Small Town News

Producing a legal crop

---

Marijuana producers, processors navigate laws to help create an accepted trade

It's the biggest business opportunity since cellphones, a new crop to boost struggling farming communities and the end of a modern prohibition. That's how Mason County's marijuana producers and processors describe the advent of a legal commercial Cannabis industry in Washington, made possible by the passage of Initiative 502 by voters in November 2012.

"If I could have started the first brewery after prohibition ..." Nick Browne mused, "Wouldn't you do it? There's not going to be another chance to get into something like this on the ground floor."

Browne's Highwater Farms in the Skokomish River Valley was granted the first producer license in Mason County in late March, and as of Aug. 25, was one of four licensed growers in the county.

Statewide as of Aug. 25, 172 producer and 133 processor licenses have been issued.

The Liquor Control Board approved his Tier 2 operation for 7,000 feet of plant canopy space.

That amounts to about 200 plants, Browne said.

The Liquor Control Board allows three tiers of plant canopy sizes. Tier 1 allows for up to 2,000 square feet of plant canopy, Tier 2 allows for 7,000 feet and Tier 3 allows for 10,000 to 30,000 square feet of plant canopy.

His operation is unusual because he plans to cultivate his plants outdoors.

"It's a completely different animal," Browne said, of growing marijuana indoors versus outdoors.

However, Browne has farmed vegetables and other crops at Highwater Farms for the past 11 years. He plans to continue grow squash, tomatoes and other crops on other parts of the farm.

"Growing outdoors really comes down to your strain selection," he said. "It's basically farming the same way you would farm any crop."

Browne uses hoop houses, or temporary greenhouses, to nurse the plants in colder parts of the growing season.

"In the main growing season, the outdoor temperature here and the humidity is actually perfect for the plant," he said.

The hoop houses are slightly warmer on the inside than the outside.

"That five or six degrees is a huge difference," Browne said.

Certain strains will react better than others to outdoor growing, he said.

Brown plans to use Orange and Cheese strains. The Cheese strain originates in the United Kingdom, which has a similar climate to Western Washington. Both strains have short growing cycles, which make them ideal for outdoor, summer growing.

"They only need seven weeks of good summer weather to finish them off," he said.

Browne expects his overhead cost to be significantly lower since he is growing outside. He also plans to fill a niche market for organic, outdoor marijuana.

"I just want to grow high-quality organic products ... and be able to make a living farming my land," he said. "I kind of want to prove it can be done on a small scale, it can be done profitably, it can be extremely environmentally friendly."

APPLICANTS FACE DELAYS Agropack, owned in part by Steve Fuhr of Union, is also a Tier 2 operation, and plans to build out to a 7,000-foot plant canopy as well. However, their operation will be indoors, and include both producing and processing.

"With the indoor grow, we've got a lot more control but we have to invest a lot more money," Fuhr said.

Fuhr has applied for both producer and processor licenses with the liquor board, but has not received either license.

Like many applicants, Fuhr was planning on being licensed and operational by February. However, navigating state and local requirements for producers and processors has beeharder than Agropack's owners expected.

"They're bankrupting us right now," he said. "We're all stumbling around in the dark trying to figure out what last week's change (in the law) will do to us."

Agropack had to relocate to a property on Cady Farms Road west of Shelton after learning its original location was too close to an at-home day care. The change pushed its application to the bottom of the state's stack, Fuhr said.

Not long after finding a new location, and submitting new paperwork, Fuhr learned that the state Liquor Control Board had amended the rule, and that Agropack's original location would have been allowed.

Now their application is on hold to give the FBI time to do a background check on its owners, Fuhr said. Now Fuhr said he doesn't know when to expect a license.

While Agropack has struggled with state and local requirements, Browne said he had a fairly easy time being licensed.

"I wasn't really surprised at all — I think they did a great job," he said. "I was impressed. "Everyone at the county has been super helpful.

"I wasn't really surprised at all — I think they did a great job," he said. "I was impressed. "Everyone at the county has been super helpful. It's been a real positive experience."

Browne is required to have 8-foot tall fences with security cameras. The plants can grow up to 6-feet high, he said.

While waiting for approval, Fuhr, who has a background in marketing and mountain climbing, started a consulting business to help other commercial Cannabis applicants.

Despite the difficulties, Fuhr said he's not giving up.

"It's the mountain climber in me," he said.

'THE REAL MONEY IS IN PROCESSING'

Growers and processors have varying estimates on the costs associated with their endeavors.

"The real money is in processing," Fuhr said. "My focus has really been on processing — growing is the easy part ... The revenue (for a processor) is three to four times what a retailer would expect."

Cannabis takes about a month to process before it can be packaged. Marijuana loses about 80 percent of its weight in the drying stage, Fuhr said.

After drying, the plants are cured in glass jars. Fuhr compared the curing process to the fermentation process with wine.

"It goes into an environment where we have to carefully control the moisture and the light," Fuhr said. "Light hurts the THC (tetrahydrocannabinol) — it makes it less potent."

Growers can monitor the THC content of a growing plant by using jeweler's loops — high powered magnifying glasses — to look at tri-chrome crystals that form on the plant. When they go from clear to a milky white color, the buds are ready to be harvested, Fuhr said.

"It's a very finicky process," he said.

Agropack will likely hire about 20 people, nine to 12 of which will harvest the marijuana by hand.

Larger operations might use trimming machines, but Fuhr said they can mangle the marijuana buds.

"When you have a product that has the value our product does, it makes sense to have them hand trim," he said.

Agropack recently had its packaging approved by the liquor board.

"Packaging is the biggest mystery for all of us," Fuhr said. "No one's packaged Cannabis like this before."

Packaging at Agropack will also be accomplished by hand. Fuhr said small packing machines cost up to $25,000 and would have to be custom-made.

Flowers must be in sealed packages, but edible and oil-based products must be in childproof containers. Each container lists the percent of THC, cannabidiol (CBD) and total activated cannabinoids (TAC). The recipes for edible products must be approved by the liquor board.

GOOD AS GOLD

Agropack will likely produce Cannabis oil products, commonly known as hash oil, package dried marijuana flowers and maybe produce edible products, he said.

Fuhr said hash oil is worth "literally twice as much as gold."

Because the industry is so new, producer and processor applicants are learning as they go.

"I have been working seven days a week since before Thanksgiving," Fuhr said. "I spent three weeks in Colorado two years ago researching the market carefully."

While the revenues are expected to be great, the cost to enter the industry is high, he said. Fuhr said a minimum startup cost for a producer and processor operation could be $150,000.

Browne said he hopes to keep his costs low, resulting in an affordable product. He plans to grow for five to six months per year and make one harvest. He said the size of the harvest is difficult to predict.

"Growing indoor, your production cost per gram has to be so high," he said. "My cost per gram is pennies."

He plans to find a "like-minded" processor who can help him market the distinctive product.

"I think that's why (my application) got pushed through so quick," he said. "Mine is so basic, so small."

Browne said another producer and processor told him that they plan to ask for $10 to $15 per gram, or $300 to $400 an ounce wholesale.

"Price to the public could almost double that," he said. "I will absolutely do my best to make sure Highwater Farms Grade A organic ganga is available at a reasonable price."

THE FUTURE

It's tough making a living growing vegetables, Browne said.

A new crop under high demand may be just what it takes to stimulate Mason County's economy and revive the sodden Skokomish Valley, he said.

"We need to be realistic about the changing land in the valley," he said.

The Skokomish River, full of silt from mountain runoff, regularly floods, making farmers' pastures unusable. Farmers in the valley used to have large dairy farms, but floodwaters reduced the size of their pastures, making the farming unsustainable, Browne said.

Farmers began turning to vegetables and other crops, but continue to lose land to flooding, he said.

However, farming Cannabis outside can be very lucrative on a small amount of land, Browne said. His patch sits on a quarter of an acre.

"I think it's important not to forget it's a crop," he said. "I think by leading by example ... hopefully the county and neighbors will see maybe this is the crop that can save our way of life."

"I have been working seven days a week since before Thanksgiving...

I spent three weeks in Colorado two years ago researching the market carefully."

Steve Fuhr, co-owner of Agropack



Copyright 2014 Shelton-Mason County Journal, Shelton, Washington. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from SmallTownPapers, Inc.

More from Shelton-Mason County Journal