Ryan Jennemann is the 41-year-old founder and CEO of THC Design, a Los Angeles-based producer of quality flower and prerolls that since 2015 has become one of the state’s leading brands, available everywhere. I first became aware of THC Design in 2015, when a dozen or so employees of the company wearing branded t-shirts showed up at a meeting of the Southern California Coalition, a trade group representing LA-area cannabis companies lobbying the city to operate legally. I did not know at the time that THC Design was a financial supporter of SCC, and that it would show its staying power over the years in an increasing difficult marketplace. Jennemann sat down with CBE to discuss the beginning of his company, its successful strategy for survival in the Golden State, and how it plans to ensure it is around for years to come.
“I’m from Oklahoma,” said Jennemann of his early days on the West Coast. “I moved out to California in 2009 because of cannabis. I moved up to Santa Cruz because it had the most lenient cannabis laws in the state, and I slowly built out our company from a house in Boulder Creek in the mountains of Santa Cruz, to having warehouses in Oakland, Berkeley, and Vallejo. By 2014 the writing was on the wall for two reasons. The overwhelming amount of my product had to be transported from the Bay to LA, number one, and number two, by 2014, three states had passed legalization: Colorado, Washington, and Oregon, so it was really clear to me that California was overwhelmingly going to pass it in 2016.”
This was not the first time Jennemann’s talent for seeing into the future would serve him well. “This was in the traditional market,” he said of his earliest efforts. “I was not licensed, and my places up in the Bay would get either raided or robbed. That’s how I would lose each place, through raid or robbery, and I took whatever equipment was left and the employees I had and transferred them down to LA. I transferred about 30 people – all the employees I had at the time – from the Bay to LA, but LA was farther behind the Bay Area from a licensure standpoint. I was like, Damn. I had moved down to LA, and it was good from a revenue and business perspective, but from a legal perspective, I had just left places that were in the process of giving out licenses and I moved to where it was not even on the table. So, I hired my first lobbyist, and that led to me meeting Adam Spiker. Adam brought up the Cultivators Alliance and asked if I wanted to meet a guy named Erik Hultstrom. This is 2015. I met Eric, we were like-minded guys, and basically the agreement was that I would finance the group if he was the workhorse. And he was like, let’s go for it.”
The purpose of the group was to get licenses for growers. “It was the Cultivators Alliance at the time,” recalled Jennemann, “but Eric wanted to change it to embody the effort for everybody, so we changed it over to Southern California Coalition, and Adam Spiker became the executive director. So, you have Eric, Ryan, and Adam: Adam is a professional consultant, Eric is the face and the voice, and Ryan is behind the scenes doing the finances and coordinating meetings. That was also when we brought in Virgil Grant. At the time, cannabis was still illegal, and people were saying all these negative things. Virgil had gone to the federal prison for cannabis. He was a huge value-add for his intelligence, but also by him becoming more of a face of SCC because of his history. And also, because of his history and him being African American male, he was much better received than someone like Adam, who was just another white face in the world’s eyes, just another rich white guy.
“So, SCC ended up becoming Virgil, Eric, Adam and myself,” he added. “There were a lot of other people involved with SCC, but that was the driving force, we really pressed for legalization in LA, and the uniting factor was this other ordinance that was trying to set up monopolies in Los Angeles to only give out 100 licenses. We had our proposed ordinance, which was to open Pandora’s box and let everyone get licenses, and ultimately, because I was so involved in the process, THC Design was the first cultivator to get licensed in Los Angeles. And LA was very nice to give me 11 licenses.”
This was not Jennemann’s first efforts growing cannabis. He was it turns out a lifelong grower. “I’ve grown weed since I was born,” he said with just a touch of exaggeration. “My family has grown weed my entire life. My dad grew weed and sold it. No exaggeration, it was always grown and sold in my house. In 2008, I had a small sporting goods company that I had started back in Oklahoma. We sold baseball equipment.” But fate had other plans in store for the 20-something. Following a personal tragedy, he “decided I’d rather move to California than be in Oklahoma and eke it out and have a mediocre life. I took my grow equipment, 12 lights, which at the time was huge. I took my grow setup from Tulsa and set up my first grow in Santa Cruz in 2009.”
Did he bring any genetics with him? “That’s a great question because I love this story,” he replied. “The very first day in I got to California, I went and got my driver’s license. But it’s not like Oklahoma where you get a driver’s license the same day; here, they give you this piece of paper and you get your license mailed to you weeks later. So, I got this little piece of paper and went and got a temporary doctor’s rec with it because they wouldn’t give me an annual doctor’s rec because I only have this paper license. But once I had that, the very next morning I was in Oakland in front of Oaksterdam University. They had a dispensary called Blue Sky, and that’s where they sold their clones. I knew about Oaksterdam because I was a supporter of NORML and I would read about Oaksterdam. So, I went there, and I was in California for less than 24 hours before I bought my first clones, XJ-13.”
That lowly strain became more than just a first clone. “I still propagate it and it became our flagship all the way from 2009 to 2019,” he said. “It wasn’t until the summer of 2019 that Crescendo, another strain of ours, became our top seller. But XJ, that genetic from Oaksterdam I bought in 2009, made me, for lack of a better term, and made THC Design.”
How did that happen from a clone anyone could acquire and propagate? “It’s true, I got a clone that everyone else could buy at the time,” said Jennemann.. “That clone was my introduction to a virus that’s in cannabis called HpLVD (Hop Latent Viroid). I had no idea what it was in 2009, and even though I’ve grown weed since I was a child, I had never seen a plant do this. I call it ’the disease’ and XJ had it. It was a very unstable genetic, and for the majority of growers that grew XJ, if she got any stress levels at all the disease would come out. So, it was a hard thing for people to keep it healthy in their genetic stock. Then, in the Spring of 2011, Oaksterdam got raided, all the plants were taken, and the XJ cut was gone from Oaksterdam. It was only for sale for about a year and a half, from 2009 to early 2011, and there are now only a handful of people from 2009 that currently grow, 13 years later, in California. So, it was a combination of the disease being very prevalent in it and the industry not knowing how to get past it – the only way I did was my background in organic agriculture, so instead of trying to battle the disease with chemicals I would battle it with compost, teas, and worm castings – and Oaksterdam getting raided and that genetic was gone as of 2011, so only a handful of people still had that exact cut.”
Was he even thinking about building a real company and brand in those early days? “Another great question,” said Jennemann. “I was going after branding from day one, and one of the things that was always in my head – and granted, I’ve been here 13 years now and this is just starting to catch up – but I was always aware that farming cannabis is pretty easy. Farming strawberries is much harder than growing weed and you don’t hear all the strawberry farmers in Watsonville pounding their chest that they’re the best farmer in the world and no one else can do what they’re doing. But you hear that from weed growers all the time, and it’s funny to me.
“So, I knew when I moved out here that there was only a short-lived time that cultivators of cannabis are going to be the bee’s knees,” he added. “People are not clamoring to go to Indonesia to see the Nike shoe factory. A lot of people make shoes, and people don’t need to go see Nike’s shoe factory in Indonesia. The same is going to happen with cannabis. People love oranges, and don’t have to go to central California to verify the orange. You don’t see orange tours exploding in Fresno. So, it was all about branding from the beginning. I thought years ago that cultivators would have caught up, but only in the last year are you starting to see the oversupply of cannabis, and because the markets are so over-supplied, competitiveness is increasing and quality is increasing hand-over-fist, day-after-day. So, as cultivators are starting to become a dime a dozen, my analogy to my team is that no one is going to Indonesia to see Nike’s factories and do not think that the value to Nike is their factory in Indonesia. The value to THC Design is not our ability to farm, but our ability to brand.”
So, you saw that there was a brief window of opportunity in which to establish a pattern of consistency with the consumer, and THC Design had that limited amount of time in which to plant in a consumer’s head that the brand equals consistency and quality? “Exactly,” agreed Jennemann. “I was thinking in my fairytale head that Philip Morris was going to come in many years ago. And I’m thinking, I have to get the brand out there. I have to be one of the originators, the OG so to speak, because when the billion-dollar corporations come in there’s no way I’m going to be able to compete for market share against them, so I have to establish market share before the big boys and big girls come to play.”
It was a plan that paid-off over time. “I would say our penetration is pretty solid,” said Jennemann. “For what we call active accounts, ones that have purchased from us in the last 90 days, we’re in a little over 400 retails in California and there are just over 800 that are open and operating, so we have a little over 50 percent penetration in the market on active accounts. In 2021, we sold to 576 storefronts, which works out to almost three-quarters of all active licenses, so we have pretty good market share. From a branding standpoint, and this is going to sound negative, but we have a very solid brand in the industry; we are respected in the industry. We’re known for consistency and quality – you happened to use those words. That being said, with even the biggest brands in the country – Cookies, Jeeter, and Stiizy – I’ll tell you right now that if you’re not in the industry, you have no idea who they are. My friends in Oklahoma smoke weed every day of their lives, and they never heard of those brands.
“They don’t know it,” he added. “My family back in Oklahoma, they’re growers for generations, and they’ve never heard of those names. It’s not even in their world. What I’m getting at is that with even the biggest brands, to a normal person on the street that’s a foreign language they’ve never heard. So, my spiel is that THC Design is well-known and very respected in the industry, but I don’t think any brand in cannabis is mainstream. No one is a Coca-Cola.”
Jennemann added that maybe five to 10 percent of cannabis consumers actually know about the industry. I asked what they are looking for when they walk through the door, just the lowest p[rice point? “I would say definitely price,” he said. “People are very cost conscious obviously. Everyone talks about cannabis in the legal market versus the black market. And right now, in the legal market in California costs are about three times more than black-market costs, so we’re having a really hard time battling with the black market. So, yes, price is important because we are battling the black market where it’s a fraction of the cost, but people also don’t have the government-printed $3 trillion of fund relief anymore, so they have to spend their own money.
“As of a year-and-a-half ago,” he added, “when I was in dispensaries in California, the number one thing I would hear was they wanted a high THC result because they had it in their head that more THC equals more bang for the buck, which I always thought was funny because I’m into whiskey and nobody that is into whiskey, just like nobody that’s into wine, buys a bottle of whiskey or wine based off alcohol percentage. I just think it was funny that people would chase that but that is what I am hearing when I go to the dispensary. I often go to dispensaries for sales meetings, and I always sit around the counter for 20-30 minutes listening to what the customers are saying. And the number one thing they ask for by far, not even comparable, is what is new? It is the number one thing they want.”
New as in fresh? “They mean new brands,” he corrected me. “What’s the new product? They want the new Supreme shirt. They don’t want the Supreme t-shirt that dropped last week. They want the brand-new Supreme shirt that just dropped this week that nobody else has, and that’s what they’re asking for. So, what’s making it really hard for us is that they’re asking for what’s brand new, and THC Design has been established for eight years. We are one of the established brands in California and we are having a hard time competing with fly-by-night brands. If you’re an established brand, by definition you’re not new, so cannabis brands are having to do exactly what fashion and apparel companies are doing, and that’s limited drops, limited releases, and different things to make it seem like the same t-shirt you’ve been selling or the same tennis shoes you’ve been selling week after week, year over year, are brand new. So, the number one thing by far that consumers are asking for is what’s new, what’s hot, and that’s what we’re having to adopt to. It’s much less about quality for the general consumer.”
It also is a budtender issue. “On average, these budtenders are 21 to 25 years old,” said Jennemann. “They’re kids, and kids only care about what is new. They have an attention span of 10 seconds. I have a 21-year-old daughter; she doesn’t spend an hour and a half watching movies. She wants a 30-minute show. She makes fun of people watching movies; she can’t even grasp it. So, this is their attention span, they always want new, and it is what we’re dealing with.”
Is that the future of cannabis sales? “Absolutely,” he said. “I used to call the cannabis industry like a nightclub, because the moment the doors are wide open, nobody wants to get in the door. Studio 54 was famous, but even at its peak some nights the whole place would be empty on the inside, and you’d still have a line going down the street, because it was always important to let it be known that this is the hottest place in town you cannot get in to. That guy obviously was a marketing genius. So, it’s the same thing here. Once everyone gets in, they don’t want it. While I’ve said for years, nightclub, a buddy of ours, Rusty, the owner of Old Pal, has said for years, fashion. Well, in the past year. I’m thinking Rusty’s fashion analogy is more correct. You always need something new and hot, and it’s exactly what Supreme does with their t-shirts, and exactly what Adidas and Nike do.”
Or Cookies with their clothes and branding? “Cookies is a perfect example,” said Jennemann. “Cookies has had a lot of downfall, and I know people have dumped on them, but the things that they’ve done are genius, and they do limited drops across the state. Two drops a week that are limited, things like that are so smart. They do drops that don’t even exist. I don’t want them to get mad at me, but last year they did a limited drop with Snoop that didn’t even exist, that never even made it to market.”
I asked about pheno-hunts conducted by THC Design, resulting in care packages containing exotic flower whose small batches mean only a few people will get to experience it. Was this an attempt to counter the rampant short-attention spans? “Absolutely, that’s exactly what we’re doing,” concurred Jennemann. “That small drop is something exclusive, something limited, something certain people can’t get, something that people are going to have that fear of missing out on. It’s a marketing stunt. We’re spending way more money creating that packaging, testing the product, and we’re doing it so that people can feel like you’re only going to get this one time, which is true. We do special limited packaging, special strains that are limited, and we’re able to leverage that with shops. ‘Oh, you want to get this limited drop? Why don’t you buy another pound of XJ?’ That is exactly what we’re doing, and we’re trying to get to where we’re doing some type of a limited drop once a month, and we’re trying to get a cadence to it. I don’t want to overstate it but like with the XJ that we’ve had forever; we do 5000 boxes of a limited design on the box – same jar, same weed – and it sells out instantly. Now, we obviously can’t do that every day, so we have to balance it and it’s a mix of these different ideas, but with the pheno-hunt, it’s exclusive packaging and weed that we have one time only, so that’s as exclusive as you can get.”
I asked Jennemann how his company has managed to keep its staying power in a California market that eats cannabis brands for lunch. “Well, like Erik said, we are bootstrapped,” he said. “We’ve never had a lot of money. I don’t have outside funding. When the company was built, we had one house in Santa Cruz to two houses in Santa Cruz, a small warehouse in Oakland, and then a small warehouse in San Leandro, then a warehouse in Vallejo, then a second in Vallejo, and one in Richmond. It was just a snowball effect of one after the other after the other. We never brought in money. I have a motto, which is maybe embarrassing, but I’ve said it since I was a child, that for every dollar I make I invest two. What I mean by that is that I put everything back into the company. I don’t mess around. You can ask my finance guys how much I stress them out, because if we make 100 grand in the month in net profit, I’m investing $150,000.
“We are very bootstrapped,” he added, “but we’re not spending other people’s money. I see every other company I deal with spending other people’s money, and it’s a way bigger difference when you’re doing that. They don’t care. I mean, they care about what they’re going to make, but they’re milking investors. It’s bad people stuff. So, us spending our own money has a very different mindset on how our company operates, and I think there is a huge cultural shift to that. My guys work 20-hour days because there’s no magic fairy that’s going to come in and give us more money. We’ve got to make it happen. We don’t have exorbitant salaries for the executives. We don’t have exorbitant marketing budgets. We don’t have any of that. We run real lean.”
THC Design currently has six locations – four flower and two nurseries. I asked Jennemann if he knew prices were going to fall before they did and prepared for it. “Lowest costs per pound is the whole thing,” he said. “If you’re going to look at it from a retail standpoint, you want to have a real strong brand, and you want to be that Nike, you want to be that Apple. Nike and Apple are the two strongest brands in my life, and I say that because it doesn’t matter if you’re on food stamps in South Central or if you’re a billionaire in Beverly Hills, somehow both of them aspire and are able to attain the new iPhone and the new Jordans. So, Nike and Apple have crossed all demographics and all ages. I think their branding and is bar none. So, back to THC Design, from a branding standpoint we want to be iconic, we want to be an Apple or a Nike, we want to have this great brand, but we don’t have the billions of dollars that these companies do to create the brands they have. So, we’re trying to do branding, but we’re on a small scale.
“If we are not looking at branding but just at being a manufacturer,” he added, “we’re looking at being that shoe factory in China or in Indonesia. And from a manufacturing standpoint, you need to get your cost of goods sold, your cogs, down as low as possible. So, for us over the years, it’s been a balance of what money can we put to our brand while at the same time getting our cost of goods sold as low as possible. All you had to do is look at states like Oregon in 2014-2015 when the market was really bottoming out and pounds of premium indoor flower were going for $600 a pound. It’s been in my head for eight years what happened in Oregon.
“And then,” he continued, “I come from Oklahoma, where we know what profit margins are in commercial agriculture, which operates on a one to 3 percent profit margin. Houweling, the largest tomato producer in the world, their agreement with Costco is at a flat 1 percent profit margin. There’s no room to mess around. So yes, we’ve had to balance. How much money do we put into building a brand, and how much money are we putting to lower our cost of goods sold. But the way we’ve been able to weather the storm the last couple of years is our low cost of goods sold, and that’s how we’ve been able to weather the storm the entire time.
“We have an average effective direct cost per pound produced of just under $600,” he added. “Go back to a couple years ago, and the market data I was getting was that the average cost of a premium indoor pound was between $1000 to $1100. So, for the last few years, between 2018 to now, the way THC Design was operating at a profit when everyone else was getting their ass handed to them was because we were growing weed for $575 a pound and our competitors were growing it for $1000 and $1050. That delta is what was giving us our competitive damage, but now a lot of farms are catching up with us. Some large-scale farms, such as the King’s garden or NorCal Holdings, actually have their cogs lower than we do. The quality is not quite as high as ours, but they still have great quality, and their cogs are lower. We just need the economies of scale. And I’m based out of LA. We’re only in LA because we were hiding downtown in indoor grows, but avocado farmers are not rushing to leave Central Valley because they can’t wait to farm in LA with its rates of occupancy and utility. So, a huge thing for THC Design getting its cogs down is getting out of LA. It is a great place for retail, and is going to be the biggest retail market in the country for decades to come, if not forever, but from a grow standpoint, farmers don’t need to be in downtown LA.”
Jennemann’s prescience is impressive but not infallible. “I definitely saw it all coming, but I did not think prices were going to compress as aggressively as they did between August 2021 to March of 2022,” he said. “That was more aggressive pricing compression, but it was very much expected and anticipated.”
I noted that the trends are apparent in hindsight, but most people seem to want to see what they want to see. “Not to get political,” said Jennemann, “but printing $3 trillion and just handing it to people created demand that was not real. It was clear that the demand was artificial and not a real demand. Number two, California got its ass handed to it in 2018 when Oklahoma went online, because Oklahoma started to supply the black market. Then California again got its ass handed to it when Michigan went online because Michigan started supplying the black market. With New York starting to have cultivation come online, and Massachusetts with cultivation coming online, and Pennsylvania having cultivation come online, it was obvious that California was going to take a big hit yet again, because it went from being the black-market provider for the whole country to other states becoming their own supplier. So, it was a combination of COVID money combined with what happens to California sales every step of the way when other states go legal.
“I may have confused you talking about black-market sales in Oklahoma and Michigan,” added Jennemann, “but what I mean is they’re selling it legal in Oklahoma, Michigan, and California. They’re selling bulk pound through distribution companies who are burning their licenses, and they’re shipping those pounds to the East Coast. It’s a legal sale that’s going to the illegal market. The northeast is a third of the country, and all of a sudden a third of the country is producing its own weed for the first time, and that’s having a massive impact on California.
“So, the combination of government relief combined with those states coming online had us very ready to think prices were going to drop,” he added. “We anticipated that premium indoor flower was going to drop to $1400 to $1600 a pound, and it dropped all the way to $800 to $1000 a pound. The highest prices we were ever getting for our premium flower was in March 2021, when we were getting on average $2600 to $2800 a pound. We hadn’t had prices that high since 2017. As of today, that same exact flower is selling for $800 to $1000 a pound in the bulk market. That level of compression happened from March of 2021 to March of 2022. Within 12 months, the prices went down by almost one third of what they were.”
The game-plan to keep THC Design relevant and profitable is two-part, explained Jennemann. “We haven’t been on our high horse in other states because we’re so hot in California, so we have not entertained licensing deals in other states,” he said. “But we are now looking because the market is tight and we are hurting, so we absolutely need to bring in other revenue streams. So, we’re looking at THC Design in a couple other states, but with any state we’re looking at putting THC Design in, we have to grow the product and control the supply chain. That’s a mandate for us because we are known for our quality and our consistency, and the only way we can ensure that is through us doing it ourselves.
“So, like the opportunity we have in Michigan, which will be a joint venture where we are partners, we will oversee all aspects of operations,” said Jennemann of a planned deal with Canadian MSO Red, White & Bloom. “We’re also looking at a couple of other states as a short-term way to bring in revenue. Long term, we have a large development we are working on in Palm Springs, California, where we are building a commercial ag facility. We are building what you would build if you were growing tomatoes in the commercial ag sector. The facility will get our cogs down to a ridiculously low number for premium indoor flower. The facility is highly automated, which is controversial because there are not many laborers, but it is a commercial ag facility that will get our cost-per-pound down so that even if indoor flower drops to $600 a pound in California, we’ll be operating at a very healthy profit margin. So, our short-term plan is joint ventures and licensing deals in other states to help bring in cash and bridge these hard financial times, and then long term, we have this Palm Springs facility.”
The first phase of the building is a 62,000 square foot facility, but then, as people are allowed to sell across state lines, it will become a multi-100,000 square foot facility,” said Jennemann. Until then, THC Design will start to be seen in markets across the country. “My team in LA does not have connections in Ann Arbor, Michigan, so it’s making sure that who we’re working with in these other states fits our culture,” said Jennemann. “The head of sales is the co-owner of THC Design and my partner in crime – she and I have known each other since sixth grade, and we’ve been together for half my life. I’m 41, and I’ve known her since I was 12. I run the grows and she runs the sales team, and she’ll be out there mentoring the team, but we need sales reps from the regions, because they have the relationships and the local connections.”
As far as what they are looking for in a partner, “Just respectable stand-up partners, people that do what they say,” said Jennemann. “Most of the time, anything people tell me I cut in half like immediately. It sounds like a joke, but in cannabis I cut it in half again, because a quarter of what people say is true. So, it’s really hard trying to find honest operators, and we also want groups that have an established and respected brand. But that’s really it. We want to make sure they’re financially stable, but we don’t need to work with a company that has a $400 million market cap. We just need people that are good people who do what they say and can perform.
“And lastly,” he added, “what’s really important is to think that THC Design would exceed or sell in the state as if that brand has market penetration. Just because THC Design is popular in California does not mean that in the state of Michigan it is going to produce sales or good luck with no marketing budget behind it. But Red, White & Bloom owns Platinum Vape, which is the number one selling brand in the state of Michigan. Nothing else is even close, and Platinum Vape does not have a flower line, and THC Design does not have a vape line, so there’s perfect synergy.”
Will we see XJ-13 and Crescendo in Michigan and other states? “Yes,” said Jennemann. “And that’s a big reason why for example, Platinum Vape wants us in Michigan, because they see that Crescendo for four years straight was one of the top-two-selling strains in Southern California.”
Its products could even wind up in Massachusetts. “We’ll see how things go, but Red, White & Bloom is in Massachusetts, so if THC Design knocks it out of the park in Michigan, that will be the next state that we’ll be working with Red, White & Bloom on. And of course, we’re not sure what’s going to happen at a federal level.”
As always, Jennemann has his eyes on the future, and I wondered what his timeline was for completion of these projects in the context of the industry’s growth. “It is in its infancy, so this is a time when there’s massive oversupply compared to demand, like any industry in the infancy of its lifecycle,” he said. “I think we have another 18 to 24 months minimum until the market starts to level out. For lack of a better term, it’s about weathering the storm over the next couple of years, and how do we do that? That’s number one.
“Number two is that I wouldn’t be sure about the future and stability of THC Design if we did not have the development in Palm Springs and knowing that we are going to have one of the lowest, if not the lowest, cost per pound produced in the state of California for indoor flower,” he added. “No one will be able to compete with us from a manufacturing standpoint. So, the fact that we’re going to have a manufacturing advantage combined with a solid brand, that’s my light at the end of the tunnel. But how we weather the next 18 to 24 months is the question, and for us it’s finding these licensing deals, and for the first time ever having to either take loans or sell equity because we absolutely see that over the next couple years we just have to weather the storm.”
Palm Springs will be online sooner rather than later, he added. “We should have our certificate of occupancy in February of 2023, and we should see the first flower coming out of it in June 2023
Does he plan on being acquired one day? “I’m not sure,” said Jennemann. “I’m truly not sure how things are going to work out. Whether we’re 100 percent acquired at some point, or my other half and I just sell some of the equity to bring in a little cash because we live a very frugal life, I’m not sure exactly. So much of it is just about federal laws and how things shake out?”
Is he a cannabis lifer or is there another iteration out there? “I think in my next iteration, I’m getting into waste; nothing to do with weed, waste compost,” he answered. “I thought I was going to sell THC Design back in 2016 as legalization was hitting, I thought I was going to cash out and move into compost.
“But that is my future, and it shows how dialed in I was all the way back in 2015,” he added. “A big reason why I hired the Spikers was because they represented American Waste Control, and I knew if I was going to try to get into the waste game, I wanted to be in bed with the biggest collectors of waste in the country. I also wanted to make sure everything with American Waste Control was buttoned up and dialed in, so for the last seven or eight years I’ve been developing relationships with them, not that I plan on partnering with them, but I figured I need to get in good.”
From weed to waste. You cannot make this stuff up. As a last question, I wanted to know what this California transplant thought of Oklahoma and its wild experiment with cannabis. “That’s just the market normalizing, because it was the wild west,” he said. “They didn’t have Metrc online, and they had such a low tax rate. Oklahoma was supplying the whole east coast, but as Michigan came online, Michigan started to supply the northeast, and now Oklahoma supplies Florida and Georgia. But Florida is having their grows come online, so Oklahoma is losing a big part of its customer base. Furthermore, as cheap as it is to be in Oklahoma, the grows were not built to be competitive from a cost-of-goods-sold standpoint. Even though they had crazy low occupancy costs, they didn’t know what they were doing, so it’s costing Oklahomans well over $1,000 to produce a pound of weed. Those different factors are why the shit has hit the fan in Oklahoma. The grows were not built out from an economy of scale standpoint to produce a low enough quality per pound for when the prices dropped, and furthermore, these other markets have come online, so that is what has transpired in Oklahoma.”
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