AL: Talking about the cannabis market specifically, there are probably a lot of people who care about organic and natural? How does this play in the cannabis industry in California?BB:
There definitely are a lot of people who care about organic, natural, clean cannabis — especially in California. It may be surprising to some, but there really hasn’t been a good, reliable way for consumers to know that the cannabis they’re consuming meets these standards. In fact, one of the dirty little secrets of the cannabis industry is just how many nasty pesticides have historically been used — close to 85% of all cannabis products on the market two years ago would fail today’s pesticide testing standards.
Right now there’s no “organic” certification for cannabis. The term “organic” is owned by the USDA and because cannabis is still Schedule I federally, the USDA doesn’t want to touch the issue of giving the organic standard to cannabis. There’s been some other, much smaller, California-based certifying bodies that have sprung up to fill the void. One of them is called Clean Green.
They go visit farms and vet them, and the farms have to pass all these standards to get the label. In the near future, the California Department of Food and Agriculture, which oversees statewide cultivation licensing, is going to be rolling out a California-wide organic program; I don’t think they’re technically calling it organic, but that’s basically what it is, mandated to roll out in 2022. There’s also an appellations program that’s going to be similar to viticulture appellations.
Right now there’s basically no mechanism for the consumer to know with certainty where the product’s being produced, or how it’s being produced. A lot of the mechanisms that exist in other parts of ag and the food industry that allow the consumer to know where the product is coming from are now coming to cannabis, supported by state agencies. That is a huge and very important sea change in the industry. Emerald Triangle growers are going to need as many of these arrows in their quivers as possible to succeed in the regulated market. These organic certification standards and appellation designations have the potential to really help set them apart in the marketplace and earn them a higher price for their product.AL: Once cannabis is just as prevalent as corn out there, do you think there could be a divide, like heirloom-quality, farmers-market-cannabis vs. mass-produced, corn-syrup-cannabis?BB:
Yeah absolutely. It’s already happening. The California medical laws came into effect in 1996. From then until a couple years ago, the medical market was filled with a diverse array of relatively small operations, many of whom were producing very high-quality craft products. Then, when the recreational laws came into effect, things changed overnight.
“In under two years, you saw that traditional craft market get decimated as people had a really hard time transitioning to the regulated market, getting through all the regulatory hoops. Corporate interests have come in off the sidelines."
Nowadays, so much of the focus is on scaling, raising investment, looking for better margins, positioning to go national and even global. It’s head-spinning how quickly it’s all happening. Personally, we thought this would happen at some point, but not this quickly.
But California is a sophisticated market. Cannabis has been grown, consumed, and treated in a connoisseur way here for quite a long time. Even though there’s a lot of new, uneducated consumers, there is a history of quality, an understanding of quality, and an appreciation of quality here. We’re 100% sure there is going to be a craft market going forward and that’s really what we’re focusing on. We think that market share will be somewhere between 10–20% of the overall cannabis market in California. The consuming public in California is so big that even if the craft market is only 15% of the overall market, that’s still millions of potential consumers. We think there will be plenty of room for people who are committed craft producers to find their niche and stake their ground.AL: We talked a bit about how agtech gives you insights and more visibility, but do you think that it’s possible to rely on it a little too much?ML:
Yeah, I definitely feel that way. In a traditional ag setting, it’s not physically possible to give each plant individual attention. That’s where agtech can help. However, if you’re leaning too heavily on that tech, you can get lulled into complacency and fall out of tune with your crop and its needs. Ben and I are trying to combine those two sides of the coin.
“As opposed to replacing traditional methods with tech, we want to find the tech that is really going to support and enhance our core philosophies around cultivation."
There’s always the feeling like you want to automate things and make them easier. Farming is difficult. There’s going to be some kind of give and take, in my opinion.BB:
We’re a craft operation, trying to produce a boutique, high-grade product that’s very rich in terpenes, high in resin-production — and ultimately, wildly unique, complex, and well-rounded. We just won our second Emerald Cup award
last year, and we’re seeing the market respond favorably to all this hard work and attention to detail. Traditionally, the medical cannabis market was primarily a craft market, and that’s shifting now to where a majority of the market going forward is going to be a commodities market. Really, it’s going to be more bulk production where the cannabis is extracted for oils to be used in things like edibles and vape pens, while we’re focusing on creating the most immaculate, interesting flower we can. That’s what our goal is. If you get too big, or rely too much on what the computer is telling you, you risk losing that close relationship with the plant. You really need to be in the field and have that connection to get a product of the quality that we’re going for. At the same time, we’re also trying to grow our business, and you can’t do it entirely just by feel. You definitely need the help of technology. There’s a sweet spot where you can use your intuition and also use technology. We’re definitely in the process of trying to find that middle ground as we go forward.AL: One of our key motivations at Arable is to make technology that serves growers in the decision-making process. You’re using machines, but you’re still using your brains, and your noses, and your eyes. That type of stuff may never truly be automated, nor should it necessarily. What are your thoughts on that?BB:
100% agree with you. We’re always going to be craft producers. Our goal is to produce the highest-quality product in the state of California — and globally. We’d like to be known as the best of the best. We never want to get away from the sight, the smell, the human sensory component. That’s really crucial. I’m not sure you can really get a craft product if you eliminate that, and we don’t want to eliminate it. But we definitely recognize that there are ways to balance the technology and the human aspects to take the product to a higher level than we’ve ever taken it before.