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The Shady Side of Legal Cannabis?

S

Serapium

New member
Quick question that maybe someone here can help with. I met another grower here in Oklahoma today and the meeting left me feeling for the first time like maybe I'm not aware of the business climate that is likely to evolve post-legalization.

I was told that my sense of personal security and paranoia about conducting business is insufficient, despite this industry being legal in my State. I'm a new grower and as such am completely ignorant of what the previously-existing black market cannabis industry was like. Heck, I wasn't even a consumer so had no exposure to anyone involved.

Has anyone had meetings with people in the legalized cannabis industry that come from the illegal side and have carried the same philosophies of paranoia and caution into the legitimate business environment? If so, how did you deal with that? Is this something likely to endure in states where legalization is a fairly recent development? The meeting left me wondering if I should ratchet up my paranoia level.

Thanks for any advice or insight into how this has played out in other states over time.
 
I'll drop this,, the black market was and is mostly overlooked unless you do to much, cause problems etc for the LEOs. What has changed in the black market is the Mexican is almost seedless now, and running $80 per oz, the cartels are going to fight to stay in business here.
The concern I would have is early on OMMA posted all growers addresses and names, I have the PDF. I would certainly want security cams everywhere! My thought here is not the FEDs you need worry with but the thieves!
Then the stats are getting better as to patient/grower/dispensary numbers. But I have heard estimates 75% of growers and dispensaries will go under in the first year,,
Good Luck to you!
Paranoia, I stopped looking over my shoulder long ago, though having my patient permit is a great load off the mind! As soon as I new I was approved I planted outside for all to see!
 
legal in my view is a relative term. just because the gangster state has decided to join in for their piece of the action doesn't make it any more "legal". sometimes i feel calling a "criminal" is a safer option than calling those who are supposed to serve and protect. these stereotypical labels do not get to the root of who are the good and the bad guys.
 
I would imagine that any legal grower is going to bad talk small growers so they will stop. I know in Mass they charge ridicules fees to apply to grow for dispensaries so the individual is out in the cold as far as growing legally to sell to dispensaries
 
As others have pointed out, let the buyer beware. There are a lot of shadey people jumping on the cannabusiness wagon: I just read about a testing lab that got shut down for falsifying results (not telling us about the pesticides):
https://www.sacbee.com/news/state/california/california-weed/article222666355.html

I would be more prone to believe that more of the "legal" side is shadey than not--kinda like any big business that wants to bleed people for the most it can get. I stick with the business that are in it for the love of Cannabis--not the dollar bills.
 
This is my concern exactly, the people who will want to take what others have worked hard for. I can see that being either through outright thievery or even something simple like drive-by arson just to eliminate part of the competition. I'm aware of the posted addresses, but luckily our facility was not licensed until after OMMA removed addresses as public. You can still request the list and it will be provided as part of public record though.

I've now met a wide variety of people working within the legalized industry here and this was the first that I've come across who made me feel 'uncomfortable.' I gather it is because of his background and how he has been conducting business for the last decade plus. This stigma is going to have to go though. The meeting felt very much like a clandestine operation as opposed to a business meeting in which I was shopping for genetic stock for my licensed business that I draw a salary from and have freaking business cards, social media accounts, and a website for.
 
This is a very good point. As I stated in my original post I had no exposure at all to the black market industry prior to becoming licensed so my experience is sorely lacking within the 'traditional' cannabis industry. I suppose it's true that like any other business there will be people conducting their affairs with moral standards and exacting scruples and others who are just out to get whatever they can from whoever they can.
 
One of the things that I appreciate the most about the way that Oklahoma has legalized medical cannabis is that they didn't make it so that you had to already be part of the club to join. Yes, the license is $2,500 and that's not chump change, but if you can't fund a grow sufficiently you won't be able to compete and stay alive. The cost of getting a full grow up and running is way, way more than the $2,500 cost of entry. I know that other states have limited the number of growers they license (I think Ohio let in just 16?) and that some of them are charging upwards of $100,000 just to get a license, so all in all Oklahoma is probably the easiest state to get licensed in anywhere. There are somewhere in excess of 1,200 licensed growers here now and that number keeps rising. I hope I didn't give the impression that I was bad talking about another grower because that was not my intention. His facility was clean and his plants were very healthy. He was just obviously stuck in a mindset that he's been conditioned into for many years and I didn't quite know how to interface with that.
 
I totally agree with this sentiment. I'm much more likely to suspect a large corporate interest of wrongdoing than I am an individual. I guess I'm kind of an optimist in that I think most people are generally good people. Unfortunately sometimes when individuals group together and there's a lot of money involved pesky little things like morals and ethics get sidelined. This is why I don't have any desire to become a 250,000 square foot factory grower. I don't want or need the complications that will come along with that. I'm just happy to be growing my plants and provide 100% pure organic medicine. I also want to do it with a sense of personal security and safety though and this guy yesterday made me question that.
 
Seraplum, I know a few commercial growers in Washington and Alaska and a handful in Oregon. Between them they have just about every type of grow setup. To be able to grow year round you need to make a substantial investment before even getting started. The biggest challenge you're going to face has nothing to do with Illegal growers, the black market or thieves. The biggest challenge you're going to face is competition from legal growers and the states licensing and distribution regulations_ for instance the state of Oregon really screwed up because they didn't limit the number of grow permits so now there are more legal growers who have invested a lot of $ and can't compete with the larger operations....and the big guys haven't even gotten into it yet.
If you're a small grower (< 10,000 sq feet) then you need to really work at developing relationships with dispensaries and that takes time_you need to prove you can deliver quality product reliably. Three years ago the price/gm in Oregon averaged $12-18. Now you can get gms for $5 and most dispensaries have $1 gm days. Its insane. Way too much product for the demand.
You either need to work within a very select market or be able to supply a lot of product 12 months a year. And if you can develop distribution channels to dispensaries and producers of extracts, distillates, oils, edibles, etc. even better.
You might find the post I made about a month ago called "Fall Harvest" interesting. Its kinda like a tour of some of the farms I've been to.
The states that have legalized for medical and or recreational are all counting on the coin they're gonna get from sales taxes. Of course they are going to be insatiable. They need to make sure those who do invest in the business have a chance of competing within an established market and increase the number of permit holders as the industry grows. The big guys will get into the act but not until Federal regulations allow for interstate transportation. And that won't be coming for a while.
As a commercial grower you need to get involved with the process in your state, get together with other growers and develop a consensus on how you believe the industry can grow best in your state. Then get the state to commit to addressing your concerns.
There's a big push going on now to find legal means of transporting weed across state borders between states where med and rec are all legal_ so product can be transported from Washington to Oregon To California to Nevada and so on.
Those will be your real concerns. The states are going to do whatever they can to protect their investments_ for instance Oregon state police and OLCC cops are constantly searching for illegal farms, transport of unlicensed product and conducting aerial and ground surveys. They want their tax dollars and are going to do what they can to insure they get them. All licensed farms are legally required to be fenced with security cameras. Growers must provide access to this footage whenever requested. Visitors must be logged in and identified. Everything must be accounted for and tracked on a daily basis.
I couldn't believe it but the growers in Oregon even need to weigh and account for what they throw away!
If things are just getting started where you're at then the state needs to take a close look at how the industry has progressed on the west coast and make sure they do whats best for the growers they issue permits to_ its in the states best interest as well as the farmers.
There is so much going on here that its impossible to hit on everything so if you have any more questions just let me know.
Wishing you the best of luck!
 
Don't get caught up in worrying about competition with the black market. Your state will get more involved with that to protect their own interests once things get moving and they see how much $ there is in it for them. As a commercial grower you need to get together with all the other permitted growers in your state and form a coalition that will protect your investments in the industry. I can't stress this enough,
I know I'm "beating this over the head" but if you want to succeed now and in the future then don't neglect this aspect. If you haven't yet there are commercial growers conferences all over in different states and countries throughout the year where everyone gets together and brings all their concerns to light. I go to the Cannabis Classic every Spring in Portland,Oregon. Its great way to meet folks and keep on top of whats happening. Check it out in 2019!
 
It sounds like Oklahoma is possibly getting itself into a similar situation as Oregon. I know it sounds crazy but I hope not. Like you said $2500 for a license is nothing compared to what you need to invest in a commercial grow operation. A drop in the bucket for sure. If there are 1200 licensed commercial growers (not counting medical users who just grow their own) then there are already too many and a good percentage will fail, unless they have the funding to persevere for a few years at least and/or already have developed a clientele that buys their products on a regular basis. One of the recent strategies is to not only grow cannabis, but to dry, cure, package, produce flower, their own extracts, edibles, topicals, gel tabs, etc.and sell them in their own dispensaries. Don't get me wrong_ I'm all for supporting the smaller family owned operation_ in fact thats exactly what you need to get your state to protect_ the small guy.
Consider where beer was 30 years ago...not much to choose from compared to these days where there's a huge selection of domestic craft beers to tempt you...those craft beer producers have made significant impacts on their local economies and small craft cannabis growers can achieve the same results_ but they must work together.
None of the commercial growers I know have any grief about what we do with our home grows. We really don't present any competition with them.
We can grow flower, make hash and some other extracts fairly easily but there's a lot we can't do unless we're willing to spend a fortune on equipment.
And most states where it is legal to grow your own limit you to a small and specific number of plants.
When I look in my grow space with 6 plants and then at a full 5000 sq foot grow room/greenhouse...that really puts things in perspective!
 
I'll second that alltatup_ support the small family owned operations if you buy commercial. They are the ones who put love into their crops. When the big tobacco companies get into it ...boycott them!!!_they need to be put in there place. Buy craft cannabis from those who care enough to grow green and clean!
 
seraplum_ you're right on track_ keep your perspective and don't get sidetracked. Keep going, keep growing and here's wishing you all the success you've dreamed of!
 
ZZ, I can tell you there is no limit as to how many grow or dispensary licenses are issued, the state here dont give a damn about the taxes, they would just as soon keep it illegal! We the people forced it with our vote!
The one thing they did do is make it so out of state investors are very limited

It is certainly not going to be an easy road!
 
Serapium I have a question, with the feds legalizing the growth of hemp, how does this effect us here? I have read in other states growers have turned to hemp (for CBD oil) to keep their heads above water when the prices bottom out.
 
And not just cannabis: I refer to all Cannabis-related businesses, which are popping up everywhere like weeds. I won't fk with a website that doesn't come right out and say who founded it and who they are. I won't buy products from companies that appear just to be grabbing money hand over fist. For example, I really like KorLor420 (silk rosin bags) because of this policy:
"And check this out! It is a policy of KorLor420 that the majority of our team are these fantastic individuals that may have (probably) had a hard time finding a job. Like Vets, DV victims, autistic, down syndrome or down on my luck from every walk of life etc.. Our rule is to hire 75% of our employees from the mentioned groups. We offer an environment where they can thrive, instead being in constant fear of losing their job."

It's attitudes and intentions like KorLor's that will keep me coming back.
 
ZigZag thank you for taking the time to provide your perspective. Oklahoma is very much like Oregon in that there are no limits on the number of growers that can obtain a license. There are currently 1,300+ and more added every week. The majority of those are people who live on agricultural land already and just threw up a 10x10 tent in their barn. The number doing what I am (full scale commercial) is much smaller, though there is no way to quantify the exact numbers. Also, Oklahoma is limited to indoor grow operations only, so the cost of entry for large scale operations is much higher than a state like Oregon where outdoor grows provide economies of scale that you simply cannot achieve when walls and environmental controls are required.

I'm absolutely on board with establishing those relationships you talk about early on, and plan on starting the rounds to dispensaries this coming week - well before I will have any product that is marketable. It's important though that those relationships are established early.

The vast majority of people getting into the grow game that I have come across are in it for the quick buck and seem to think that they can just throw up some HID lights, put some seeds in soil, and sit back to collect the cash. Most have no idea whatsoever what they're getting into. They don't understand pH, ppfd, VPD, etc and think their cannabis plants are just going to grow like... well, weeds. In addition, two of the three growers I have spoken with had never even heard of 280e tax law and don't have any kind of accounting in place. I would estimate that by this time next year the number of license holders who have chosen to renew their annual $2,500 license for the following year will be greatly reduced. I wouldn't be surprised to see an 80% fallout rate or better.

For us, we're focusing on quality as opposed to quantity. I fully anticipate that there will be an absolute glut of low quality larfy buds available at bargain basement prices by May or so of this year. The going price currently for sales from cultivators to dispensaries is over $4,000 a pound but that is totally due to lack of supply and will change dramatically as more harvests come online. We were among the first to get rolling in Oklahoma but won't have properly cured medical cannabis to take to market until March. Product that we do take to dispensaries will be nothing but top shelf. This is the only way that we will be able to stay in the portion of the market where there is some price support.

I'm starting to see some real indications on a national/international level that federal legalization is likely not very far around the corner. Take for instance the fact that three Washington insiders, including Howard Dean (ex DNC Chair) and Michael Steele (ex RNC Chair) have been appointed to the board of advisors for Canada's largest cannabis cultivator Tilray (which happens to be majority owned by Silicon Valley Billionaire Peter Thiel). I'm hoping that won't happen for a little while, actually, so that I have time to get my legs underneath me and establish a brand. The game is definitely afoot though. Big money sees the dollars and wants a piece.
 
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