (Fe), manganese (Mn), molybdenum (Mo), and zinc (Zn) in their water. Water tests are recommended for each well and should be done annually. Because plugs contain a small volume of substrate, cannabis clone producers should consider monthly water tests while they are starting to monitor the water quality variations over the course of the year.
Fig. 1: Elevated levels of alkalinity will result in an increase of the substrate pH, which will tie up iron. This elevated substrate pH induced results in the manifestation of interveinal chlorosis of the new and expanding leaves in hemp and other plant species.
Brian Whipker
Taking an Alkalinity Sample
Obtaining a water sample for alkalinity testing is quick and simple. Here’s how:
Sampling Procedure
Allow the water to run for five minutes to clear the line, making sure the sample is clear of any fertilizer solution.
Rinse a clean, plastic 16-ounce container two to three times with the water to be tested.
Fill the container completely and cap tightly.
Label the bottle with your name, address and type of analysis requested.
Mail the sample so it arrives at the lab within 24 hours.
Alkalinity Testing
A number of commercial labs conduct water analysis for alkalinity and micronutrients. Make sure you send your sample into a commercial lab that will be able to provide acid injection recommendations. For analysis, check with your local extension personnel. Some states have free testing options, and some labs or states will only run a portion of the tests you may need.
Methods to Neutralize Alkalinity
Every cannabis operation varies in water quality, root substrate type, fertilizer type (acidic or basic), watering practices, container size and length of time a crop is grown. Therefore, because alkalinity is the main component influencing the production system, it should be neutralized first before you determine and implement a fertilizer strategy.
Growers can use a few methods to overcome high alkalinity in their irrigation water: acid addition, fertilizer modification or utilizing pond water for irrigation. The methods or combination of methods used vary depending on the operation. They include:
1. Acid Injection
Acid is injected into the irrigation water to neutralize the alkalinity. The amount of acid needed depends on the starting pH and alkalinity level of your irrigation water and the target endpoint alkalinity level desired. In general, a target endpoint alkalinity of about 2 milliequivalent (meq) [122 ppm bicarbonate (HCO3-)] is recommend for most greenhouse-grown crops, including cannabis. (This also applies to container-grown cannabis indoors.) This should result in an endpoint water pH of 6.0 to 6.2. This target endpoint allows for seasonal variations of alkalinity that naturally occur in wells and allows for errors in measuring acids. Operations that produce clone plugs and are willing to monitor their alkalinity level weekly may desire to neutralize to 1 meq of alkalinity (which will result in a water pH near 5.7) to have greater control of their substrate pH.
The common acids used for alkalinity control are: phosphoric (H3PO4) (75% and 85%), sulfuric (H2SO4) (35% and 93%), or nitric (HNO3) (61.4% and 67%). Each acid supplies beneficial nutrients to the plants. For instance, one ounce of each acid added per 1,000 gallons of water would supply: 2.92 ppm P with 75% phosphoric acid, 1.14 ppm S with 35% sulfuric acid, or 1.47 ppm N with 61.4% nitric acid. All acids are hazardous because of their characteristics, but some are more potent than others. Phosphoric acid, for example, is relatively safer than sulfuric, which is safer than nitric. Therefore, growers should wear protective clothing when handling acids. Citric acid can also be used but is the least economical.
Remember to always add acid to water! Do not add water to a concentrated acid (which could cause it to splatter up and result in severe burns). This means if you have to mix a tank, first fill up the tank with water and then add your concentrated acid. This will also ensure that you have a homogeneous mixture.
Most operations use sulfuric acid. It is the least expensive, moderately safe and provides adequate levels of sulfur. The simplest type to use is battery acid, which is 35% sulfuric acid. Phosphoric acid is suited for operations needing to neutralize up to 1 meq of alkalinity. When higher amounts of alkalinity must be neutralized, the amount of phosphorus (P) provided far exceeds the requirements of the plants. High levels of P can result in excessive plant stretching, especially for clone plugs.
Pond water is an excellent source for irrigating plants. It does not contain excessive levels of alkalinity nor other nutrients.
Emelianov Evgenii | Adobe Stock
(Some commercial floriculture growers use phosphoric acid to provide plants with sufficient levels of P and neutralize the remaining alkalinity with sulfuric or nitric acid.) Growers sometimes select nitric acid because it supplies N and allows them to decrease the amount of N fertilizer applied.
After adding acid, retest the water after one day and two to three weeks later to double check your water pH and alkalinity levels. Because cannabis is a bioaccumulator, it would be ideal to test the acid you use to ensure that it does not contain heavy metals.
2. Acidic Fertilizers
All fertilizers are labeled with their level of acidity or basicity, which is expressed in pounds of calcium carbonate equivalent per ton (an agricultural term that measures the basic or acidic effects of a fertilizer on the soil pH). Acidic fertilizers offer another option to neutralize alkalinity and lower the root substrate pH. The acidifying potential of acidic fertilizers is mainly due to the ammoniacal and urea forms of nitrogen. High levels of ammoniacal-nitrogen can lead to ammonia toxicity in some crops (identified as yellowing and possible curling of the upper leaves, which may progress to a marginal necrosis).
Ammonia toxicity is more likely to occur during the winter months (cool substrate and air temperatures and overcast conditions). In addition, ammoniacal and urea forms of nitrogen promote leaf expansion. Too high of a percentage of nitrogen in these forms can result in excessive plant growth. Greenhouse growers prefer fertilizers with more than 80% of the nitrogen in the nitrate form to avoid excessive growth rates.
The general recommendation from North Carolina State University for continuous fertilization of greenhouse-grown floriculture species is that ammoniacal-nitrogen (plus urea) should supply less than 33% of the total nitrogen (with the remainder being nitrate-nitrogen). This also applies to cannabis grown indoors. When an acidic fertilizer is used to counteract alkalinity, ammoniacal-nitrogen levels can be as high as 50%. Acidic fertilizers with ammoniacal-nitrogen levels more than 50% are only recommended as short-term corrective measures.
3. Pond/Surface Water
Pond water is an excellent source for irrigating plants. Pond water does not contain excessive levels of alkalinity nor other nutrients. Levels of calcium and magnesium in pond water are usually low, and supplemental Ca and Mg applications may be required. Protecting the pond from contamination is a must for growers. Herbicide runoff is a concern, and water from surrounding farm fields must not drain into the pond. Filtration and algae control must be implemented before using pond water.
Stay on target
Regardless of the method selected, alkalinity neutralization is required for operations that have well water alkalinity levels greater than 2 meq [122 ppm bicarbonate (HCO3-)]. Growers will need to select a neutralization method that best suits their operation. It is best if you conduct routine analysis of your root substrate to monitor your pH and nutrient levels and to ensure that your fertility and alkalinity neutralization programs are on target.
Brian Whipker, Paul Cockson, James Turner Smith & Hunter Landis are from the Department of Horticultural Science, North Carolina State University, Raleigh, N.C.
How to Move Past the Sativa-Indica Classifications of Cannabis
For quite some time, I’ve had the idea to write a column about how we really need to let some of the vernacular of the cannabis industry fade into the past to further help destigmatize the industry. At the very top of my list of words that should probably be abandoned are “sativa” and “indica.”
Of course, it’s a good thing that I didn’t write that piece when I wanted to because I would have looked like an idiot considering a couple of landmark research studies that were recently published. And who knows, perhaps I’ll still look like an idiot when the smoke clears and the dust settles, but at least now this column is better informed than it would have been had I penned it a few months ago.
So, here’s the thing, despite these recently published studies, I believe that just because we could continue to use the industry jargon of sativa and indica doesn’t mean that we should use those terms. In fact, if anything, these articles have strengthened my case as they highlight what an empty and meaningless classification system that has become. Allow me to explain…
A Look at the Sativa/Indica Science
One of these aforementioned studies was published in Plant Physiology1 by Jordan J. Zager and colleagues. Unlike much of the past research that has looked at and segregated cannabis cultivars based upon DNA, the researchers actually isolated and examined RNA from glandular trichomes along with cannabinoid and terpene profiles. While sequencing DNA gives a genetic profile of an organism, sequencing RNA reflects only the sequences that are actively expressed in the cells. This is a way to examine variables within otherwise identical genetics, or the phenotypic expression. The researchers offered some compelling evidence that there are some genetic grounds on which to differentiate between Cannabis sativa L. subgroups (presumably, sativa and indica). In other words, even though the scientific community may still only recognize a single species that is Cannabis sativa L., there is at least some evidence that two or more subspecies do, in fact, exist. Score one for sticking with sativa/indica, right?
To be fair, even though I called this a landmark study (and it is because of their methodology), it’s not the first evidence proving that there are different cannabis subspecies. Welling, et al., published a paper in Euphytica² in 2016 in which the authors argued that properly categorizing cannabis cultivars requires “both cannabinoid profiling and the co-dominant DNA marker assay.” That is to say that there’s presumably a difference in the cannabinoid profiles between the alleged sativas and indicas, and therefore, one must consider the cannabinoid profiles along with the genetic markers in order to accurately classify something as a sativa or an indica. More evidence for sativas and indicas, yes? Looks like I’m 0-for-2.
Additionally, researchers Anna Schwabe and Mit McGlaughlin at the University of Northern Colorado just published a paper in the Journal of Cannabis Research3 in which they found “strong statistical support [for] dividing the samples into two genetic groups. …” But here’s where the whole sativa/indica thing starts to go off the rails because that sentence continues with “[but] the groups did not correspond to commonly reported sativa/hybrid/indica types.”
And it only gets worse from there, because this is definitely not the first time a researcher has pointed out the discrepancy between what the industry calls a sativa or an indica and what the science actually says about it. For example, Hillig published a paper in 2005 in Genetic Resources and Crop Evolution4 in which he analyzed genetic information for more than 150 cultivars. He concluded that “the indica gene pool includes fiber/seed landraces from eastern Asia, narrow-leafleted drug strains from southern Asia, Africa and Latin America, wide-leafleted drug strains from Afghanistan and Pakistan, and feral populations from India and Nepal.” In other words, turns out that whole thing about how sativas have thin leaves and indicas have wide leaves isn’t actually true.
Dr. Ethan Russo, director of research and development for the International Cannabis and Cannabinoids Institute, blasted the way the sativa/indica classification system is used in the industry in a 2016 interview published in Cannabis and Cannabinoid Research5. He stated, “there are biochemically distinct strains of cannabis, but the sativa/indica distinction as commonly applied in the lay literature is total nonsense and an exercise in futility. One cannot in any way currently guess the biochemical content of a given cannabis plant based on its height, branching or leaf morphology." As such, in the absence of a genetic test and full cannabinoid and terpene profiles, we cannot reasonably be certain that a given cultivar is truly a sativa or an indica.
Researchers are questioning the common conceptions of sativa vs. indica.
Eric Limon | Adobe Stock
Why Does this Matter?
The entire cannabis supply chain, from cultivators to budtenders, does a disservice to customers, and especially to medical patients and/or individuals who are new to cannabis use, when this kind of meaningless distinction is used. As Schwabe and McGlaughlin stated, “Differences in characteristics within a named strain may be surprising for a recreational user, but differences may be more serious for a medical patient who relies on a particular strain for alleviation of specific symptoms. … There is no consistent genetic differentiation between the widely held perceptions of sativa and indica cannabis types. Moreover, the genetic analyses do not support the reported proportions of sativa and indica within each strain, which is expected given the lack of genetic distinction between sativa and indica.”
In Summary
So, here’s what we know:
1. Despite the fact that Cannabis sativa L. is a single species, there is some genetic evidence that supports the notion that there are at least two distinct subspecies of the plant.
2. However, whatever the ground(s) on which these subspecies distinctions can be made, visual characteristics such as leaf width, plant height or pretty much any other visible plant morphological characteristic is definitely not among them.
3. Therefore, those true subgroup designations all too often do not match up with the sativa/indica labels bestowed on a given cultivar.
4. This lack of clarity is further complicated by the cultivators’ ability to change cultivar names, whether for profit (i.e., to capitalize on the popularity of certain cultivars), perceived uniqueness (i.e., trying to differentiate themselves within the marketplace by having something unique or special), or for literally any other reason under the sun. You can also see profound genetic variability through breeding.
5. This free-for-all with both cultivar names and the sativa/indica labels that accompany them creates a scenario that is inconsistent and unpredictable for the consumer. In the best-case scenario, this is annoying. In the worst-case scenario, it can have severely negative consequences. (For more info on just how problematic cultivar substitution can get, see Dr. Dedi Meiri’s TED Talk6 called “Behind the smokescreen of medical cannabis” in which he tells the story of a failed attempt at substituting cultivars for use in children with autism).
I certainly hope that someday our industry will be more standardized and that we will finally know enough about the various cultivars to be able to talk intelligently about the distinction between cannabis subspecies. However, that day is not today. When that day finally comes, I suspect we also will have gained enough of an understanding of the relationships between the plant’s secondary metabolites (e.g., phytocannabinoids, terpenes, etc.), individual body chemistry, and various disease conditions that the simple sativa/indica categorization will be meaningless anyway—kind of like it is today.
As Russo said in 2016, “I would strongly encourage the scientific community, the press and the public to abandon the sativa/indica nomenclature and rather insist that accurate biochemical assays on cannabinoid and terpenoid profiles be available for cannabis in both the medical and recreational markets. Scientific accuracy and public health demand no less than this.”
Curtis Livesay, Ph.D., CCA, is the Director of Agronomy Services for Agrios Global Holdings.
East Fork Cultivars Sets Itself Apart From the Oregon Marketplace
Features - Cover Story
East Fork Cultivars’ executive team took a bad hand and turned it into a business like few others in the cannabis industry.
Clockwise from Left: Aaron Howard, Mason Walker, Nathan Howard
Photos by Olivia Ashton
In life, we all get dealt bad hands: poverty or financial ruin, lost relationships, poor health, etc. We don’t control what cards we’re dealt, only how we play them.
It would have been easy and understandable for Nathan and Aaron Howard, the co-founders of Oregon-based East Fork Cultivars, to see the cards handed to their family and their other brother Wesley and fold. Wesley had a severe case of neurofibromatosis, a genetic condition that causes tumors to form on nerve tissue such as the brain, spinal column and nerves.
Under Oregon’s original medical cannabis program (passed by ballot measure in 1998), Aaron grew for Wesley and others at his southern Oregon home (a former llama breeding ranch). Cultivating mostly high-THC cultivars that Wesley requested to manage the pain and other ailments associated with his condition, the Howard family saw up close the side effects those type 1 cultivars had on their late brother. (Wesley passed away in 2017 due to complications from his condition.) “It definitely helped him just deal with the severe pain he was in and the mental pain of being dealt a really, really difficult and unfair hand in life,” Nathan recounts. “But we thought maybe we could find or create something that was less intoxicating that could still bring Wesley relief, because he was essentially always high, like really intoxicated, and that was pretty much the only option available.”
Nathan and Aaron began searching for cultivars that would provide the pain relief and euphoria that their brother searched for in cannabis without leaving him debilitatingly high: elusive type 2 and 3 cultivars. Little did they know, that search for genetics better suited for treating their brother’s symptoms would be a major differentiator for their future company, carrying it through the tough times ahead.
In 2014, while researching cannabidiol (CBD), the brothers discovered Project CBD, a California-based nonprofit dedicated to promoting and publicizing research into the medical uses of CBD and other components of the cannabis plant. The following year, the brothers sourced 12 plants that fit their description. Of those, only six had the correct cannabinoid profile (i.e., that weren’t high-THC varieties), different phenotypes of OG78, ACDC and Canna-Tsu. Those plants became “the beginning of our breeding work,” Nathan says.
The East Fork Ranch is located in Takilma, Ore., in the Illinois River Valley.Aaron Howard’s home on the ranch. Aaron also cultivates flowers and vegetables at the farm.
For Aaron, these genetics offered him an opportunity to answer a question he had long posed to himself as a caregiver: What would it be like to feel good about what he was growing?
Although he knew many people enjoyed the medical benefits of high-THC cultivars, he also was aware of the recreational aspects of the cannabinoid, and that wasn’t what interested him about the market.
Organic Roots
The East Fork ranch is a 33-acre property in the town of Takilma in Oregon’s Illinois River Valley and is teeming with natural wildlife, including deer, cougars, coyotes and bears. Only an acre (43,560 square feet) of the property is dedicated to Oregon Liquor Control Commission (OLCC)-licensed cannabis production, meaning most of the property is untouched in its native state. “Our bioregion is a wildlife hotbed, and we do our best to preserve that,” CEO Mason Walker says. “We plant many pollinator-friendly flowers every year and maintain a healthy pollinator population, with tons of bees and a diverse array of butterflies being among our favorites. We also keep a small orchard and some additional fruit tree plantings throughout the ranch.”
The team prefers using materials and resources from the property instead of importing them from other parts of the state or country. The property shares water rights from the Illinois River with neighboring farms, which feeds into the property’s three watering ponds. From there, mechanical pumps pull water from the ponds to feed the drip tape irrigation system. “This drip system is a way to minimize waste, while preventing weeds from taking hold by slowly watering only the necessary areas,” Walker explains.
In addition to gravity-fed watering ponds, East Fork Cultivars grows its crop in the native soil, further connecting the company to the region’s terroir. “By choosing to grow in native soil, we reduce our impact and deepen our connection with this place, which helps to create chemically complex cultivars,” Nathan says. “We also know that terpene profiles are mostly determined by the growing environment—and soil is a big part of that.”
To maintain and replenish that soil’s natural microbiome, the Howards have gotten into the habit of cover cropping their fields during harvest. The timing is very important, as cover cropping during or immediately after harvest ensures the soil is without vegetation for the shortest possible amount of time. “These cover crops overwinter and provide many benefits to the soils, such as fixing nutrients, improving soil structure, preventing erosion, adding organic matter, suppressing weeds and increasing biodiversity,” Aaron details.
A row of Wesley’s Wish, an East Fork genetic named after the Howard’s late brother.
Before planting the new crop, the Howards and their team test the soil to determine if any nutrient supplementation is needed. If so, locally sourced, organic dry amendments get spread via a rotary spader, “a less invasive alternative to a traditional tiller,” Aaron says. He adds that East Fork collects and cultures “indigenous microorganisms from the healthy local forests that immediately surround the ranch by inoculating rice cooked al dente or wheat middlings. This has greatly improved our soil micro-biosphere, which also improves soil loaminess, tilth, structure and attracts earthworms. We spread this inoculum at a rate of 1,200 pounds per acre and hand rake to incorporate into our beds.” Those indigenous microorganisms also are paired with biochar the East Fork team prepares out of stalks from the previous year’s harvest.
Using Korean Natural Farming (KNF) and JADAM natural farming principles, the only nutrients applied to the crop during cultivation are the anaerobic ferments made in-house by the East Fork Cultivars team. But even those feedings are kept to a minimum, as a minimal-pruning technique (when used in low humidity areas such as Southern Oregon) allows the cannabis plants to “prune themselves” by allowing the inner foliage to die back and fall to the ground. “This act of dropping unproductive plant material not only provides the soil with mulch, but it also recycles the nutrients back into the soil,” Aaron says. “Any material that is pruned or any culled plants (e.g., males) are used in a liquid ferment, further recycling nutrients back into the crop. We focus on feeding the soil, which is what feeds our plants.” (In higher humidity growing environments, be on the lookout for disease build up (botrytis and powdery mildew) if you adapt this technique.)
The East Fork farm has been Clean Green Certified since 2016, but the team is working to add a new, more robust cannabis certification, Sun+Earth, created by a nonprofit offshoot of Dr. Bronner’s, which produces organic soap and other personal care products. While both validate that cannabis producers use organic practices, Sun+Earth certification also looks at the company’s workplace culture, ethics, and community engagement track record. Walker expects the company to be only the second Oregon farm and among the first in the country to receive that certification. “Sun+Earth follows the same standards as USDA Organic certifiers and includes aspects of B Corps certification. We’re really excited about it and the potential positive impact it can have on the trade,” he says.
The Fall of Rain
Getting that first OLCC harvest in the healthy ground in 2016 was a race against the clock. To ensure the company would have enough time to let the plants fully mature, the Howards planted the first crop five weeks before their first OLCC inspection certifying the property was to code. A week before the inspection, “we really did between maybe three weeks or a month of work in one week to get it up to code for our investigator to swing by,” Nathan says, adding that he does not recommend anyone attempt this themselves. “Everybody was exhausted … and kind of wanting to quit. And it hadn’t even started yet.”
Ultimately, the gamble paid off, and East Fork received its cultivation license in time to complete its first harvest. But that was far from the last hurdle the company cleared in its now four-year journey.
That first harvest was going to prove challenging in and of itself: East Fork Cultivars brought to market different genetics with exotic terpene and cannabinoid profiles, giving the business an opportunity to differentiate itself from the competition, but it also had to educate a largely neophyte consumer on the value of non-intoxicating compounds such as CBD. In other words, East Fork had to build a marketplace for plants it was already breeding and a crop it was already growing.
A serendipitous encounter with a rep at Farma, a Portland dispensary with a strong focus on science and education, blossomed into one of East Fork’s first retail partnerships. And then came a deal with Luminous Botanicals, an Oregon company that makes THC and CBD tinctures and topicals that remains one of the farm’s most important partners today.
The first growing season looked promising: summer weather held out, plants looked healthy, East Fork was among the first to receive a cannabis production license from the state, and the harvest promised to be bountiful. And then, the storms hit. “A … typhoon hit Southern Oregon in October [2016],” remembers Walker.
“We had plants literally under water,” Nathan recollects, a slight grimace on his face as he details the frustration of seeing that first year’s hard work rained on. Some neighboring farms saw upwards of 60% crop loss, Walker and Nathan say. East Fork got lucky: Although many plants were under water, only 5% of the crop was lost to mold and mildew.
Among other water-related issues, the crop would need a longer drying time, which meant delays in revenue generation. East Fork was able to hold out through the winter season with barely any sales and bring its first crop to market in the spring of 2017, around the same time that Walker became the company’s CEO.
“The actual cannabis flower was not super attractive,” he describes. “However, it was still very efficacious having the chemical compounds that we knew were therapeutic. So, we ended up … sending most of our 1,200 pounds of cannabis that we had grown in 2016 to product-maker partners.” Although a success in some regards, that sale was a second blow, Nathan says, as East Fork had already spent time and resources hand-trimming its flower, thinking it would be sold as-is to consumers.
As its first crop made its way through the market, the East Fork team quickly saw a pattern develop—while the medical community was already getting behind CBD as a valid medical treatment option (thanks in large part to Dr. Sanjay Gupta’s 2013 coverage of Charlotte Figi, the inspiration behind the popular Charlotte’s Web CBD oil), adult-use-market consumers remained unconvinced by CBD-dominant flower products.
East Fork Cultivars’ drying racks. Corazón de Piña, one of East Fork Cultivars’ more exotic genetics.
Summer of Fun
To help educate Oregon’s marketplace on cannabis, cannabidiol, and the endocannabinoid system, with the hopes of also lifting its own boat, East Fork Cultivars hired Anna Symonds as its director of education and created CBD Certified, a free cannabis science education program. Symonds’ role mostly consists of developing educational tools to inform both retailers and consumers on the value of cannabis’s many compounds and has presented CBD Certified to more than 3,000 people. She also has partnered with groups like the Oregon Department of Agriculture and New Seasons Market to provide education for regulators, their staff, and customers.
The company also diversified its offerings by selling pre-rolls to its dispensary partners. Sales were a bit slow at first but soon picked up. That first harvest “gave us enough momentum to a) stay alive, and b) hire our first real employees, … you know, transitioning out of being a medical startup into a scaled-production farm.”
The summer of 2017 was primed to lead East Fork to success: The farm’s full allowable acre was cultivated (mostly with type 2s and 3s), the Howards tinkered with their organic practices, Walker managed the business end of things, and the new staff learned their roles.
With the fall weather more cooperative than in the company’s first year (“75 and sunny the whole way,” Walker recounts), the executive team felt confident that it would not only do better than the last year but also do better than most cultivators in the market. After all, they were offering a product that few other growers understood, let alone one to which they had access. “I was like, ‘I’m pretty sure at this point that no matter what we grow, we can figure something out, and we won’t lose all our family’s and friends’ money,” Nathan says.
Then, the Oregon market collapsed.
An East Fork Cultivars team member doing post-harvest trimming
Winter of Sorrow
“It was a killer bumper crop particularly for Southern Oregon sun-grown farms,” Walker says. “Just an enormous glut of supply dumped onto the market, and the market exploded, imploded and just completely died.” Farmers, fresh from pulling off a terrific harvest, were the victims of their own success. “It wasn’t that you just could only sell for cheap. It was that you literally could not sell your flower because there was six times more than the state could take,” he says.
Nathan remembers seeing lines at dispensaries through January, February and March of 2018—not lines of customers looking for a great deal, but lines of cultivators looking to make cold-call showings to stores. Nathan compares what happened in Oregon to the Alaskan fishing market collapse except that “what happened to the fishing industry over several decades happened in Oregon in about 18 months.”
“The green rush became the green crush,” he adds. “What was supposed to be a new wealth-generating opportunity became a major new driver of debt and human trauma.” And that human trauma cannot be understated, as a string of farmer suicides followed that historic race to the bottom in pricing. “It was desperate and depressed, and we barely hung on as well.”
Walker credits the company’s survival on the niche it found early on. Without that differentiation, East Fork would have been fighting to sell the same product as its fellow farmers. But that doesn’t mean it didn’t feel pain.
East Fork had to fire nearly half of its 12-person staff. That decision still haunts Walker today, and he is committed to not repeating that experience. “I’ve got a lot of credit cards now, so there won’t be a next round,” he says, only half-joking.
Those tough times and even tougher decisions taught the East Fork team some very valuable lessons on managing expectations, relationships and building a business.
“My biggest takeaway was to speed up our strategy, which is a very basic, age-old business strategy of diversification and differentiation,” Walker says. “At every turn, we try to diversify our offerings, the way we record revenue. So that’s unique products, multiple SKUs, multiple customer types, retailers, product makers, farmers, and then differentiate. So just focus on what we do that’s different from other people,” he says.
For Nathan, the lesson was a bit more bitter. In addition to experiencing the lowest lows of the Oregon market, the Howards were mourning the one-year anniversary of Wesley’s passing. The entire season “made me pretty cynical about the Oregon market, and made me hungry for something else.”
Hemp-Loaded Reboot
Springtime brought a better market, as many farmers decided to sell their products to cannabis processors instead of waiting for flower prices to bounce back.
“It could have been a lot worse, and it was a lot worse for some of our friends’ farms. We were lucky to have a decent niche and a decent amount of differentiation ... focusing on CBD with an identity that we had created over the past few years,” Walker says.
East Fork doubled down on that approach by developing partnerships with contract processors who could turn the company’s flower into any number of extracts with any number of cannabinoid and terpene ratios. “Up until that point, we were just selling flower to product makers,” Walker says. “But we had some product-maker partners that didn’t have their own extractions.” By working with contract manufacturers, East Fork gives its partners “the ingredient that’s turnkey for their products.”
Spring also brought renewed hope to East Fork: The 2018 Farm Bill would legalize hemp production, offering the Howards an opportunity to grow hemp and reach a broader national audience.
East Fork had 1.5 acres of its 9-acre farm, at the time, available to it for hemp cultivation—a small operation, but enough to get started in the market. That is, until Walker spotted a golden opportunity at a neighboring site, just south of the company’s farm. The East Fork team bought the 24-acre property with the help of Steward, a group that provides “financing to small and midsize sustainable farmers through online, crowdfunded investments,” according to the company’s website.
East Fork now owns 33 contiguous acres, which allows it to grow certified USDA Organic hemp. (The East Fork team says that getting certified Sun+Earth demands more rigor than the USDA certification).
The team has partnerships with roughly 40 product makers that use the farm’s hemp or adult-use cannabis products in their formulations, including 16 in the hemp space. Those 16 (which include over-the-counter CBD product manufacturers) help East Fork get in front of grocery store shoppers, not just dispensary patrons. The team also is expanding its breeding program to hemp, taking a two-stage approach in developing new cultivars.
Clones of new genetics ready to be potted. These will grow into mother plants for the next sun-grown season.
“We have ... the top of the funnel, where we bring in as much genetic diversity as we can into cannabis,” Walker explains. “And a lot of that is ... THC-dominant cannabis that has unique terpene profiles that have been created over decades by dedicated breeders. … We’re really just doing lots of crosses and bigger populations that we’re then testing, or we’re trying to give ourselves as many chances as possible to find unique cannabinoid and terpene profiles, particularly type 2s and type 3s.”
The second stage is focused on hemp breeding, specifically. Because its breeding work produces a lot of nonfeminized seeds, East Fork can bring seeds from the best type 3 plants into its indoor seed replication facility, which gives the company the capacity to keep 10 populations independently producing seed, as well as the ability to stabilize seed in breeding and crossing for new hybrids, Walker describes. This is crucial to the company’s plan of bringing a hemp seed line to market by 2020, but the CEO says many hurdles remain. “There are some real ethical bars we have to clear in order to do that, and we have to be really confident in [the seed line]. The feminization rates, the field stability, the morphology, the chemical composition to make sure that hemp farmers are staying [within] legal THC levels. There’s a lot more at stake there, so we have to have more control on that side.”
In another bid to differentiate and diversify its offerings, East Fork is beginning to license its genetics and intellectual property (IP) to partner farms. While anyone can grow East Fork Cultivars genetics on a non-commercial basis, Walker and the Howards partnered with Vibrant Hemp Cultures and North American Plants, Oregon-based tissue culture labs, to produce 3 million plant clones in time for the 2020 hemp-farming season.
The East Fork team isn’t concerned about potential IP theft because the licensing agreements are signed for two years, after which the company will already have a newly licensed product, Walker says.
Sharing The Success
As they make moves to ensure the company’s long-term solubility, the Howards and Walker don’t want to be the only successful farm. Too many friends lost their livelihoods during the “Winter of Sorrow” to see that happen again. To help other farmers, East Fork recently launched the Organic Hemp Farm Network, a co-op of three farms that grow USDA-certified craft hemp. In addition to its own 12-acre hemp lot, the company has 7 additional acres across its three other partner farms, Walker explains. “So, if we have a product maker that needs more hemp than we grew, but is in line with our values and is a good kind of fit for us in our model, we can plug into that excess supply,” he says.
The OLCC-licensed cannabis farm remains in operation, but there are no plans to further expand into that market—especially considering many of the genetics grown on the OLCC lot can be grown on the hemp lot with less-stringent taxation and oversight (55% of East Fork’s OLCC lot consists of type 3 cultivars). With hemp, East Fork has an opportunity to grow from a regional craft grower to a national health and wellness brand.
And what better way to honor a late brother than to ensure that as many people as possible get the same relief that he did.
Brian MacIver is senior editor for Cannabis Business Times and Cannabis Dispensary magazines.
How a New Colorado Law Opened the Door to Medicine Man Technologies’ Acquisition Spree
Departments - Upfront | M&A Monthly
Colorado Gov. Jared Polis signed H.B. 19-1090 into law this past summer, heralding a new era of outside investment and ownership in the state's cannabis market.
Colorado Gov. Jared Polis signed H.B. 19-1090 into law this past summer, heralding a new era of outside investment and ownership in one of the great legacy markets of the U.S. cannabis space. With the floodgates open to new capital, the rampant mergers and acquisitions (M&A) activity in the U.S. cannabis industry during at least the past year may now flow more easily into Colorado’s five-year-old adult-use marketplace. Among the bill’s provisions:
Publicly traded corporations may now hold Colorado cannabis business licenses.
Qualified private funds based elsewhere in the U.S. may now invest in Colorado cannabis businesses and hold more than 10% equity.
These provisions (and other rule-making formalities in the law) will go into effect Nov. 1. Since early June, following the signing of H.B. 19-1090, Medicine Man Technologies has announced acquisition terms for 12 cultivation facilities, seven infused product manufacturers, 33 retail dispensary locations and a research and development lab in Colorado—each contingent on the parameters of H.B. 19-1090. Medicine Man Technologies trades publicly on the OTC markets from which it draws out-of-state investment dollars to pursue those very acquisitions. With Polis’ signature, the company feels that the time to move is now.
“I’ve been working for about three and a half years to get that bill passed,” Medicine Man CEO Andy Williams tells Cannabis Business Times. “Colorado had laws on the books that dated back to the very beginning. Of course, we were the first recreational and medical market to be regulated in the country—and because of that, Colorado was under a microscope.” Williams says legislators put very tight restrictions on ownership and investment when Colorado first rolled out its cannabis system. While called for at the time, “those laws survived longer than they were needed. As states started coming online around the country and investment increased in the industry, that investment flowed around Colorado.”
"As states started coming online around the country and investment increased in the industry, that investment flowed around Colorado.” - Andy Williams, CEO, Medicine Man Technologies
The company’s announcements grew more frequent this summer due to its rampant acquisition spree in Colorado. Williams says this was always the plan.
The executive team laid out its growth plan in the company’s August 2015 S-1 prospectus: “Ultimately, our intent is to become a national or internationally branded cannabis company. … Among other things, the most important developments that need to occur include the legalization and commercialization of marijuana in the United States and a change in the regulatory standards being imposed by the State of Colorado. … Until these issues are resolved, we will be unable to fully integrate all aspects of the marijuana industry under our corporate umbrella.”
Williams says that the wave of incoming capital is helpful for those companies looking for a buyer or a partnership of some kind with out-of-state parties. Consolidation isn’t slowing down, but more than that he cites impending product innovation and technological efficiencies to come in federally licensed cannabis research. MedPharm Holdings, a Medicine Man Technologies subsidiary, has been “selected to move forward” by the Drug Enforcement Administration to assist in its research rule-making and licensing process.
“I believe that this market is certainly one of the most competitive in the U.S.,” Williams says, predicting that Colorado could become “the hub of headquarters of U.S.-based cannabis companies” in time.
Eric Sandy is the digital editor for Cannabis Business Times and Cannabis Dispensary.
Legislative Map
Cannabis Business Times’ interactive legislative map is another tool to help cultivators quickly navigate state cannabis laws and find news relevant to their markets. View More