Cannabis Farming and Sales

  Cannabis (marijuana) sales in California were over $5 billion dollars last year., The three highest grossing cannabis states also include Illinois and Florida. Being a rural eastern Oregon boy, I had no knowledge of the scope of the cannabis business. I recently had an opportunity to visit with Partha Kundu, Walla Walla, who is a consultant for two large cannabis companies. Kundu shared his interesting background and employment history. He has a Chemical Engineering degree from a college in India and after which he worked 5 years for Nabisco  brands in his home country of India. He enrolled in graduate school at WSU attaining a Masters degree in Food Science in 1989. He then began working for Nestle/Carnation french fry plant in Moses Lake and was relocated to other Nestle businesses entities for 17 years. Annually, he would fly to Switzerland to attend a one week management leadership course at Nestle headquarters. Kundu , later, was hired by Starbucks as Global Head of coffee procurement, logistics and manufacturing. He oversaw the purchasing of coffee beans throughout the world, leaving the company in 2015. Kundu is now working as a consultant, sharing his vast knowledge and business experience with small and medium sized businesses. Growing cannabis requires an 18-24 month growing and production cycle in advance of sales. Cannabis companies need to understand what their customers want and evaluate future demands and market trends. The farm has to analyze demands before purchasing specific varieties of seeds to plant. Indica and Sativa are the two primary classifications of cannabis. Indica plants are typically shorter and bushier and known for inducing relaxation, while Sativa plants are taller and more slender. They are associated with energetic and uplifting spirits. Modern cannabis varieties are often hybrids, with the effect depending upon the specific plant profiles rather than plant type. After planting the seeds, cannabis farmers harvest the dry f lowers from the female plants. The male plants are destroyed. Reducing the length of sunlight in green houses prompts the plants to bloom. N-P-K fertilizers are required for successful growing indoors or outside. Most cannabis is grown inside. Seeds can be planted outdoors in mid-April through mid-May. Harvest is usually mid September to mid October. In general, harvesting consists of two steps, drying and curing. Cannabis buds are picked. and placed in a controlled atmosphere, dark setting for removing moisture content. The next step is the curing process in which buds are removed and stored in sealed containers and left in a dark place. Curing improves taste and smell and makes the product smoother to smoke. Most banks are unwilling to extend credit for cannabis operations because cannabis remains a federally-prohibited Schedule 1 substance under US Controlled Substances Act. Therefore, the majority of cannabis business capitalization investments are funded by investors. Kundu is advising two large cannabis companies funded by venture capital investment growing farms to processing oils. It is not easy for cannabis companies to be approved and licensed by individual states to operate their businesses. Companies have to jump through a lot of hoops for government approval. Federal law prohibits cannabis sales across state lines. companies. Cannabis companies have to decide what business model they want to operate under – grow cannabis and market to retail cannabis stores or buy cannabis oils and sell infused products. One company he advises has green houses and is farming cannabis on small farms in Central and Northern California. They market cannabis to retail stores, often as pre-rolled joints. The other Cannabis company purchases distilled cannabis oils from third party entities. Their primary product is cannabis oil infused gummies that are growing in popularity among consumers and sold marketed to retail cannabis stores There are specific government operating terms for permits at each cannabis site, from Washington state has a 37% State Excise tax on cannabis sales plus state and lo cal sales tax. It is among the highest cannabis taxed states. Cannabis sales in Washington continues to decline, putting financial pressure on proces sors and retail stores. I learned so much talking to Partha Kundu and hope AGRITIMES readers can enjoy learning about this lesser known product as well.