Taking your small cannabis production business to new heights in the age of adult-use marijuana can be hectic. We sat down with Lava Leaf Organics CEO Tony Martinez to talk about how growers can prepare themselves before they enter New Mexico’s recreational cannabis market. Martinez’ operation produces flower for local medical marijuana company Urban Wellness.
The Paper.: Tell us about Lava Leaf Organics.
Martinez: Lava Leaf is owned by my dad, my brother and myself. We’re going on our sixth year now. We use living soil as our growing medium for our Aztec operations facility, running all organic inputs and using no pesticides. For the first four years, we only had 25 plants in 400 gallon pots. Our original greenhouse is 2,800 square-foot, and from it we were producing about 160 pounds of flower and another 75 to 100 pounds of trim per season. Since we were not awarded a license in 2015, we had to find a LNPP [licensed non-profit producer] willing to share their plant count. Urban Wellness thankfully believed in us and our business plan. Over the years they have been an amazing partner, and we will always be thankful to them for giving us a chance when no one else would.
This is our third year now at 300 or more plants. It’s gone up and down, but we’ve had about 325 plants average over the last three years. This year we have 400 plants in the ground. Now that we are producing at scale we will be able to start generating income rather than subsistence farming. But up till now, it’s been a pilot project focused on developing systems.
The next phase is to stabilize our perpetual, year-round operation, so we’re building our first fully climate-controlled greenhouse, which will allow us to produce at least four harvests per year—maybe five, depending on the flowering times of each cultivar in addition to our seasonal crop.
As we move into adult-use cannabis, our plan is to continue to work closely with the partners that we’ve developed in the industry. We have a great working relationship with many business now, and we’re looking to collaborate as much as possible with other partners. One of our models for growth is working with sharecroppers—where they can put their microbusiness on our land. We would like our farm to serve as an incubator for people with similar passions such as sustainability, cooperation and growing high-terpene cannabis. We have 45 acres—35 of which are irrigated—we have room to grow for entrepreneurs that have an interest but maybe don’t have the capital or the confidence to go at it alone. By partnering with us, they will learn some of the methods that work at scale. Everything changes when you move out of your closet or your garage. We’re going to be mentoring select people seeking to enter into the market to help prevent what happened with hemp after it was legalized.
I’m from San Juan County, and what happened up there is a lot of people thought it was really easy. They over-invested—literally bet the family farm—and they lost everything. One of my biggest fears as an entrepreneur is seeing the entire state suffer. We want to make sure that people are well prepared, so the failure rate is less than it would be without that level of help. I recommend people gain employment and experience before venturing into the cannabis space as a license operator.
You faced some challenges scaling up. How can growers better prepare themselves for expansion?
I’d say the main challenge is getting capital. When you’re on a budget, you’ve got to choose where to spend your money, and without clear direction of when things are going to happen, it’s kind of hard to plan accordingly. Now that the new rules have been published, I feel much more able to prepare. Knowing that licenses will be available is great. In the past, licensing was so competitive. The last round of licensing was not fair, transparent or equitable, but I’m excited now because it’s clear that we have a path forward. Now there’s specific requirements for water usage and other sustainable business practices that are going to be a boon for us, because we are a regenerative farming operation using regenerative soil farming practices.
A lot of the challenges we encountered with scaling last year had to do with COVID restrictions, but things have returned to normal. There’s a lot of good traction there. The industry is rebounding after the pandemic supply chain disruption. I have less concern now than I did a month ago, and much less than six months ago. Or most of 2020. We could barely source gloves—we wear nitrile gloves to every portion of our operation to prevent cross contamination—and searching for PPE was a full-time job at the peak of the pandemic.
If you’re planning on being a soil grower, you need to buy next year’s soil this year. If you wait until next year, there’s a chance that there won’t be any. If you’re going to go through this microbusiness licensing, you’re going to be allowed 200 plants. You need to make sure that you have that soil before you get your license. That’s not how I’ve always operated. I’d wait to get clearance from the government before I’d start. Knowing what I know now, I would have made sure I had more capital up front, so I could get the supplies that I needed to prepare ahead of time.
However, the reality is that, like most others, we are on a budget and can only afford to spend so much. The majority of these people starting up are going to be on the same shoestring budget that we have been. Only so many people are going to have access to big capital. Having seen all sides of the business, you either start with technologically sophisticated production facilities with all the bells and whistles which are very expensive and energy intensive, or you start from more humble roots like we have—you plant what you can plant, give the plants your best effort, so you grow a product you are proud of and then move forward from there.
Lava Leaf Organics is a regenerative farming operation that focuses on growing high-terpene cannabis. Connect with them on Instagram @lava_leaf_organics or contact Tony@lavaleaforganics.com