When recreational marijuana was legalized in Washington in 2012, the idea to launch a cultivation business triggered Jeremy Moberg’s entrepreneurial spirit. By June 2014, his idea had become a reality, and his business, CannaSol Farms, became one of Washington’s more than 500 licensed producer/processors. Less than a year and a half after it got off the ground, Moberg’s vision had become a million-dollar reality.
CannaSol now ranks 11th in the state among all producer/processors, with total sales revenue of nearly $1.7 million, according to the 502data.com website (the state-run initiative to share marijuana sales and tax revenue figures with the public). Such a ranking is no small feat, considering the stiff competition in The Evergreen State, with the ratio of growers/processors to retailers more than 3 to 1.
“There’s an intense amount of competition just to survive,” says Moberg. This competition can make it difficult for all growers, he says. “People are willing to lose money to gain market share, and that makes it a very difficult operating environment for anybody.”
Like most growers, though, Moberg is passionate about the plant, and this continues to drive him to succeed. “I’ve seen a lot of good it has done for people, for myself, and I just think it’s a great thing for society,” Moberg says. “I think it can replace a lot of Western medicine, a lot of dependency on pharmaceuticals, and I think people are starting to realize that.”
Despite a shared passion for cannabis cultivation, Moberg actually is unlike the vast majority of legal growers in the state—he grows outdoors, under the sun, a rarity among his peers and a process ripe with both disadvantages and what Moberg anticipates will become long-term advantages (for both CannaSol and the planet).
“For all legally grown cannabis in the country, our estimates show that currently less than 5 percent is grown outdoors,” says Nic Easley, CEO of 3C - Comprehensive Cannabis Consulting in Colorado.
The majority of legal marijuana businesses don’t grow outdoors for several reasons, the most prevalent of which is that most state regulations don’t allow it. Washington is the only state that changed its regulations to allow for growing outdoors (with 8-foot fences with view barriers), thanks to Moberg, who, with his friend and political activist Buffalo Mazzetti, lobbied the Washington State Liquor and Cannabis Board to permit outdoor grows. Easley says certain Colorado municipalities, such as Pueblo West, also are beginning to look at sanctioning outdoor grows.
The cannabis culture and its need for secrecy also has, for decades, dictated that growing marijuana is most safely done inside, where no one can see it.
Another reason is that, even in Washington—where sun-growing is permitted—growers are inadvertently incentivized by state regulations to grow indoors. As Moberg explains, licenses for indoor grows cost the same and limit the growers to the same canopy size as licenses for outdoor grows, despite the fact that indoor growers can produce significantly more product by growing year-round. In other words, if you can produce more and make more money growing indoors, few are going to choose the alternative.
“Indoor growers are able to just keep cycling crops through the winter. So those licenses are actually capable of producing more than the sun-grown license,” says Moberg. “The state really should have looked at this difference and created some sort of parity between indoor and outdoor, and, in fact, in Oregon … they’re considering licensing outdoor growers at a higher square footage to equivalent indoor growers to make up for that difference … that the outdoor grower has to deal with winter and shut things down.”
The need for more sustainable practices also is becoming an increasingly significant part of the equation. It’s no secret that cannabis consumption is significantly taxing power grids across the country and contributing to carbon dioxide emissions. As more states legalize cannabis, electric consumption will continue to grow, challenging power companies to keep up with the demand. As demand grows, obviously energy costs will go up as well.
For him, though, the notion of year-round, higher-yield cultivation was not enough to sway his vision for a sun-grown cannabis business. In fact, if anything, it drove Moberg even more to continue the push to develop the sun-grown industry and legislation to support it. In addition to organizing the Okanogan Cannabis Club with Mazzetti to campaign for sun-grown licenses in Washington state before he started his business, he later founded the Washington Sun Growers Industry Association, where he currently serves as president. “We’re collaborating with the Oregon Sun Growers Guild and the Emerald Growers Association in California [now called the California Growers Association] to come up with certification standards for what constitutes sun-grown and environmental sustainability in marijuana production,” Moberg says. “We hope to get standards nailed down and certification beginning hopefully by this year, and if not this year, next.”
High Competition Breeds Sativas
For Moberg, who lives “off the grid” in Eastern Washington, growing outdoors seemed like less of a choice than simply being the only option he saw. “When it comes to winter, winter is winter; you just don’t grow,” he says. “If there’s two feet of snow on the ground, there’s no reason to be producing marijuana. We don’t grow anything else in the winter.”
So, with the disadvantage of having to shut down production through the winter, Moberg has managed to make his business successful. In addition to being one of the top growers in the state, he employs about 30 people right now on his 21,000-square-foot site, he says, and is growing about 180 different strains of cannabis. “About 100 of them are in R&D right now, where I want to grow them … and see if they’re distinctive enough to grow and market on their own,” he explains. “We have about 10 core strains that we’re pretty well-known for, and then we’ve probably got another 40 in production, and the rest are strains we’re looking at in our breeding program.”
CannaSol’s advantage, according to Moberg, is that it sells a premium product, “meaning it has all the things a premium product should have—we use organic nutrients, we do hand-trimming, which is a huge labor expense,” he says. “We actually employ people to sit there with scissors and trim the [plants] down.”
Another competitive advantage and part of the premium nature of the company’s product, says Moberg, is that “CannaSol focuses on sativas, which take longer to grow, and they’re more difficult to grow.”
Sativas also are more expensive to grow, he says. Because sativa strains have a longer growth cycle, indoor growers incur higher electric bills to grow them. Outdoor growers like CannaSol incur additional costs because sativas require light deprivation, Moberg explains. “They also require a bunch of manipulation to grow to a high quality,” he says. “So we’re really trying to create a distinction between the two types of marijuana, where sativa is a more expensive, premium, top-shelf brand. Indica is easier to grow, cheaper to grow and more of a sedative; it’s good for a lot of medical patients.”
While there is a market for both indica and sativa in the state, Moberg says, “There is a consumer demand for sativas that is not being totally met.”
“We’re building our reputation on quality and backing it up with a 100-percent return policy.”
As for whether Moberg can charge more for a more sustainably grown product, the market is not quite there yet, he says. Before marijuana was legal, consumers could never ask the questions about sustainability that they might of food they buy in a supermarket, he says. Since the legal market still is in its infancy, consumers have yet to realize they can “put that same filter on their marijuana purchases,” he explains, “and we’re trying to drive that marketing right now.”
Moberg believes CannaSol is one of the only companies in Washington or Colorado that is driving sustainability as a marketing advantage. But the push, he notes, is made more difficult by “the inertia behind indoor growing in Seattle,” and some lingering misperceptions about indoor- vs. outdoor-grown cannabis. “For so many years, the highest-quality marijuana was considered to be [grown] indoors and, in fact, it was, because the outdoor marijuana was grown in the hills, unattended, not cared for,” he explains. Legalization made it possible for outdoor growers to use the same techniques as indoor growers, leveling the playing field.
Sun-Grown Pest Control
The discussion around sun-grown vs. indoor-grown cannabis brings up not only quality and sustainability questions, however, but also questions about pesticides, according to Moberg. Another common misperception, he explains, is that outdoor grows have a less tightly controlled environment, which can make pest control more difficult. But, in fact, Moberg says, “In indoor grows, you’ve got a homogeneous environment, where once you get some sort of mold or bacteria or bug in there, it goes nuts. So you’ve basically got to throw the book at it in order to keep it at bay; whereas outdoors, you have temperature swings between day and night, ... weather shifts, humidity shifts, seasonal shifts, and those all do a lot to take care of those problems that would creep up if you had an environment that was always 77 degrees and always 60-percent humidity, which is essentially what indoor grows are.”
Of course, indoor growers can apply tactics such as separating crops and using ventilation systems to help stave off crop-destroying molds or bacterias, but it can take a bit of effort to create an environment that is less ideal for these bacteria to grow.
“I’ll run a small greenhouse through the winter to keep my mothers alive for the spring.”
Moberg says CannaSol is able to use the most benign pesticides, when they are even needed. In addition to relying on weather changes to help control pests, Moberg says, “we care for our plants in a way that allows ventilation, and lets the air and nighttime temperatures move through. We have natural wind; wind alone is the biggest benefit to keeping down molds.” As long as you have the air circulation, Moberg notes, the conditions are less favorable for powdery mildew. “Also, the plants dry faster, so they don’t have as high water content on their leaves—which contributes to powdery mildew and molds,” he adds. “I have never had something come through and destroy a crop [outdoors].”
The risk of pests destroying entire crops is what Moberg says drives some growers to use illegal pesticides. “When people are sitting on multimillion-dollar investments and they’ve got powdery mildew or some insect ravaging their business, you can bet they’re going to apply illegal substances to protect that business. In fact, that’s exactly what we saw in Colorado,” he says, referring to recent pesticide tests commissioned by The Denver Post, which revealed that “two tests on concentrated marijuana products sold at one store found levels of three pesticides the state says cannot be used to grow marijuana. … The level for one of the pesticides was six times the maximum amount allowed by the federal government on any food product — and 1,800 times the highest level Denver accepted when it quarantined marijuana plants earlier this year. The pesticides found were myclobutanil, imidacloprid and avermectin,” according to The Post.
Just as Colorado offers a list of pesticides approved for use on marijuana, the Washington State Department of Agriculture (WSDA) and Washington State Liquor and Cannabis Board have developed a list of pesticides that meet WSDA criteria for use on marijuana. The list is referred to as the PICOL list—for the “Pesticide Information Center Online,” a searchable database made available by Washington State University.
Despite what he sees as major benefits of outdoor grows, Moberg worries that “fearful perceptions about marijuana” among some members of the public and some legislators are going to continue to cause legislators to regulate against them. As legalization continues to spread, however, and the product is more accepted by the mainstream and within communities, that will hopefully change, he says, and he’s going to do what he can to help make that happen.
Is It Cheaper to Grow Outdoors?
Moberg explains that growing outdoors can be significantly less expensive than growing indoors or in a greenhouse. (Geography, i.e., a region’s climate, obviously will be an essential consideration in determining the viability of and location for an outdoor grow.)
Electricity rates vary by municipality, but for indoor growers, electricity (and sometimes lighting alone) will comprise at least a third of their total budgets. According to a research paper by Larry Kinney, which was cited in Mills’ “Energy Up in Smoke” report, “indoor greenhouses spend about $5 per square foot per year on energy (at average U.S. energy prices [in 2010]). At those same prices, indoor cannabis is 11-times that number at $55/square foot.” Outdoor electricity costs are negligent, with the sun obviously being the primary source of light.
Moberg says CannaSol uses a small amount of lighting to supplement an otherwise entirely sun-grown operation. “We have to over-winter, which is required to keep clones alive, so I’ll run a small greenhouse through the winter to keep my mothers alive for the spring. I’ll also use a very minimal amount of lighting to supplement in early spring and sometimes late fall,” he explains.
Retails Sales and Maintaining Relationships
With Moberg working to push his sustainability message into a marketplace that may not be as ready to receive it as he would hope, retail sales remain a challenge for him, as they are for all cultivators in the competitive Washington marketplace. Finding retailers, for starters, can be difficult. You can’t see who the retailers are until they’re licensed, he notes, “but you really want to start the conversation before they open their doors and hopefully be in their stores when they open.”
If finding retailers is a challenge, though, “maintaining those relationships is the most difficult thing,” Moberg says. CannaSol does a few things to foster solid relationships. “We have policies to back up our product, so if you send out some product that’s not good (which can happen), we’ll ... replace it,” he explains. “So we’re building our reputation on quality and backing it up with a 100-percent return policy.”
But, again, things come full circle back to sustainability. Moberg hopes the trend he sees starting to happen, where people are going into dispensaries and asking for sun-grown cannabis, will only increase. Until then, Moberg will stand by his belief that cannabis should be grown sustainably. He will continue to advocate for fair regulations for sun-growers, and he will hold out hope that more states will enable outdoor grows and that more growers will be willing to bet their bottom dollar that the sun will come out tomorrow.