Terpenes & Tenacity

Features - Cover Story

Jade Stefano shares the inside story behind Puffin Farm, its competitive edge and push to protect outdoor growers’ future.

February 6, 2018

Photos by Jake Gravbrot

After being one of the first states (along with Oregon and Alaska) to legalize medical marijuana in 1998, after only California (1996), Washington lost control of the reins and could not do anything except witness the development of a highly unregulated cannabis industry. For some, it was a beautiful time; for others, a cutthroat business. But almost everyone was unprepared for what was to come more than a decade later.

When Washington voters passed Initiative 502 in 2012 to legalize recreational cannabis, state regulators made a commitment that everyone who applied and qualified for a producer license would get one, but capped the number of retail licenses. This turned out to be an attempt to bring in the state’s gray market cannabis growers who operated as caregivers with patients registered directly with them.

The result made Washington’s cannabis market unlike any in the country: Licensed growers outnumber dispensaries by a ratio of nearly three to one, according to recent data from 502data.com.

With production outpacing demand, retailers in the Evergreen State rarely worry about a lack of supply. Producers, however, often find themselves scrambling to get their products on store shelves and reducing wholesale prices before their wares become unsellable. Most producers barely turn a profit, and some consider breaking even a good year.

Jade Stefano, owner and operator at Puffin Farm, an outdoor cultivation business on the outskirts of Ellensburg, knows these tribulations all too well. Her operation, situated east of Mt. Rainier, has only closed two months with sales over $100,000, although the company did come near that mark on several occasions, Stefano says.

She says Puffin Farm fluctuates between making a slight profit and breaking even, but adds that, as an outdoor grower, she has advantages over indoor producers. While she might not be able to achieve the manicured look indoor cultivators produce, nor produce the same volume they can in a year, she says she counters that with a cheaper wholesale price from much lower overhead than her indoor competitors, and an increased terpene content that she attributes to her crop surviving outdoor life’s daily stresses.

Puffin Farm dries its harvest on the stalk, cutting plants down just enough that they will fit into drying rooms in the biggest pieces possible.

Surviving the Buyers’ Market

Despite Puffin Farm selling out of its 2016 harvest (with little profit to show), the state’s glut of marijuana has forced Stefano to create ways to supplement income and stand out from the competition. For example, Stefano has brought some high-CBD strains from her days growing medical cannabis in Washington into her regular crop rotation at Puffin Farm. Even before CBD became the fast-growing market segment that it is today, Stefano was busy acquiring dozens of CBD strains, searching for the best phenotypes.

Stefano started growing medical cannabis in Oregon while she was studying biology at Reed College in the late ’90s. After I-502 passed in Washington, she found it important to continue serving the medical market. That dedication to the medical market has helped her get into dispensaries that otherwise would not have given her the time of day. She estimates that Puffin Farm is in up to 10 dispensaries solely because of its 20-to-1 CBD offerings. “Then once they’ve gotten CBD, they also start buying our other things, and … they realize that we grow great cannabis,” she says.

Offering CBD strains has also allowed Stefano to skirt one of the major criticisms against outdoor-grown cannabis, namely that it doesn’t look as nice as indoor or greenhouse-grown flower.

“It’s hard to find a vigorous CBD plant that has a form, a shape, a bud structure that is desirable to the market,” she says, adding that “the CBD market is not as sensitive to bag appeal and the visual appearance” as the rest of the cannabis market.

But while some of her competitors sell CBD products at a premium, Stefano decided early on to stay away from that model. To her, doing that is the equivalent of charging different prices for the same job, and she doesn’t want to make patients who use CBD products pay more for something that they need, she explains.

Last year also saw Puffin Farm grow an autoflowering crop for the first time since it launched in 2014. Stefano sold that crop—roughly 300 to 400 pounds of one strain was harvested in August, before the October harvest for outdoor crops—to processors to turn into extracts. “That has been kind of a bonus crop just to generate some income to help support the farm,” she says.

Autoflower seeds are not light-cycle sensitive and flower within 80 to 90 days. While autoflower crops are a great way to supplement the farm’s income, they typically don’t produce the quality Stefano wants to sell to her customers. No, she wants her customers to be able to enjoy a true outdoor cannabis experience.

Puffin Farm maintains its mothers in climate-controlled greenhouses throughout the year.

The Terpene Factor

For Stefano, the best outdoor crops are filled with great-tasting and smooth-smoking terpenes. To her, it’s a myth that you can’t get the same quality and taste in a crop grown in an uncontrolled environment as you can in an indoor setting.

Terpenes are part of a plant’s defense system as they are natural pesticides and miticides. She’s seen a significant increase in terpene production in her crop “due to the plants being in a more defensive mode because they’re in a natural environment with various stressors. They know they need to produce terpenes to fight off various pests that might be out there.”

Terpenes also act as a communication tool for plants. Terpenes released by a stressed plant warn neighboring plants to prepare for pest or environmental pressures, she says. Compared to their free-range counterparts, indoor- or greenhouse-grown plants are basically coddled because of the lack of environmental stressors such as rain and wind. Those stressors, in addition to helping increase terpene levels, also help keep the plants healthy by stimulating their immune function.

A sample of Puffin Farm’s cold-cured flower.

“It doesn’t rain a lot, but when it does, it washes the plants. And the wind keeps the plants clean, it keeps airflow moving,” which in turn helps combat pest and mold issues, she says, adding that plants affected by spider mites in her nursery greenhouse fare much better once they are moved outdoors. This is due to the environmental fluctuations (such as daily temperature range, humidity, wind and rain) that disturb the pest’s life cycle and predation by other lifeforms. When it comes to pests and mold, nature often helps farmers. “There’s a natural biological ecosystem outside which contains predators and natural forces such as wind, rain and sun that help clear out pests.”

Terpenes are volatile compounds that can be lost by exposure to high temperatures, so Puffin Farm is extremely careful to not damage the terpene content of its various strains during post-harvest and has utilized a slow, “cold-curing” process to maintain terpene levels.

The first part of Puffin Farm’s post-harvest process is to hang the whole plant (or large sections if the whole plant is too big to hang) during the drying stage. The company even leaves most of the fan leaves untouched. The crop is left to dry between two and four weeks in a climate-controlled room at a temperature no higher than 70 degrees Fahrenheit. Once the plants are dried, they are stored and cured in a cooler environment that is maintained around 50 degrees Fahrenheit. “By keeping the temperature as low as possible during drying and cure, you lose less terpenes,” she explains.

The curing rooms are climate controlled for temperature and humidity, but since the product is cured in fall and winter when temperatures are low, air conditioning is not needed. Come spring and summer, however, it is important to keep the curing area cool using air conditioning.

A close-up of one of Stefano’s greenhouse plants

Cold-curing also extends the crop’s storage life, something that is extremely useful when you only harvest once a year. Stefano boasts that Puffin Farm has tested product from its 2016 crop a year after it was harvested and it still showed terpene levels greater than 2 percent. Like tobacco or wine, properly cured cannabis can increase in flavor and quality, she says, and that “by the end of this [process] we have flower that a year later is better than it was at eight weeks post-harvest.”

Stefano admits focusing on terpene-heavy cannabis hasn’t translated to increased sales yet, as vendors and consumers get skittish when they see an older harvest date. “We see that all the time, where certain stores, come summer, will stop buying last year’s crop even though it’s better than it was eight weeks after harvest. But they are just so focused on that harvest date and this idea of freshness that they don’t really get it.”

Stefano participates in vendor days at retail locations and continues to educate consumers and budtenders. While she has seen both groups become more educated over the past three years, she says there is still more work to be done to change the focus from THC levels.

‘Feed the Soil, Not the Plants’

Terpene levels aren’t just a consequence of environmental stressors, but also the nutrients you feed to your crop. For sun-grown cannabis, it’s all about the dirt in which you put your plants. Without good soil, your crop is destined for failure.

Stefano takes an all-natural approach using organic processes. (Puffin Farm is Clean Green Certified, a third-party cannabis certification.) She supplements the environment’s natural microbiology with different guanos, rock dust, worm castings and compost teas made in-house with a 250-gallon compost tea brewer. These natural supplements create the living soil in which her crops thrive. “We feed the soil, and then the soil creates these high-quality plants,” she says.

By using a living soil, Stefano also increases the quality of her soil year-over-year. When the company started in 2014, the soil contained just 1 percent organic matter. Today, that has grown to roughly 5 percent. Not only is this good for producing quality cannabis, she says, but increasing organic carbon content of the soil is an important tool in the fight against climate change and helps reduce water use by increasing the water-holding capacity of the soil.

In addition to the natural amendments Puffin Farm uses, Stefano also plants cover crops like clover, vetch and alfalfa, which increase the soil’s nitrogen content. Those crops “are actually sequestering nitrogen from the atmosphere and bringing it to the soil,” Stefano explains. “When you till them in, all the nitrogen and carbon and organic matter in those plants breaks down and adds to the fertility of the soil. … You’re not stripping the soil, but you’re actually adding more and more organic matter over time.”

Creating a living soil is much more expensive than using chemical fertilizers or pre-mixed nutrients, however. Puffin Farm can spend upwards of $40,000 annually on natural amendments to encourage a healthy soil biology on its 1-acre property. Stefano accepts that cost because it is what will allow the farm to succeed in the long run. The cost will also go down over time, she says. “By growing with living soil, we are actually building organic matter and encouraging a healthy ecosystem in the soil and ensuring long-term viability of the farm.”

Stefano takes a hands-on approach with her business, getting involved in all aspects from cultivating to packaging.

Ensuring the Future of Sun-Grown Cannabis

In addition to all the work she is putting in her farm to ensure her business’s survival, Stefano is fighting to reduce regulatory barriers that keep outdoor growers from being competitive through her role as treasurer of the Washington Sungrowers Industry Association (WSIA), a pro-outdoor cultivation advocacy group founded by CannaSol Farms owner Jeremy Moberg (who was featured in the inaugural issue of Cannabis Business Times in November 2015).

Most notably, the WSIA is working to change the requirement that growers must put the harvest date on packaging going to dispensaries. “That hurts sun growers by having a harvest date for the consumer to fixate on,” she says, adding that most outdoor farmers only do one harvest a year and keep dried cannabis in storage to sell throughout the year.

The WSIA also is battling communities and environmental agencies targeting outdoor cultivation businesses. For example, local clean air agencies are citing outdoor farms for odor violations despite it being impossible for those farms to implement air filtration systems. (Other agricultural businesses are exempt from these complaints thanks to protections offered by Right to Farm laws.) Also, Chelan County, north of Ellensburg, is “forcing all of their sun growers to either move their farms [or] go indoors,” Stefano says, noting that there are nearly 50 farms in that county that are at risk of being pushed out within the next year. “All of these forces, political and otherwise, are making it really difficult to grow in the sun,” she says.

Puffin Farm proudly displays its Clean Green certification on its packaging.

Despite those opposing forces, Stefano is hopeful about the future of sun-grown cannabis because she feels that the WSIA and growers like herself are fighting the good fight, especially when considering the larger carbon footprint that comes with indoor cannabis production. “We are having a climate change crisis right now for the planet. … And we need to reduce carbon consumption by any means necessary,” she says.

One solution she proposes to level the playing field for outdoor growers is to increase canopy limits of outdoor farms. Indoor growers can survive on smaller margins by growing in higher volumes year-round under the same canopy allowance as sun-growers. Whereas an outdoor cultivator might be able to generate $500,000 in revenue on 1-acre, indoor growers can generate $5 million, she says.

Despite the financial and regulatory barriers keeping investors from going all in on sun-grown cannabis, Stefano believes sustainability will eventually become a priority. But much like the federal landscape, if any significant changes are going to happen, it’s most likely going to be through legislation, not regulation.

Brian Maciver is the Associate Editor for Cannabis Business Times