Making money grow on (pot) trees

23:59, Jul 14 2014
pot US company
GREEN FINGERS: Working beneath 1,000-watt bulbs, Mark Arnold, scoots around on a stool cutting the centre hearts off the lower branches of the marijuana plants to increase growth to the buds.

A marijuana grow room blazes from a dozen 1,000-watt bulbs. The light is so intense that Mark Arnold, assistant grower for pioneering pot producer AuricAG, wears blue-tinted lenses to cut the glare.

Surveying the tall plants - made happy, Arnold believes, by his own positive attitude - he beamed: "Who says money doesn't grow on trees?"

If all goes according to plan, AuricAG could fetch US$2 million a year for its products.

But it's not easy cultivating high-quality pot on an industrial scale. "It's remarkably hard to do consistently," Arnold said.

It's even harder when you're a do-it-yourself operation, like AuricAG. Converting a Seattle warehouse, last used for car repairs, into an indoor pot farm is far from the plug-and-play automated facilities whose probes and nutrient systems nurse pot plants like electric nannies.

Throw in AuricAG's ongoing build-out and fraught female plants - tricked into hypergrowth by artificial light - and you've got challenges.

"This is when I go home and pray every night things are going to work out," said master grower Steve Elliott, after AuricAG's electrical system recently misfired and its air conditioning misbehaved.

The company, among the first 76 licensed growers in the state so far, had hoped to have its product in the initial wave of stores expected to open this week. Now the team of middle-aged local guys is resigned to late July.

Elliott wanted to slow down and get everything working as desired. "People don't understand what a volatile crop it is," he said. "One wrong move, and you lose your room. It's hard to explain to business people. They say you're just losing money."

Mark Greenshields, president of AuricAG, thought Elliott was overly concerned. "What it's really about is plant perfectionists," Greenshields said, referring to temperatures in growing rooms "just a little outside the perfect zone" of 75 degrees.

There's not much choice but to defer to Elliott. He is like a lead singer in a band, Greenshields said. His talent demands that he calls certain shots when it comes to the plants he calls his "girls."

"You have to roll with things like this," said sales director Joby Sewell.

And AuricAG's delay isn't devastating.

US retailers are scrambling for contracts with producers who can put pot on store shelves. They'll need product in August as well as July. "Just about every retailer wants to lock us down," Greenshields said.

State officials are expecting supply - which can only come from licensed producers - to be scarce at first, driving prices upward. Some growers are seeking up to US$5,000 per 500g, Greenshields said, almost triple the price of pot on the illicit market.

Greenshields and Sewell envision their product selling for roughly US$3,000 per 500g. They believe their pot will be as good as anybody's. But they want to be in the business long-term and establish a well-regarded brand. They don't want to be seen as gouging the first customers just because they can.

After retailer markup and before sales tax, Sewell hopes consumers can buy an eighth of an ounce of AuricAG weed for US$60. Top-shelf eighths sell in medical marijuana dispensaries for roughly US$40. But dispensaries don't pay the stiff state excise taxes that the recreational system will - 25 per cent when producer-processors sell to retailers, and another 25 per cent when retailers sell to consumers.

AuricAG's grow rooms should each produce at least 5kg per harvest, Elliott said, citing the growers' general rule of one pound per light. The yield could be much more.

In its assembly-line system, in which new clones are supposed to constantly replenish supply, the AuricAG team hopes to pump out 200kg to 500kg pounds of pot in its first year.

That could bring roughly US$2 million in receipts before taxes and expenses. As for getting rich, Sewell said, "I don't see it in the short term." But AuricAG does hope to increase the size of its operation one day, and it is already exploring new lines of business, such as packaging for other growers.

The company has more than 1,000 plants in various stages, from clones just 5cm tall, to 60cm juveniles, to behemoths stretching above Arnold's head. Every plant taller than 20cm must be assigned a bar code and a 16-digit identifier for the state's tracking system.

But disaster lurks around every corner, Arnold said, from botrytis, or gray fungus, to bugs, like the mayfly.

Defences include neem oil sprayed on plants and a crunchy silica substance spread around the base of the plants, which looks like shards of glass under a microscope and lacerates tiny insects that crawl on it. Even the wheels on AuricAG's watering buckets get bleached, to prevent contamination.

The best overall defence, Elliott said, is good air flow that maintains the right temperature and humidity. If rooms are too hot, plants will dry out and droop. If they're too cool, dampness will invite pesky critters.

The growers believe their positive energy also helps the plants. If so, Arnold may be the equivalent of a human vitamin. A former Boeing inspector with a big scar on his back from spinal surgery, Arnold is a believer in the medicinal properties of marijuana.

His first growing experience came after he got his medical card and a friend challenged him to try keeping one plant alive for a year. "I was able to get off painkillers," he said. "It allowed me to dream." Now he's living his dream, he said, tending plants at AuricAG.

"You always have to think about the gardener," Elliott said. "If the gardener is happy, the plants feel it."

- The Seattle Times