More than $5 billion in state-legal marijuana flew off store shelves in 2015, and national sales are expected to boom as voters and legislators christen new markets and relax rules. But with the piecemeal end of prohibition, growing the plant is more complicated than ever.
That’s partially because the sprouting industry confronts a pile of rules, but also because growers are often raising thousands of plants at a time.
Today, above-board growers must work not only to raise plants, but also to cultivate employee talent and build relations with neighbors, while dutifully obeying regulations they often have worked to help shape, ensuring on-site biosecurity, investing in technology and developing a niche.
Some of the nation’s leading cultivators spoke with Cannabis Business Times and shared lessons they have learned along the way, as well as basic best practices for anyone looking to follow in their footsteps.
1. Pick Your Partners Wisely
It’s one of the most important rules in life and in business: Commit to a business partner with whom you’re compatible.
Former high school biology teacher Tim Cullen, co-owner of the large Colorado Harvest Company, says he found a good match in partner Ralph Morgan, but all around him sees shotgun marriages exploding or slowly coming unglued.
“It would be easier for my wife and I to get divorced,” he says, than it would be for him to break up with Morgan. “My wife and I just have one son and own one house. If Ralph and I got divorced, we have 80 employees, we have six buildings, we own a lot more real estate together, we have a lot more money at stake. Ralph and I cannot get divorced.”
Cullen says it’s important for partners to be compatible in work ethic and complementary in experience and demeanor. He brought to the table a larger grow operation, Morgan a stronger retail presence. “We were just like nice puzzle pieces that fit together,” he says, with similar ages and family experiences meshing well.
But everyone hasn’t been so fortunate.
John Lord, the owner of LivWell, a business described in media reports as Colorado’s largest grower — but not by Lord, who pleads ignorance to that fact — says he chose not to have a partner after a rocky past relationship.
Lord’s pre-cannabis professional background includes the tightly regulated manufacture and sale of baby products to big-box retailers; he says that throughout the cannabis sector would-be industrialists like himself have partnered with younger people enthusiastic about growing the plant.
“What happens in a lot of situations is you ended up with the senior money guys and the young entrepreneurial grower, and that was your marriage. And most of the times that relationship has ended badly,” Lord says.
Many younger growers, he says, consider growing cannabis an art form, something he says is not conducive to a large marijuana-growing business that must turn out reliable product, just like grocery stores, without whimsical variation.
When manufacturing a product on an industrial scale, “you can’t just randomly say, ‘I want to make purple ones today,’ ” he says, noting he’s also seen many formerly illicit growers have trouble adjusting to a rules-compliant MO.
As cannabis businesses grow, all sorts of relationships grow into business partnerships. Some grow out of friendships and others vaguely resemble a family farm.
Rachel Cooper of Washington state’s Monkey Grass Farms, one of the state’s largest growers as a Tier III operation, says her business associates are a pleasure to work with. They’re her mother, father and sister, with past careers in construction, nursing and corporate procurement.
“At least with family, we get over things really quickly, and at the end of the day we’re working to the same goal,” says Cooper, who handles the business’ marketing and public relations. “It’s been fun, actually.”
2. Shape Regulations Before They Shape You
Around the nation’s capital, Corey Barnette is becoming a familiar face, advocating with municipal leaders to tweak local laws and appearing at a press conference last year with three U.S. senators to unveil a bill that would undo federal prohibition on medical marijuana.
Barnette, easily one of his city’s most accessible and civically minded medical marijuana growers, knows the value of molding the regulatory clay before it hardens. “In our industry right now, there’s a serious risk that legislators and regulators will get it wrong simply because they don’t know,” he says. “It does us no good to propose a medical marijuana bill if once we pass those laws it prevents patients from getting the care they need.”
There’s been success so far for D.C.-based cultivators like Barnette, with the city drastically expanding qualifying medical conditions from a short list to one of the nation’s most relaxed standards, and lifting a cap of fewer than 100 plants per grow operation to 500 and then 1,000.
But Barnette, sole owner of District Growers, is not done lobbying. He says one of his next targets is a restriction on licensees moving their grow location, and he’s hoping legislation will soon pass allowing his company to move.
Right now, Barnette is forced to grow his plants only to a small size to cope with limited growing space and his desire to offer a wide range of strains. District Growers’ facility has about 700 plants now, but only 250 would fit if they were grown larger.
“The space I need to grow 95 plants is radically different than 1,000 plants,” he says. “Luckily we had the foresight that at some point these rules had to relax. The question was how long it would take.”
If not for businesspeople going down to city hall, he says, the evolution of laws would have been much slower.
Cooper says Monkey Grass Farms works with a lobbyist in Washington state’s capital to ensure the business’s needs are well-represented, and Cullen says about 25 percent of his time is devoted to rubbing shoulders with decision-makers.
3. Prevent the Need for Pesticides
The U.S. government currently does not approve any pesticides for use on cannabis, which remains federally illegal, and the presence of chemicals on retail product has led state regulators and consumers to panic in states like Colorado, where officials have scrambled to curb their use and where a lawsuit (that has since been dropped) was filed last year by consumers against LivWell for alleged pesticide use.
Growers say one of the most effective ways to reduce the need for pesticides is to simply keep gardens clean.
Lord says LivWell stopped using synthetic pesticides a year ago and advises other growers to do the same, but he says that is, more than anything, to ward off bad press. The public is naive, he says, if it believes unblemished supermarket produce is organically grown.
Still, bureaucrats in places like Colorado and Oregon now are giving their blessing to some pesticides due to labels not explicitly ruling out use on cannabis. Lord says, “There are certain products that are approved now, [which] my guys wouldn’t have within 100 yards of our grow.”
Cullen says his company also had to adjust to changing rules, but has managed to work with restrictions by strictly following an integrated pest management protocol, though he says some insects he’s come to tolerate, particularly gnats.
His staff wears what Cullen calls “hospital gown uniforms” to limit outside contamination.
Some growers, of course, eagerly embrace organic solutions.
The co-owners of northern California’s Artifact Nursery, established last year and already topping more than 2,000 clients, seek out nature’s fixes.
Co-owner Jamie Westbrook* says he watched a nature documentary with his son where a small forest mushroom’s spores infected and then killed an insect before it sprouted a new mushroom from the corpse and unloading another dose of biological warfare on nearby insects.
“Literally the next day I was reading through the farm bureau magazine on companies that had isolated these from the wild,” he says, prompting him to buy the product.
Westbrook says using natural pesticides that affect only the surface of a plant is ideal, as they can simply be washed away, unlike systemic pesticides that travel through a plant’s vascular system and potentially deposit themselves in soil.
Some of his other go-to treatments are organic oils — including sesame and clove — which are applied to plants with a backpack sprayer, coating them and suffocating mites, some of which are microscopic.
Joshua King*, Westbrook’s business partner, says the best measures to reduce the need for pesticides sometimes are the simplest.
“The best preventative is keeping plants healthy,” he says, with “simple things like having fly strips around,” and adding hydrogen peroxide to water or a nutrient solution and applying it to soil/media, can help prevent bacteria in the water, pythium (a waterborne root disease), to some extent, and other things that effect roots. Plus, the residual is oxygen, which the roots love.
(Note: In the world of microbe organic cultivation, however, the use of hydrogen peroxide is not advisable for anything but cleaning.)
“There’s a lot of tricks you learn over the years,” King says. “Organic is very time consuming.”
4. Be a Good Neighbor
What democracy giveth, democracy can take away. It’s a lesson learned across the nation as jurisdictions legalize marijuana. In Washington state, Monkey Grass Farms had first-hand experience beating back a ban. And much like dealing with pests, prevention matters.
“Our county planning board was trying to ban producers/processors,” Cooper recalls. “It stemmed from some neighbors who were angry there was a pot farm a few blocks from their house.”
“Some people do find it very offensive, and it’s important to educate them that we’re good businesspeople and that we’re setting up legitimate businesses,” she says.
Barnette says although there’s a steady march to repeal prohibition, “there’s still a significant level of taboo, and it’s important at all times to be aware of that. We have to be aware that not everyone everywhere utilizes cannabis.”
5 Consider Investing in Technology
As commercial cannabis growers ramp up production, some are turning to technologies and equipment that save valuable staff and production time, that make products more consistent, and that also save them money.
Artifact Nursery’s owners say that they recently decided to push the technological envelop by turning to LED lights for the company’s clone-producing mother plants, which require more than 15 hours of light each day to be arrested in a vegetative state. The gamble has paid off, Westbrook says, and the nursery now uses 80 percent less electricity than it did previously.
Cullen says one piece of machinery that’s been invaluable is an electric Twister trimmer for some products — “a godsend,” he says.
An “Agritech” computer helps mix nutrients for different plant rooms, and monitors temperature and other environmental parameters.
6. Gather the Right Team and Help Your Workforce Grow
Lord says he fired many of LivWell’s original employees, finding they fancied themselves master growers and artists rather than industrial farm workers.
David Bonvillain, founder and CEO of Elite Cannabis Enterprises in Colorado, says he has seen this more often than he would like in the industry. “The delusion of grandeur just because you grow an agriculture crop is insanity and needs to be stomped out,” he says. “Nobody else but cannabis cultivators see themselves as some gift from above. They all need to spend a six-month tour-of-duty in a four-acre production tomato greenhouse with the teams in there grinding all day, every day and get a reality check on what this is about to be like for them.”
As a solution, Lord says that he now works to educate his employees and provide them a career path, with an eye toward retaining talent.
The staff generally starts off as trimmers, about 70 of them working the field currently, and after a while it becomes clear whether they have the desire and skill to move forward, Lord says. If they stick around, they have a 401K plan and opportunities for growth.
“We put them through training and get them to understand there are probably 1,000 ways to grow cannabis, but we’ve chosen one, and you will follow that regardless of your personal preference,” he says.
Several PhD holders and botanists are on staff, Lord says, and the company works to ensure they, too, grow in knowledge. Seven members of the company’s research and development team traveled to Panama last year for a large agricultural conference.
“We’re not going to find the answers within the cannabis world,” he says. “It’s going to come from high-tech agriculture. We’ve exceed the knowledge base by a long way.”
Bonvillain suggests that if you want to be a truly qualified expert, “Get a degree or the equivalent through work/life experience. Be the very best at your craft. Learn everything possible. A ‘master grower’ should know every methodology, every style, everything about the plant from the cell structure to growing mediums (all of them) to [integrated pest management] strategies, as well as have a comprehensive knowledge set on what does what within those strategies.
“They should understand the fundamentals of planning and supply chain, the cost of goods sold,” he says, “all the way through the tiers of costs. And they should understand personnel management and control/compliance documentation procedures and interpersonal communication skills,” he says.
Cooper says Monkey Grass Farms similarly had to weed through employees, but that there remains a core team that feels it’s progressing together. Among the businesses’ important hires were an operations manager and someone who ensures strict compliance with regulations.
“We’ve found some very loyal employees. They’ve been growing with us, and we’re hiring consultants to educate them,” she says.
Cullen, meanwhile, has found investing in a solid bookkeeper and a chief operations officer essential to success. A federally illegal business can’t be too careful, and a large grower can’t do everything themselves, he notes.
7. Consider Certification
While growers can’t call themselves organic, a federally regulated term, they can choose third-party certifications that at least verify their practices.
Artifact Nursery sees their “Clean Green” certification as a reflection of their values, but also sees it as useful in attracting customers. “Some people really care about what you’re using on their product,” Westbrook says. “You get the whole gamut of people with different moral imperatives and concerns.”
Colorado Harvest Company’s Tim Cullen found investing in a solid bookkeeper and COO essential to success.
Other certifications exist, such as the Patient Focused Certification (PFC), established by Americans for Safe Access, one of the nation’s largest medical marijuana advocacy groups.
The PFC program applies standards backed by compliance inspections, staff training and an independent consumer complaint process, giving dispensaries with which growers work a sense of quality assurance. Medical growers, distributors and labs are eligible for the certification.
“Certification from patient-focused organizations using objective criteria can help cannabis farmers establish safe and reasonable industry standards,” says PFC Program Manager Tim Murphy, which also can be useful “as states adopt product safety regulations.”
Lord says he’s not seen the recreational industry turn en masse to non-governmental certifications, at least not yet. Consumers must be able to recognize the meaning of a certification for it to have value, he says.
8. Don’t Try to Do Everything. Focus on What You Do Best
“Far too many groups try to take on too much and frequently don’t have the experience, expertise or bandwidth to do everything well,” says Elite Cannabis’ Bonvillain. “Just because you ‘can’ make a new product (say, a tincture) doesn’t necessarily mean that you should. Many folks fail to consider all facets of product development, packaging, labeling, distribution, customer service, etc.”
If you are going to do it all yourself, he says, “pick the right internal partners for your organization. Otherwise, strategically partner with strong third-party organizations that can complement your capabilities while you complement theirs.”
9. Early Bird Gets the Worm
It’s difficult to know when the moment is right to jump into the cannabis-growing market. Currently, state lines are walls through which locally legal product cannot pass, leaving open the door for would-be cultivators on the other sides of those walls.
“The time is still out there for a lot of people,” says Cullen, who credits his success in part with being among the first to enter Colorado’s medical market, which he did after growing on a small scale for himself and his father following their diagnosis with the same medical condition.
*Editor’s Note: Names have been changed at the interviewees’ request.