9 minute read
From Suits To Seeds
BLENDING SUITS WITH DIRTY BOOTS GROWING A GLOBAL CANNABIS INDUSTRY FROM THE USA
BY TOM FORREST
The week between the 10th and 17th of December is typically a hectic time of year for everyone. Recently, for the cannabis industry, it became genuinely chaotic. Beginning with the largest cannabis event worldwide; ‘MJBiz’ is hosted in Nevada and over 35,000 people descend on the enormous Las Vegas Convention Center to talk about serious cannabis business.
The following weekend, The Emerald Cup is hosted in Santa Rosa California with a true grassroots style.
MJBiz combines typical Vegas flair, flamboyance and decadence with a ravenous emerging cannabis industry – making the festivities unlike any other. The event is open for three days and features over 1,300 vendors, lecturers, media rooms, live podcasts, TV broadcasts and a lot of investor confidence. The audience of general attendees (who paid between $300-$1,000USD for their entry ticket) includes cannabis and hemp industry staff, founders, CEOs, researchers, directors and start-up entrepreneurs from around the world.
Representatives from the pharmaceutical industry, big tobacco companies, and other large-scale economies mingled with hydroponic nutrient manufacturers, extraction chemists and an assortment of LED lighting ‘experts’.
The event caters to cannabis agronomy, cannabis flower and hemp biomass processing, packaging, manufacturing, extraction, investing and finances alongside cannabis business, marketing, strategy and legal advisories from around the world. Primarily from vendors, it seemed there was a trend towards varying quality LED lighting displays, multi-tiered cultivation concepts, cannabis packaging and extraction methods alongside novel delivery methods such as new expertise and designs in vaporizer offerings.
MJBiz is designed to appeal to the highest level of the cannabis industry. Late-night VIP parties, secretive meetings, valuable handshake deals, and business back-scratching were frequent.
Decadent hotels with afterparties, open bars and primarily middle-aged men in flashy expensive suits seemed to enjoy their time in Las Vegas thoroughly.
Millions of dollars of vendor equipment was displayed over two giant convention center halls. Enormous 6-meter tall stainlesssteel extraction machinery stood near the broadacre hemp biomass processing apparatus. Countless different ingenious products were being introduced to the growing global cannabis marketplace. Some salesmen seemed to have real merit and potential application while others seemed to be trying to capitalize on the perceived limitless budgets of the big cannabis companies.
While being a high-level, investor targeted conference - this part of the cannabis industry thrived when combined with the Las Vegas aptitude for panache. A competition for the best recreational cannabis products was held at Mike Tyson’s nearby ranch, while other afterparties had VIP rooms with secret door codes for access. Cirque du Soleil provided PG entertainment for clients, while stories of dance clubs and questionable venues occurred most mornings. The champagne was flowing, and complimentary cigars were rolled at Casino roof-top parties and provided late into the evenings.
After three long days and nights in Vegas, it was a quick flight for several attendees of MJBiz over to the Californian sunshine in Sonoma County. Jumping onto our plane, we immediately recognized several tired, smiling faces from the conference. After a bumpy flight out of Nevada and landing in San Francisco, we navigated the most complicated airport in the world and rented an appropriately USA XL size vehicle. Over the Golden Gate bridge and a quick hour drive north up the 101 to Santa Rosa.
The Emerald Cup is a popular event with an estimated 30,000 attendees and hundreds of vendors. Following an enjoyable evening with the House & Garden Nutrients team, we arrived at the Santa Rosa Fairgrounds. Immediately, it was apparent there were some strange similarities and other visible differences between this ‘grassroots’ boutique cannabis showcase and the bright LED lights of MJBiz.
The Emerald Cup has been operating for more than a decade. The event (and local community) prides itself on producing and promoting organic, sun-grown cannabis.
An abundance of ‘breeders’ and ‘legal’ cultivators demonstrated their impressive products with samples and saleable cannabis flowers and seeds alongside paraphernalia and cultivation equipment.
Seed companies (with incredible marketing) had long patient queues of adoring fans wanting the latest release strains. Although this is a grassroots event, it was apparent the beneficial economic stimulus that cannabis commodities afford a local community. Comparing the two events found an eclectic mixture of capitalist human similarities alongside severe ethical differences. Although both groups seemingly want the same thing with growth in the cannabis industry, it is clear they have differing opinions on the best path to achieve this goal.
Firstly, illustrating the curious similarities. It was remarkable to observe the commanding influence of successful branding and marketing at both MJBiz and the Emerald Cup. It appeared painfully similar to a ‘fashion week’ with punters jostling for the latest release LED lighting or the newest season of ‘exclusive’ genetics from US cannabis breeders. Trendsetting companies successfully used social media marketing alongside celebrity branding to command attention. From seed companies endorsed by musicians to vaporizers certified by Hollywood actors, the influence of these ‘trends’ gains momentum as the cannabis industry emerges from the shadows.
Hype companies at both events had a similar appeal to high-end fashion with private buses, branded billboards, and enormous marketing budgets. The extraction market combined chemistry with color palettes. Horticultural lighting merged with creative design engineering, and gorgeous models promoted high-tech goods.
Regardless, if the hype reflects the quality of the product, it will be interesting to observe if the customer service reflects the enthusiasm of the sales pitch. Large companies are investing millions of dollars into these brands and equipment without proven efficacy. Time will tell if they made a smart investment.
At Emerald Cup, thousands of punters stood in lines for hours for the latest strains - whether it be ‘the Mack’ or ‘Wedding Cake Gelato #44 x Gorilla Glue Sherbet Cookies’.
Frustratingly few conversations were being had about the truly desirable traits for new cultivars. Breeders were selling from their ‘certified’ COA (Certificate of Analysis) without discussing drought-resistance, pest and disease tolerance or fertigation requirements. The trend-following cultivators are forced to grow whatever is in fashion, as that is what the dispensaries will ask for. Hollywood fashion dictating old fashion farming.
The core differences related to their respective approaches to cultivation. Patrons at MJBiz were primarily targeting the medical cannabis space. These groups are aiming for a premium capital expenditure but with a ‘pharmaceutical’ grade of cannabis commodities.
Many of the groups in this space are utilizing indoor cultivation methods under horticultural lighting. Mineral chelated fertilizer is commonly accepted as means of fertigation, and the desired outcome is clean and consistent cannabis produce. *(For more information about the different approaches to cultivation, see my Churchill Fellowship report published via The Winston Churchill Memorial Trust).
However, in Santa Rosa there was a very different approach to cannabis agronomy. Mineral fertilizers were not permitted at the event. ‘Biological’/ ’organic’ cultivation was the norm. This ‘traditional’ method of cultivation stresses the need for regenerative agriculture and focusses on the ‘terroir’. The goal is to cultivate exceptional produce embracing the seasonal variability and the resulting influence on flavors and cannabinoid profile.
Amazingly, with the strong history of cannabis cultivation in northern California, these are now inter-generational operations with many leading grassroots companies and their workers being second or third-generation cannabis farmers.
credit: Las Vegas Review Jornal
Although medicinal cannabis requires it to be free from pesticides and herbicides used in other industries, there was a noticeable lack of emphasis at MJBiz for regenerative agriculture and ‘organic’ cultivation. Very few vendors were present from the organic/biological space, but this is reflected in the greater agricultural economy and is a real problem with modern food production worldwide.
My takeaway on this turnout is that right now it’s not as profitable to be an ethical organic operation. Fast-revenue commercial opportunities seemingly trump global ethics and the potential influence on climate sustainability. But that’s a conversation for another day.
In the same breath, it is worth noting that the price worldwide for certified organic cannabis is significantly higher than conventionally grown commodities. As far as I am aware, there are only two major Canadian LPs that have successfully implemented a commercially viable certified organic regime. Both of these groups are now reducing their operational expenses, as biological input is more affordable and provides more longevity than chemical fertilizers.
Aside from the preferred methods of cultivation, it was undeniable that there was a significant difference in budget between these two events. MJBiz was as decadent as a Las Vegas event could be. At the same time, the Emerald Cup operated with fewer conveniences, less alcohol and had a more comfortable ‘rural’ feel (with a lot more open cannabis consumption!). This reflects the clear difference in their target audience and desired outcomes from the event.
It appears that these industry groups are approaching the market with different strategies. The grassroots industry approach is to grow and make a commodity to sell - primarily cannabis seed, extracts, and manicured flowers. The independent businesses use this limited capital to expand into the commercial market.
While the commercial approach preferred at MJBiz is to design and implement large scale facilities or glasshouses for maximum potential return and complete control over product efficacy and consistency. Most planning to build over two or three years and start at a large scale.
If I was asked which event is better? Or more productive for business?
The grassroots industry sets new trends, moves faster and has powerful groups of enthusiastic, young entrepreneurs at the helm. It is mentored by old leaders from the existing cannabis community. Strong lessons can be learned from this space around the future of the cannabis industry.
Contrastingly, the MJBiz ‘big-money’ approach allows for precise economic and agronomic control, provides true advances in peer-reviewed scientific research, commercialization of new large-scale technology and the development of medicines with scientifically proven efficacy.
Both groups will co-exist and draw knowledge from one another, but the question will remain as to the willingness to share this information across the divide.
If you asked me which event was more fun, well that would be a difficult question to answer; you’ll likely find me at both events next year!
A huge thank you to the groups that helped to make this trip possible, in particular: Indicated Technology (AUS), Sasha and the Stealth Garden Wholesale family (AUS), House & Garden Nutrients (USA), Greenhouse Seed Co (NL) and Quest DeHumidifiers (USA). Thank you to all of the other friends, suppliers, clients, and colleagues that made this such a fantastic adventure with fantastic cannabis banter!