Canopy Growth, the 800 pound gorilla of cannabis, recently furthered its impressive slide into oblivion.  After minting, then ousting the first corporate cannabis billionaire, the global firm announced last week it would shutter approximately half of its cultivation capacity.

Canopy, like others, is realizing that growing weed people actually want to consumer is harder than expected.  As I’ve long argued, with a proliferation of very high THC products like dabs, live rez carts and others, people now know what it’s like to be high.  After consuming hash or ultra high quality cannabis flower, shit weed becomes a real waste of time.  Harsh, flavorless smoke is no longer en vogue and most producers, including those in my beloved Humboldt, are coming up shy of the mark.

Growing truly premium cannabis (not crappy flower placed in pretty packaging) is arduous, and is dependent on genetics, knowledge, process, inputs, and environmental exposure.  Subjecting your plants to more extreme conditions really glosses flowers over.  Operating on a razors edge between spectacular success and utter failure, like mountaintop growers, produces larger glandular trichomes, which in turn house far more cannabinoids.

Mass Corporate failure and increasingly discerning consumer palates have put a lot of wind in the sails of artisanal producers – both small and mid-sized.  Real artisans in my circle of friends garnered fantastic prices for AAA flower this past season and 2020 promises the same.  $1,800-$2,000 deps was a real thing, although the less skilled among us earned a mere $1,200 a unit and are barely hanging on.

The capitalistic fervor that washed large cannabis firms in enormous liquidity is waning fast.  M&A activity has slowed meaningfully, headline deals are falling apart, and firms that were engaging in massive expansions and hiring sprees just one year ago are sending employees packing.  Like the tech bust in 2000, investors now demand more than just acquisition driven earnings growth.  Like other industries, cannabis investors now demand sound execution, coherent business strategies, and profitability.  Huge quarterly losses will no longer cut it…time to put up or shut up, and most firms are struggling in this regard.

As a mid-sized commercial producer with ultra high level farming skills, I’ve never been more confident, or more excited about a year in the dirt.  Prices for the right product are firm and will melt upward in the coming months.  Artisanal producers will continue to clean house and stack solid profits.  Deps with a 2 handle and ins north of 35, while rare, are out there for the taking.  Go get yours!!!

Kindly,

Jesse

Yum

In the legal cannabis markets distributors, retail outlets, value added businesses, and consumers are becoming ever more discerning.  They want quality, consistency, predictability of experience and a fair price.  On the cultivation side where I focus my professional attention, having a proven, written process to guide the cultivation journey from beginning to end is a must.  The transferability of this process helps you scale your business, empower employees to function at a high level, and helps drive the quality and consistency purchasers and end users demand.   This piece shares an overview of my core philosophy for competing in an increasingly crowded cultivation space and will be followed by 4 subsequent posts that will outline my process for farming ultra high end flower in detail. 

Core Philosophy

• Given equal or similar genetics, growing highly differentiated cannabis flower is arduous and is largely dependent on knowledge, experience, resources, process, and environmental exposure.

• Producing top shelf, differentiated flower requires sound infrastructure and a winning, start to finish farming process that differs from mainstream commercial production in some key way(s). 

• The repeatability and transferability of your farming systems and processes drive enterprise value and facilitate business expansion.   They must be documented in detail.

• Indoor, light deprivation and term cultivation at scale all offer ripe opportunity for product differentiation and branding.  In terms of light dep, for example, an overall lack of attention to plant structure, preventative maintenance, terpene retention, and visual appeal of finished flower currently offer significant opportunity for brand creation and strength.

• All else equal, you finish as you start in cannabis farming.  As such, the vegetative cycle is of paramount importance and should warrant significant resources.  Special attention to plant vigor, health, structure, terp content and root development early on serve as the enabling factors in the quest for high end, high value flower production.

As someone who has engaged dozens of commercial cannabis farmers through my financial consulting platform and my own work as a farmer, it’s become clear that many smaller operations could benefit from professionalizing and formalizing their operations.

For decades farming cannabis profitably and illicitly in the more permissive states was relatively easy.  Because of this, operators never had to bother with many of the business planning functions so common to other industries.  Things like business plans, mission and vision statements, target markets and product offerings weren’t really on the minds of folks operating in the space.  Rather than trouble with such unnecessary things one could buy rural land on the cheap, grow tons of crappy weed, sell it for high prices, and earn a marvelous living.  There was work involved and risk of incarceration and theft were real, but it didn’t take a rocket scientist to be successful.

Now that billions of dollars are flooding into the industry, competition is fierce and farmers must become astute businesspeople if they want to survive.  They must formalize and professionalize their operations to find lasting success.  The first step in this process is creating a written business plan to help guide the operation forth with clarity.  The second is creating an operations plan that guides day to day workflow in an effort to control quality, improve outcomes and generate the consistency necessary to build a successful brand and attract capital.

A business plan doesn’t have to be intimidating. It can actually be a real joy to create, especially for those who truly love farming cannabis and competing in the nation’s fastest growing industry.  It’s your chance to be creative and identify how you want to operate and where you want your business to go. 

When creating your business plan you must first describe your company in detail.  Things like your vision, mission, and value proposition are included here.  What problems are you trying to solve?  What market needs are you attempting to meet and why/how can you meet them better than others?  What do you hope to achieve with your business, in other words, what is its meaning and purpose?

Your plan should also include a market analysis.  Many use a SWOT analysis here that outlines your specific strengths and weaknesses as well as opportunities and threats facing you.  In the case of cannabis a market analysis should talk about increasing social normalization and competition, changing consumer needs and preferences, product proliferation, price action, and a developing national and global marketplace among other things.

The business plan should also detail your company’s organizational structure.  What type of entity are you, a corporation, an LLC, other?  How about the structure in terms of employees, management, and outsourcing of critical business functions?

Product focus and marketing/sales are often the bread and butter of the business plan.  Are you competing for shelf space with high end flower, seeking celebrity endorsements, or growing biomass for extractors and other value added participants in the supply chain?  Are you focused on cannabis as a medicinal, lifestyle or recreational product, or something else?  How will you get your product to market?  What distribution platforms will you use and will they provide acceptable sales velocity and revenue?  How does your operation help distributors fulfill the needs of their customers and do you fulfill them better than others?

A natural offshoot from this section of the business plan is financials.  Using reasonable figures for production, prices garnered for product, and a detailed breakdown of costs, how do things pencil out?  At what point during the year will you break even?  How much must you set aside post harvest to fund the following season’s operation?  How profitable is your business?  What changes can be made to improve financial performance?

When complete, you will be proud of the plan created.  It will guide your organization forward and can always be adjusted as needed.  Once commercial lending finds the cannabis space and as mergers and acquisitions pick up steam in the coming years, having a sound plan and a proven track record of success will show your professionalism and help you stand out from the crowd.

An operations plan is also critical to your ongoing success in the increasingly competitive cannabis farming space.  This plan should outline your farming process in exceptional detail.  Everything you do to create product, from start to finish, must be written down.  This not only helps improve consistency and predictability, but also allows you to transfer your knowledge efficiently to workers or potential suitors.  I personally use a weekly calendar that documents all necessary tasks all season long.  I build the calendar each Sunday and actually enjoy the process as it clears my head and allows me to farm more confidently than I otherwise would.  It is enormously beneficial in terms of dictating workflow, improving efficiency, and creating accountability.  Was the work done or not?  If not, why not?  Calendaring helps avoid distraction and helps prevent overlooking important details.   Many farmers are paranoid about documenting their “trade secrets” and workflow, but failing to do so will inhibit your ability to scale or grow your operation.  Transferability of your winning systems will help drive enterprise value and will become increasingly valuable in a growing marketplace dominated by M&A.

 While somewhat time consuming, professionalizing and formalizing your operation is a must.  Failing to do so, I argue, will only hasten your demise and facilitate the transfer of wealth from your pocket to larger corporate interests.

All the best,

Jesse Duncan   

As I’ve shared in other posts, the operating environment for cannabis farmers is challenging.  It also offers significant opportunity for astute, highly skilled operators.

It’s no surprise that competition in the space is increasingly rapidly.  An estimated $18.5 billion was raised in the industry last year alone and I expect 2019 will surpass that figure significantly as corporate interests eye their prize and as social acceptance globally continues to improve.   According to data provided by Veridian Capital Advisors, U.S firms have already raised over $3 billion as of early March, most notably a $1.6 Billion investment by Altria in a Canadian firm.

 As with any industry, increased competition drives margins lower.  Excess “rents” or profits go away quickly as we have seen with flower and distillate prices.  Less efficient, lower quality market participants go out of business or are swallowed up by someone better if they’re lucky.  Such is the capitalistic paradigm.  As we have seen to the north and to the east, mom and pop operators struggle to find a lasting foothold when things get tough.

Another challenge for farmers is price volatility.  Throughout the year cannabis prices swing quite significantly based on supply and demand.  Late spring and summer see the firmest prices, but few small producers are able to hold out that long without getting paid.  Many are forced to “dump” product at low prices in the fall and winter in order to make land payments, pay employees, and support their own lifestyle.  Skilled growers with desirable product, though, can use developing forward markets to improve certainty.  These contractual arrangements lock in prices pre-harvest and are a nice tool to consider if more predictable cash flow is desired.

Farmers are also challenged by the relationship between demand, scarcity and input prices.  On a local level here in Humboldt for example, increased demand for services like consultants and well contractors has led to upward price pressure and significant delays in availability of service.

Theft and fraud also challenge the farming landscape as does the “milk the cow” mentality many have when serving the industry.  I’ve heard several lines of business such as construction, consultancy services, landlords and others speak blatantly about “dope grower” rates that can tack on 50-100% or more on service fees normally charged to other customers.  Because everyone assumes growers are shitting money, they knowingly and willingly feed at the trough with exorbitant prices.  As one alleged insurance scandal recently showed, some desperate to fill their own coffers are not afraid to steal from farming operations.

Taxation, fees, and a constantly changing regulatory background also complicate things for farmers who have less time to spend on admin.  With the piecemeal and fragmented regulatory environment in California, moving compliance hurdles are simply too much for some to bear.

Despite a host of challenges, significant opportunity also awaits cannabis farmers.  For the first time ever, farms can create a brand and proudly tell their story to the world via social media and some advertising outlets.  Through quality, differentiation, authenticity, and story-telling, farms of all sizes can connect with a consumer base in an intimate way.  Awards, accolades, product mentions, interviews, print media, and instructional videos are just a few ways to get your farm on the map and your product on dispensary shelves.

Product diversification also offers many viable outlets for farms to investigate.  CBD, raw acids, extracts, breeding, tourism, and nursery operations are just a few areas you can explore to find a market for your product.

Information and technology advancements also offer opportunity for farms to get educated and improve the efficiency of their operations.  Technological advancements can improve farm output and quality while information platforms like Green Flower Media, cannabisbenchmarks.com, Cannabis Business Times, and Marijuana Business Daily can help farmers understand business trends, pricing, and other pertinent industry data.

Farmers also have a huge opportunity in helping to further professionalize and legitimize the industry.  Thru compliance, stewardship, compassion, and charity, farmers can position themselves well to capture business from conscientious consumers, while playing a role in facilitating the push to create safe, barrier free cannabis access worldwide.  In so doing, they can capitalize on ever increasing markets while making lasting social and environmental improvements through their work and charitable efforts.

All the best,

Jesse Duncan

The cannabis business is tough.  Competition is increasing, consumers are demanding higher quality products, and prices are falling significantly.  Many operations are struggling with sales velocity, compliance costs are rising, and with new tax, labor, environmental, and regulatory requirements, many operating in the farming space are failing, fast.

This piece will summarize an oral presentation I give designed to help farmers achieve financial success despite the challenges listed above.  This 9 point plan, if taken seriously and executed well, can help you not only survive, but thrive in what promises to be an increasingly crowded space.  Subsequent posts will flush out these topics in greater detail.

1. Understand the Operating Environment – the farming space entails significant risk, but offers significant opportunity as well.
2. Conduct a Feasibility Study – given your skill set, expenses and production parameters, can you operate in the new financial paradigm?
3. Professionalize and Formalize Your Operation – Create your mission and vision statements, and determine your target market and product offering appropriately
4. Focus on the Profit Function – Clearly understand revenue and costs
5. Understand Developing Resources & Stay Connected and Informed – Get plugged into industry data and developing resources
6. Work Smarter (and maybe harder too) – Create farming and business systems and put in the time necessary to be successful
7. Be Thankful and Honor The Plant – Working with the plant is a blessing, remember that always and behave according
8. Care For Yourself Physically and Mentally – Farming cannabis is not for the feint at heart, physical and mental strength are important for longevity and success
9. Manage Business and Personal Finances Prudently – Solidify company financials and undergo a personal financial planning process as well

It’s estimated that 9% of those who use cannabis regularly will develop some level of physical dependence or addiction to it. For alcohol and harder drugs, the number is closer to 20%. As an avid fan of cannabis and a professional farmer myself, I wish I wasn’t in that camp, but I am.

I remember first coming to terms with my cannabis addiction at age 17. It was during my senior year of high school, approximately two years after using for the first time, that I began needing cannabis to get my day going. All my friends “waked and baked,” but I was the only one who became anxious and nauseous without it.

I pleaded with my folks to purchase me enough grass each week so I could stay focused on school and sports, but the concept of “functional” addiction was lost on them, despite that being their personal m.o. As a result, cannabis became quite disruptive until age 20 when I met a few grower buddies who would keep me in product at no cost. I subsequently entered college and earned straight A’s throughout two undergraduate degrees and an MBA while using copiously.

The current literature on cannabis addiction tends to downplay its severity. Cannabis withdrawal has been compared to quitting coffee and is normally associated with loss of appetite, moodiness, and trouble sleeping.

Having experienced cannabis withdrawal five times over the past two and a half decades, each experience was much more severe for me. Despite a weaning off period where I decreased my use for a couple weeks prior to abstinence, each episode was both trying and disruptive. When I stop using, I don’t sleep for the first two or three days. I have severe nausea and anxiety and lose approximately ten pounds due to loss of appetite and occasional vomiting. Sensory overwhelm is near constant and I simply need to be alone as conversation and work are just too much. After seven days or so I become more human, but am plagued by nightmares for several weeks following.

While I consider myself the exception, not the rule, I can strongly attest to the fact that cannabis addiction and withdrawal are real. Because I believe addiction is hereditary or genetic at some level, I encourage those with serious family histories of addiction to tread cautiously when considering whether or not to use cannabis. I share with my children that they got a crappy roll of the dice in relation to substance abuse proclivity, so advocate they abstain from recreational use. I’m a strong advocate for medicinal use regardless of patient age, but have shared the risks for my kids outweigh potential benefits as far as adult use is concerned.

For those struggling with cannabis addiction I recommend first changing your method of consumption to break the habitual side of things. I also advocate for a reduction in use prior to going cold turkey. Chamomile tea, ginger ale, easily digested foods, and in severe cases, sedatives can help you through the temporary, but very uncomfortable adjustment your body makes. Share your experience with family and friends and try to stay away from others who use for a few weeks while you build resolve and start feeling better.

The good news is that after going through withdrawal, I feel great on the other side. Energy levels improve, strength and fitness (despite a very active using lifestyle) improve, as does my physical appearance, especially a reduction in eye circles. I tend to become more optimistic, more outgoing and more social as well.

While cannabis tends to enhance my empathy and creativity while reducing headaches and chronic pain, withdrawing from what I largely consider to be a life saving and life improving substance is important for me every several years. It allows me to sort of reset or recenter myself and often allows for different perspective and improved levels of interpersonal relationship.

Conversely if and when I become too self centered, too hard working, too moody, or just not quite at ease with myself or the world, returning to cannabis can also have very similar positive impacts, at least for a time.

Kindly,

Jesse Duncan

Cannabis use is on the rise globally.  Interestingly, baby boomers and women make up the fastest growing segments of the market.  Whether seeking relief from pain, menopause, stress, or a host of other ailments, individuals across the world are increasingly seeking cannabis as a form of medicine or as a recreational tool.  Because the industry is rapidly evolving, a plethora of new products are now available to consumers.  This piece will touch on different methods of consuming cannabis so that you can make a more informed choice about what works best for you.

For more information on this topic or to learn more about growing cannabis and the industry at large, I strongly encourage you to check out Green Flower Media.  I recently took the Cannabis Fundamentals Course through their online Academy and was amazed at how much I learned about this topic and others, even as a professional in the industry.

Smoking or inhaling cannabis is what traditionally comes to mind when thinking about weed.  Inhaled cannabis is enjoyed by many as their preferred method of consumption.  Cannabis can taste really amazing and many folks simply enjoy firing up a bowl or a joint.  The process can become somewhat ritualistic and for me personally, I always derived satisfaction from handling the flower, smelling it, putting it in my pipe and watching it burn.  Many also prefer the effects of inhaled cannabis as it hits you really quickly, often on the exhale for strong flower and extracts.  Effects tend to last from 1-3 hours for experienced users, longer for newcomers.

Smoking though, isn’t the healthiest of activities.  Cannabis burns hot and can be irritating to the throat.  Some research also shows that compounds found in cannabis can become carcinogenic when heated.  While no direct causal link has been found between cannabis smoke and cancer diagnosis, the plant does contain certain chemicals deemed harmful.  Smoking cannabis also produces a very strong odor that some find offensive and smoking is also a terribly inefficient way to get cannabinoids into your system.  50% of the active compounds are lost directly to flame, and another perhaps 20% are lost upon exhale.

Vaporizing is another form of inhaled cannabis that more and more consumers are adopting.  When vaporizing at lower heat, plant resins and oils melt without burning plant material and without allowing tars and burning embers to enter your mouth.  Because vape devices burn at lower temperatures, fewer potential carcinogens are associated with this method.  This method is also essentially odorless and can be a very discrete way of consuming.  Vaping is also a far more efficient way to consume cannabis that preserves over twice as many cannabinoids as smoking.

Caution must be taken though.  Vaporizing, especially cannabis oils, can be a very powerful delivery method not suitable for novice users.  Additionally, research is now showing that not all vape devices are created equal.  Some include metal alloys and plastics inappropriate for heating, and some cartridges have shown to contain other contaminants as well.  Using high quality devices with medical grade inputs is important.

Edibles refer to cannabis products that we eat.  Because smoking is associated with certain social stigma and heath concerns, many find edibles to be an appropriate alternative.  Unlike inhaled cannabis which goes directly to the central nervous system, edibles must be digested by the stomach and metabolized in the liver before effects are felt.  As such, depending on your metabolism and what’s in your stomach at the time of consumption, the onset of effects can take between 30 minutes and 2 hours. A plethora of products are coming to market and I personally find that those made with distillate (an odorless, tasteless substance) are the most enjoyable as some foods have a strong cannabis taste…most pronounced in chocolates I find.  The effect of edibles lasts quite a while, up to 6-8 hours for some, longer for the less experienced or if a very high dose is taken.  Those with chronic pain and sleep issues find a nighttime edible to be very beneficial.

Edibles are stronger than inhaled forms of cannabis and need to approached cautiously.  I overshot one time on a brownie.  Damn thing tasted like ganja sludge and I frankly should have known better.  I got sick, was an odd sort of green/yellow for several hours, and the effect lasted all day.  When edibles are broken down by the body the THC (active ingredient that gets you high) converts to a stronger form which explains the increased potency.  I have also heard several stories of children and pets accidentally consuming edibles, so for those with families, extreme precaution must be taken to keep products safe, secure, and away from unwanted hands (or paws).

Tinctures are cannabis infused liquids made from alcohol or oils most generally.  Tinctures are designed to be used under the tongue and are administered with a dropper.  With this sublingual delivery, active compounds enter the bloodstream and the onset of effect is much quicker.  Duration tends to be around several hours. Were you to swallow the tincture instead, it would essentially become an edible with slower onset.

I enjoy the effect of tinctures but have found homemade versions disgusting as I don’t like the taste of alcohol or oil.  For many though, this discrete form of consumption is a go to method.

Topicals are another interesting method of consuming cannabis.  Creams and salves are becoming increasingly available and with this method, cannabis will not show up on drug screening tests if that’s a concern for you.  Topicals are being used for skin beautification, localized pain management and therapeutic massage namely.  This method of consumption will not get you high and has a relatively rapid onset of effects around 30 minutes.  Duration tends to be around 2-4 hours.  Like all things, specifics matter.  Understanding how much active ingredient is in each product is important and will indicate how much relative value a product has.

Transdermal Patches, akin to a nicotine patch, are growing in interest and availability.  With a patch, medicine is released slowly, providing ongoing relief for those who need it.  It’s important to note that unlike salves or balms, a transdermal patch will show up on drug screens. 

Because deliver of active compounds can be somewhat limited through a patch, they should be placed on venous tissue where there is less fat and softer skin.  Research is underway in this area to improve delivery, so we can expect to see further developments in months and years to come.

Raw Cannabis is being labeled as a super food by some in the industry.  Cannabis acids like CBDa and THCa are available in raw plant material that has not been heated, so folks usually juice cannabis or eat it as an ingredient in salads.  Full of antioxidants, omega’s and amino acids, raw acids have been shown to improve immune function and serve as anti inflammatories.  Raw consumption is non-psychoactive so it will not get you high. Cannabis trichomes can be a bit hard to digest, so some practitioners recommend eating only immature cannabis leaves, while others believe that eating both leaves and flowers is the way to go.  Raw cannabis can also taste bitter, so complimenting with another tasty fruit or vegetable can make your experience more enjoyable.  

Jesse Duncan

Having spent a fair amount of time in conversation with both white and black market purchasers of the discerning kind, I’ve learned a bit about what constitutes top shelf flower.  Many farmers believe (d) that if it gets you high, it’s good stuff.  Not the case, at least not on the West Coast.

Top shelf cannabis flower is large, chunky, naked, white, stinky, potent, and consistent to the extent possible for your grow type and level of environmental control.

As I look around at farmer friends and consulting clients in total desperation, I feel sad.  Good friends who made a great living for decades are being upended quickly.  Many who thought they were good growers are learning (far too slowly and begrudgingly) that such is not the case.

As market demands and competition intensify amid a proliferation of indoor and greenhouse flower and amid increasingly availability of extracts and derived products, much of our Humboldt County sungrown flower – even light dep – is failing to impress.  Outdoor is now largely treated as “biomass” and the type of market flower largely produced in Humboldt across all grow types currently is commanding very low prices…go out of business type prices for smaller, poorer, and less efficient operators.  While some white and black market trades are still very firm for the highly skilled, average prices are falling fast, down significantly over the last 14 months after tanking the year before.  What was once considered killer stuff is now relatively leafy, larfy, and twiggy in relation to expertly grown outdoor, much less greenhouse or indoor flower where tremendous capital inflows now support operations of both scale and reasonable quality.

Because the definition of good flower seems lost on so many who are failing, it seemed warranted to pen a few words on the subject.  For flower sales, the market tends to want them big and showcasey…one bud or partial bud eights have more bag appeal and illicit a more wow type experience to discerning consumers.  If your flowers are small (which most are), learn about plant manipulation, living soil, organic feed regimens, and pest prevention.

Flowers should also be chunky, that is filled out and podded out versus the hollow and hairy flower now dominating our local scene.  If your flowers are failing in this area, learn to thin and learn about organic finishers.

Flowers should be trimmed naked, that is leafless.  What should remain is a solid bud structure, with contour.  This will only be accomplished through the use of skilled, human trimmers that care about the plant and the beauty of their work.

Flowers (regardless of the strain and its particular color profile) should appear white because they are completely caked with outer trichomes.  If not, check environmental exposure like temperature, humidity and UV.  Learn about phosphorus loaded garbage weed and think natural in your approach.

Flowers should be stinky, really stinky.  Your buds should be so terped out they cause mild nausea, dizziness or sensory overwhelm with prolonged exposure…say in an enclosed harvest or drying area.  Learn about artful stressing, terpene production and retention, organic feed, and lower and slower drying and curing processes.

Flowers, in order to compete with the effects of oil and extracts, should also be potent. Rampant and rapidly growing demand for hash shows demand for potency.  Many distributors won’t even purchase flower testing below 20% THC, so the trend for high powered products seems increasingly entrenched.  Use known, clean genetics of exceptional quality and grow them with extreme love and care and this should not be a problem.

To the extent possible, flowers should also be consistent.  While your early versus late run dep may well boast different characteristics and color profiles, your flower should be identifiable as your flower…uniquely awesome, delicious, and profitable, not because you say so, but because the market does.  For those looking to have staying power or to build a brand, differentiation matters and most farmers assume growing a unique strain is enough…it’s not.  Your finished product must be truly exceptional to compete in the flower market, which many argue is going away quickly. If you are struggling with consistency, seek to implement tighter environmental controls to the extent possible for your grow type.  Work with clone stock or sifted seed stock and implement a sound, repeatable, written farming process to increase predictability of outcome and improve overall business results.

I recently watched a piece by Mr. Steve DeAngelo from Harborside while taking a course through the Academy at Green Flower Media (which I highly recommend to those wanting to learn more about cannabis).  He noted that sales of oil and extracts were less than ten percent of their business just a few years ago.    The number is around 30% now and he joked that in another ten years, only old geezers like him would be purchasing flower in a very small corner of their dispensing facility.  You getting it?

Growing top shelf cannabis, the only kind of retail flower the market really wants anymore, isn’t all that complicated. It’s work.  That’s the problem for most.  On many “farms” it seems the plants are actually an afterthought.  Lots of attention is paid to infrastructure and farm operations, while plants, especially in the light dep space, receive amazing little attention other than keeping them alive.  Plants are often force fed and perhaps blasted a few times for bugs or pathogens, but that’s about the extent of things.  Some work is done each day, but the loving and meticulous details required to produce stellar cannabis go overlooked.

Many term grows are no different.  Plants are so big and unruly that broken down flower from 8-14 pound monsters often has little bag appeal.  Even leg sized colas tend to end up spongy as few actually rock them up for fear of bud rot.  It’s hard to maintenance spray really tall plants so many have festering bug problems that bronze flowers and lead to looser buds with funky odor.  While strict organic and “no spray” regimens can be effective, they are generally not full proof and have been shown to be less successful over larger operations.

At the end of the day we now produce a lot of crappy weed in Humboldt County and the broader Emerald Triangle.  It’s time we step up.  Rather than try to convince people of the quality of our product thru hype and marketing, it’s time to let the flower do the talking.  When buyers audibly gasp when seeing and smelling your product, you’re getting somewhere.  Even then you might not fetch the exact ticket you desire, but at least your stuff will sell, fast.  Average white market transactions are now just over three pounds a shot according to cannabisbenchmarks.  Distributors (like end consumers) are searching for that magic bullet, and they now have plenty of product to shop.   But trust me when they find the right stuff, they scoop it up fast.  Not to toot my own horn, but this past year’s product of mine was being requested in fifty pound lots and I could have moved boatloads more than produced.

Instead of growing pinner, poisonous, sterile shitweed, we must return to artisanal production more in line with market needs.  We can and must do better in order to maintain relevance and capitalize on the nation’s fastest growing industry.

Jesse Duncan

OG Kush is, arguably the queen of the NorCal and US cannabis scenes…at least as far as the illicit market is concerned.  In terms of market recognition, flower beauty and structure, aroma, taste, effect, price, sales velocity and yield, no other strain is her equal.   

As a habitual smoker since my teen years in 1992 I’m a huge fan of old school skunk, trainwreck and white strains.  That said, nothing compares to a bowl of fresh SFV OG topped with its own dry sift.  For me personally, not even the most exquisite live rez dab rivals the flavor and effect of this combo when grown exceptionally well.  As such, SFV OG, Lemon Larry, Ghost, or the traditional herself are my very favorite strains to grow.  In terms of producing showcase retail flower and creating exceptional economic value, core OG Kush phenotypes are also a complete joy to farm.

While simple to grow like all cannabis plants (give them what they want when they want it), OG’s are finicky, they attract significant predation, and they don’t boast of the strongest epidural layer.  Combined with relatively poor farming skills, this combination has led to enormous amounts of shit weed coming out of Humboldt County.  Many growers, hobbyist, professional and commercial alike, produce tremendously small, twiggy, sterile, and ugly OG that ultimately gets dumped for bottom dollar.

Seed stock OG’s are not the real deal in terms of nose or bag appeal and leave middlemen and buyers exasperated as people run to hell and back trying to fill a couple box order.  I recently heard of an illicit market showing where of the 1,000 units requested, 2 of the 700 pounds located by my friend were actually purchased.

Humboldt, you are screwing up big time.  Both white and black markets want OG, and we have largely proven inadequacy in terms of meeting market demand.

With burgeoning supply of decent OG’s coming out of the central valley and elsewhere, and with ever more white market distribution platforms coming on line, not as many people need to trek to our neck of the woods for product.  To the extent that finding good OG in Humboldt continues to be nearly impossible (yes I know there’s tens of thousands of pounds of last year’s product floating around), folks will simply go elsewhere to purchase.

Finding OG with predictable quality at acceptable volume and price is not a task for the faint at heart.   Friends of mine scramble to hell and back, rounding up dozens of samples – at multiple price points – to be rejected far, far more than not.

Buyers want large, chunky, stinky, naked, lime colored OG’s that appear white given their magnificent outer trichome layer.  OG should get you high every hit on the exhale, and it should taste like candy and go down smooth as it annihilates you.  While high levels of limonene (like in the SFV) can be harsh for some users, well done organic OG will require little nitrogen masking and should be both smooth and tasty…even just days into drying.

Because many buyers are failing to find good OG in Humboldt and can find shitloads of decent product elsewhere, our weed market is in big, big trouble.  Many I know have even quit trying to farm OG and are opting for something less desirable they feel is easier to work with. Ouch!

In the midst of what promises to be a painful economic collapse for Humboldt and the larger Emerald Triangle, few growers I know are putting the puzzle together.  They feel picked on, scared, and angry, and many are whining like little kids while harkening back to the glory days in conversation. Instead of getting real with themselves and honing their skills, many have become bitter and have shown their true lack of professionalism, determination, and grit.  Some blame politics and corporations, while none I know, at least publicly, blame their own incompetence or inability to dance successfully with the most desirable strain in the marketplace.

My advice to growers in Humboldt is to learn how to grow OG Kush and other “sensitive cultivars” at a very high level.  Don’t grow some bullshit seed stock or bogus pheno with the wrong nose and wrong bag appeal.  Grow one of the core phenotypes mentioned previously or something else absolutely, unequivocally, and universally accepted by buyers, farmers, and consumers as the real deal.

And chill the hell out.  G’s like it easy, like a nice day on the ocean.  Find the steep hill video of a phosphorus loaded, red dogged piece of shit of a nug representative of much market OG, versus the more natural and spectacularly beautiful chunk to its side.  Also stop being lazy and start working with your damn plants.  If you want to sell outdoor flower, it better not look like it.  And no, your dep probably doesn’t look anything like indoor either.  Slam the energy down on em thru manipulation, drive it back up in transition with thinning, and keep the bugs and pathogens away.  You will have predictably huge, chunky, heavy, beautiful OG buds more representative of the weed that made Humboldt famous before tens of thousands of us were playing the game.

If Humboldt could truly bring the magic back in terms of actually producing marketable flower, things wouldn’t tank quite as fast.  The tremendously painful economic realignment we are just now facing would be lessened to some extent and our reputation would start clawing its way out of the gutter. 

Because we were largely secluded and because many us of grew the best stuff out of our friend groups, we became overconfident and arrogant.  We thought we actually grew good weed, which was a faulty premise for most operating in the space.

The reason Oregon craft farmers are now failing en masse is because they aren’t and never were craft producers.  Their weed is shit, or marginal at best, which is not much of a selling proposition these days.  Same story here in Humboldt and elsewhere in the triangle… too many who are all bark and no bite.

Larfy, twiggy, moderately frosty outdoor with poor structure, mixed phenotypes and questionable nose is no longer in vogue.  Outdoor makes up approximately 20% of the white market by transaction and prices are now averaging around $650 a pound nationwide.  What the less skilled hate to accept though is that the current range for outdoor flower is from $300-$1700 according to data from cannabisbenchmarks.  Somewhere the Jedi knights of cannabis are crushing it, as are some white market indoor operators garnering $2,500 a unit versus an average a grand cheaper.  The lesson is clear – the market has segmented and will continue to do so.  Market weed is essentially worthless and will drive the small operators producing it out of business in short order…it already is.  For fantastic producers, opportunity is abound, at least for now.  Many will be coming for that prize though, so be prepared and keep grinding.

Execute daily, stay true to your process and above all, keep rocking that stellar OG Kush.

Jesse Duncan

Becoming obsolete is no fun…in fact it sucks. It tends to make you grumpy, and fearful, and less fun to be around.

In capitalistic America though, economic obsolescence is constant.  As technology, demographics, consumer preference, political leanings, regulations, and innovation continually alter the competitive landscape, some within the economy win while others lose.  In advanced economies like ours, it seems that some win big, while most don’t.

As is often the case nowadays, it is often the smaller, poorer, and less well run operations that go away.  Industry’s emerge, grow and consolidate, often with tremendous rapidity in an interconnected, technological, and highly capitalized world.  While enormous wealth can be made thru the process, it tends to be that wealth ultimately concentrates in the hands of a few.  As a fishing and pot smoking buddy of mine oft notes “if you gave everyone in the world a million bucks, most would be broke in time.”

Such is the case with cannabis.

Mason jar millionaires, of which our and neighboring counties in the triangle rely heavily upon, are getting squeezed – quick.  The smartest among them have seeded multiple enterprises to diversify cash flow, and many have been raising liquidity rather than spending it.  They have become quieter, more resourceful and more margin focused, yet many are still nervous despite high levels of continued economic and business success.  Others are aggressively pursuing white market cannabis activity where there continues to be pockets of pricing strength for the highly adept and highly skilled.

The problem is that not enough of us are making the cut.  Shit weed, the type mostly produced in Humboldt nowadays, is no longer desirable.  Many who thought they knew how to grow are only decent at best.  What many consider to be big, oily, chunky and stoney flowers are actually larfy, leafy, twiggy and sterile in relation to high grade greenhouse or indoor flower.  As someone who has farmed using all three methods, I’ll say it’s tremendously rare to see outdoor or light dep flower that satisfies changing consumer demands.  Flower size and structure, terpene content, outer trichome production and preservation, consistency, visual appeal, potency, color, and flavor are all attributes valued by more discerning users and commercial buyers.  Most stuff around falls far short in several or all of these areas.  The newest trend, putting decent weed in a pretty package and telling people how special it is won’t work either, at least not for long.

We can’t kid ourselves any longer.  Most growers, including the majority of those now holding temporary cultivation permits, were successful, not because of their skill, but because they were operating in a bull market.  Until very recently brown, crappy mountain weed and tiny, mildew infested indoor was selling for thousands a unit…didn’t have to be a real rocket scientist to get a roll going.

Low skilled farmers are now fading fast.  Many are going broke, selling assets or closing shop and selling farms to outsiders with more prowess, deeper pockets and firmer distribution.  High flyers just two years ago, folks dropping 10g’s at the casino in a night are now driving around with smug looks on their faces.  Not so many wide eyed grins or as much bravado as before.  Crazy thing is none (or few) of them saw this coming.  Overconfidence and high levels of cash flow can blind, as many are now learning.

The number of people earning great wages doing scissor work, moving boxes on the side, or picking up labor days at $250 a shot contributed untold millions to the local economy.  What economics shows is that when regular folks like you and I get a little extra dough, we tend to spend it – there’s a consumption effect and a real boost to economic activity.  This is what’s really decimating the broader Humboldt economy.  Less construction, less durable goods orders, less of a lot of stuff.  Even liquor stores are complaining about lost revenue for goodness sake.

As a private financial consultant and a grower myself, all this pains me at some level.  While the arrogance, pollution and violence associated with cannabis production and sales were always repulsive, the huge influx of capital attributed to growers and the teams of people they supported can’t be understated and will be sorely missed. 

While we all know people who are still socking it away, most no longer are.  As the local economy is halved over the coming years, life as we have come to know it will change.  Our homes and land will lose significant value, most non-essential businesses will shut down, and many individuals will up and leave the county altogether.  I expect crime and violence to increase further amid mounting desperation, and this time, I’m hard pressed to see the local economy returning to its former glory.

Humboldt, as crazy as this will sound to those who lost everything, had it relatively easy during the 2007-2009 financial collapse.  Times were tough locally, but we got out of the recession very quickly.  Let us not forget CNBC, Pot Town USA, the Green Rush, and billions of dollars that flooded our economy over the ensuing years.  People, not just growers, made huge money and the county was spared of true economic collapse once again.

Not likely to happen this time around.  Flower is now selling near or below production costs for many and prices are likely to continue their downward trajectory until a national marketplace comes to fruition.  Margins for oil, extracts and derived products, and for processing and distribution will come in dizzyingly fast amid competition and diminishing economic rents.  What’s left…not a lot.  A few astute business folks will remain, corporate producers will spend less locally after the initial infrastructure build outs currently underway, and the county will continue to hope that the hospitals, universities, bike trails and the arts can support us all. 

One problem with humans is that we tend to believe that current economic conditions (whatever they may be) will persist, so the economy grows or shrinks frantically as realities on the ground shift.  We’ve never been a real middle of the road economic engine…boom and bust is more the capitalistic paradigm.   And sadly with economic busts, things usually overshoot to the downside, that is, they get even worse than real conditions on the ground warrant.  As emotional, reactionary beings, we largely expand or retract too far, and often at the wrong time.  Investment and risk taking are crimped when the music stops and things come to a grinding halt until confidence is restored.  I’m fearful that confidence will not make its way back to the curtain after the coming implosion.

This time it’s bust for Humboldt and I, like others who work in the financial industry, am deeply concerned for my lifelong home.  A sleepy little ghost town sounds quaint to some, but getting there from here, the “readjustment” or “realignment” now being discussed, will be no fun.

I’ve labeled our current predicament as “Humboldt’s last ride,” our final hoorah if you will.  While lots of folks just got paid as warehouse rents and prime ag land prices skyrocketed, those benefits were largely enjoyed by those with deep pockets already.  Favorable weather and bountiful harvests the last two years helped many more, while corporate investment is padding the pockets of others as we speak.  That said, Humboldt is in the very last innings of expansion and ominous times loom large. 

Merchants are down, way down and we are still in the very early innings of what promises to come. Even really exciting things such as the proposed fish farm on the bay will only bring an estimated 80 jobs.  Near half a billion to be invested by a foreign entity, but profits will head overseas.  When considering only a half mil upfront and annual chump change for the harbor district after spending a bunch more cleaning up the proposed site, this will not be the panacea some are speaking of. 

If you have money, protect it.  In a few years enourmous value will emerge for those looking to purchase land, homes and existing cannabusinesses.  Doing so now will likely lead to very large near term losses as our friends to the north can attest.  I suspect Warren Buffet came to the county partly in a bid to capitalize on the recent real estate spike, but as a contrarian by nature, I expect his real motive was to be on the ground preparing for the collapse, so that he may pick up the very best scraps that remain.

All the best.

Jesse Duncan