OAKLAND — World-renowned for its hand-picked fruits, herbs and vegetables, California is hoping to stake its claim on a new boutique product: cannabis.
In Colorado, Washington and other states that have legalized recreational marijuana, large growers are creating a market with more supply than demand — driving down prices and bankrupting small growers, experts said at this week’s Cannabis Cultivation Conference in Oakland.
But California’s new regulatory system is different. It won’t issue licenses to large growers for five years, creating opportunities for those who can quickly and efficiently build a reputation for handcrafted cannabis products, they said.
“Our cannabis market has always been an elite market, where consumers look for the best, the tightest and the densest buds — getting top dollar,” said Debby Goldsberry, executive director of Oakland’s cannabis dispensary Magnolia Wellness, which offers coaching and mentorship to help small growers become more entrepreneurial.
“We want artisanal everything — give us a beautiful tomato, grown by one person that we can meet at a farmer’s market, that will taste better,” she said. “We will pay top dollar for that.”
The moneyed establishment is shouldering into America’s mass market marijuana game, and the specter of Big Tobacco getting into the budding business hung over the conference like a cannabis cloud at a Phish concert.
In Colorado and Washington, prices for marijuana have sunk to all-time lows, with a proliferation of big new players taking a bite out of increasingly thin margins. The wholesale price has fallen from $3,000 to $1,400 a pound.
“We need to fight against general commoditization with craft brands,” Jesce Horton, founder of Panacea Valley Gardens, a medical cannabis cultivation center in Portland. “That’s the best way to fight this big infrastructure and big money.”
Even though California won’t issue licenses for large growers for awhile, small growers should prepare themselves for fierce competition, the speakers agreed. The state has not worked out how many cultivation licenses will be issued, or what the requirements will be to get one — but growers must work to improve efficiency now.
The new rules could individually cost tens of thousands of dollars in permits and improvements to legalize grow sites.
“You are operating a business in one of the most highly regulated environments,” said Brooke Gehring, CEO and owner of FGS Inc., the parent company of Patients Choice of Colorado, serving medical marijuana patients, and Live Green Cannabis, serving recreational users.
“Growing at the lowest cost and selling at the highest cost — that is what keeps you in business,” she said.
Added Jim Ott, CEO of Precision Cultivation Company, based in Boulder, Colorado: “Don’t try to compete with the big guys on volume. Think about: ‘How do I get to know the customer better than anybody else?’ Find your niche.”
Some regions of the state, such as Mendocino County, are embracing an appellation system, ensuring that growers who produce high-quality strains retain exclusive rights over that location in marketing.
Small growers are also organizing into collectives. Just as there are champagne labels for wine and Roquefort labels for cheese, there’s a craft cannabis brand called Humboldt’s Finest, from Humboldt County’s collective of cannabis farms.
The unique horticultural traits of cannabis can favor small growers in ways unlike that of big commodity crops like corn, they said.
“Marijuana grows best when it is grown with love — you watch each plant individually and you make sure their nutrients and light are right, and they are pest-free,” said Goldsberry, who co-founded the Berkeley Patients Group medical cannabis collective in 1999.
“Large growers may drive their tractor around, but they’re not paying attention to each plant,” she said.
Mass production can knock off the sticky little tiny crystal-like hairs called trichomes that cover cannabis flowers, oozing with aromatic oils called terpenes as well as valuable cannabinoids like THC and CBD.
“Small farmers can protect them, keeping the crystals on the plant,” Goldsberry said.
“The mass market of cannabis is not what we want in California,” she said. “Here we want people to make cannabis beautiful.”