Editor’s note: This is the third story in our Seed to Sale series, following a legal pot farm as it tries to bring its historic product to a starving market.
Pot farmers in state driving a bumpy road to market
This is the third story in our Seed to Sale series, following a legal pot farm as it tries to bring its historic product to a starving market.
Seattle Times staff reporter
The pistils, or white strands that mark the blooming of marijuana flowers, have turned amber, the color of money to the pot farmers inside a Sodo warehouse.
It’s time for the first harvest of “West Seattle Kush” by AuricAG, one of the pioneering legal pot growers in Washington state.
The team of local guys isn’t popping Champagne yet. Drying, curing and crucial lab tests are to come — and probably more of the unanticipated problems that have stressed the AuricAG team in their race to market.
They’ve worked Father’s Day, Fourth of July, and close to 130 days straight. Finances are short, refrigerators bare, nerves frayed. One recent night, during a full moon, the guys got “pretty emotional,” said sales director Joby Sewell. They argued about equipment and building problems but the beef was really about exhaustion, Sewell said.
“Bilbo Baggins put it best, we feel ‘like butter scraped over too much bread.’ ”
In that sense, AuricAG exemplifies the bumpy start of the state’s recreational pot system, with a handful of stores opening earlier this month with short supply, most only to shut down a few days later while they waited weeks for more.
Although AuricAG is harvesting three months after receiving a license on April 16, just several weeks behind their initial schedule, they’re a relatively small farm and may bring only 50 pounds to market in the next month. That’s not even a dent in the projected statewide demand for almost 500 pounds of recreational marijuana per day.
The state has licensed 109 growers since AuricAG, a rate of about one per day that’s drawn complaints. “I’m not sure what the intended rate should be,” said Randy Simmons, the state’s marijuana project director. “We’re getting faster every day.”
Still, consumers are in for a rough ride until at least September, Simmons said, when there should be enough supply to keep stores open.
He isn’t surprised by the choppy launch. He predicted scarce inventory and high prices late last year when asked for a 2014 forecast. And that was before the state severely restricted the size of growing operations, in part out of concerns about creating a Big Marijuana industry.
Just as AuricAG is finding the business of growing pot on an industrial scale to be more challenging than imagined, the state is seeing that creating a decentralized “mom-and-pop” system may come with drawbacks.
Something seemed off-kilter with Washington’s legal pot system when opening day came and the Klickitat County hamlet of Bingen, population 750, had the same number of licensed pot stores as Seattle, with its 650,000 residents.
But even if all 21 stores slated for Seattle had opened, there wouldn’t have been close to enough to go around.
When state officials created the architecture for a legal pot system they aimed to allow just the right amount of marijuana around the state. Let too much grow, the theory went, and some would be smuggled to other states. That might lead the federal government to quash our experiment. If they permitted too little to grow, they figured, they’d fail in the goal of undercutting the illicit dealers.
Based on an estimate by consultants, Simmons and his bosses at the state Liquor Control Board (LCB) set statewide demand for recreational marijuana in its first year at 80 metric tons. That translated into 2 million square feet of farms.
But when the state was swamped with 2,800 applications for growing licenses, LCB leaders redrew their proposed limits. Out went the maximum 90,000-square-foot farms; in came new tiered limits — 21,000 for the biggest growers, 7,000 for medium-size farms like AuricAG, and just 1,400 for the smallest farms.
That limited the ability of big growers to get supply to market in the first months.
Some established medical-marijuana growers such as Solstice — the first legally permitted cultivators in Seattle — had drawn up plans to go big in the recreational market.
Solstice was a day away from closing on a property deal in East Wenatchee that would allow them to grow more than 2 acres, with room to expand. But when the state cut the maximum back to less than a half-acre, Solstice’s Alex Cooley said the development no longer made financial sense. Solstice hit the pause button to draw up plans and find property for a 21,000-square-foot farm.
The rule change set Solstice back six months, Cooley said, and likely kept it from delivering hundreds of pounds to stores that opened in early July.
The 2 million-square-foot cap and one-license limit may have hindered large growers, Simmons said, but it probably helped smaller growers to get a toehold.
In any case, the state has now licensed growers with the potential to farm 1.3 million square feet, or about 60 percent of the allotted space, though most are weeks or months from getting products to market.
A pot shortage obviously creates a good situation for farmers. Retailers are so desperate AuricAG could package a million pounds of pot in old shoes and sell it all, Sewell joked.
But that dynamic also increases pressure. Sewell and CEO Mark Greenshields want to sell products. Master grower Steve Elliott and assistant grower Mark Arnold are more focused on the all-female plants they call their “girls.”
Tension surfaces in decisions over things such packaging, and whether to use bags or bottles. Elliott wants glass jars or plastic pill bottles because beautiful buds get crushed in bags. But bags are more practical for labeling, Sewell said, and they stack and hang more easily for retailers.
AuricAG will go for now with sealable bags, and plan to use jars or containers for top-shelf products.
That leads to questions about what to name the products. Should they stick with established strain names such as Deadhead OG? Or should they create more generic names that suggest the energizing or sedating properties of strains?
And which of the many retailers calling, wanting to buy their products, should they sell to? This is one area where AuricAG has remained firm from the start. They want long-term relationships with a handful of retailers, who, like them, don’t want to gouge initial customers with high prices.
For AuricAG this means selling pot at about $7 per gram, with the state’s 25 percent excise tax included. That should lead to retail prices of about $20 per gram or less, Sewell said.
Once their first crops are out the door, they’d like to expand their growing area. But that remains uncertain at this time because their 5,000 square-foot warehouse gets only 200 amps of electricity from Seattle City Light, about equivalent to the power going to a single-family home, Greenshields said. With intense lighting in three grow rooms and a loft for nursing small plants — plus all the air conditioning needed to keep the operation below 80 degrees — AuricAG is perilously close to using all the power it can get without tripping its circuit breakers.
So AuricAG waits on City Light to upgrade their power to 600 amps. When will that happen? Greenshields shrugged. AuricAG has been waiting months with no news.
When they do get more power, there will be pressure on the team to buy a machine that extracts key chemicals from the trimmed leaves for use in oils, tinctures and edibles. That $75,000 investment could prove very lucrative, they believe. At the same time, team members who’ve been going without pay for months would love to put some money in their pockets.
But that’s getting ahead of the immediate challenges.
Now, they’re focused on “flushing” plants before harvest. That means feeding them only water for a week or so to get nutrient supplements, and metals such as magnesium, out of the plants. Then it’s on to pulling the plants, hanging them to dry, trimming leaves from the flowers, and curing them just the right amount of time for the desired flavor, effect and moisture.
Tests on the first batches of pot harvested around the state by Analytical 360, one of the state-certified labs, found that about 10 percent of the samples failed because of common mold, like the kind you find on a lost cup of coffee, said Randy Oliver, chief scientist for Analytical 360.
During Seattle’s hot summer, AuricAG has been challenged by humidity issues.
Elliott has said there are no good days for a grower until harvest. But really, there are no good days until the test results come in.
That will determine if all of AuricAG’s babying of its plants paid off, and if people will start buying their pot the first week of August.
Bob Young: 206-464-2174 or firstname.lastname@example.orgOn Twitter: @