Friday, March 24, 2023

Are Micro Cannabis Producers the Key to Supply Shortages?

Faced with Shortfalls, Dispensaries Vow to Protect Medical Cannabis Patients


Fearful of shortages with recreational cannabis sales looming, an emergency state rule change just increased the maximum number of mature cannabis plants that licensed growers can grow at one time to 20,000. New micro growers can grow 200 plants. Dispensaries across the state will be doing their best to take care of their medical cannabis patients, even with predictions of cannabis shortages. The key to supply and demand just might be micro-producers. Based on what's come down in other states that have legalized recreational cannabis, the increase count for growers is too little and too late.

“Everyone’s anticipating a shortfall pretty quickly. We're in a cultivation industry. Kent Little, General Manager of the Sacred Garden told the Rolling Paper in a recent interview. “It takes time to grow the plant; curing time, production time, bunching and trimming.”

Little says the biggest issue right now in the state is greenhouse capacity. “A lot of producers are scrambling to expand their facilities and meet these new plant counts. Everybody needs to figure out how many greenhouses, how much more acreage and how many more acre-feet of water they need.”

Sacred Garden is going to try to fill their cannabis needs by themselves. “We're expanding our cultivation facilities, and expanding our indoor facilities as quickly as we can. Our ability to work with other growers is directly linked to their ability to bring products that meet state and our quality standards." Sacred Garden grows organically to produce "very clean" cannabis. "We really care about the medicine that we're providing our patients and continue to hold ourselves to that same standard going into the rec market, ”Little said.

With rec sales looming, there’s a demand in the entire production system for cannabis whether people are running extraction facilities or running vertically integrated companies or need to buy flowers for their dispensaries or for retail sales.

Even though it's called a micro license, there's a race going on around the state to go from growing 10 plants indoors to growing 200 plants. The success of micro-producers is going to be in their ability to produce high-quality cannabis that meets all the testing requirements that dispensaries around the state have had to meet for the last decade.

“Everyone thinks there's a magic trapdoor in cannabis. There's not. Cannabis is a very difficult industry. There's a lot of things that can go wrong. There's a lot of things that can go right. It's farming,” Little said.

“People within this business have a pretty big heart for the most part. There should be plenty of business for everybody, and to support diversity amongst producers and the new ones coming in. It'll be interesting to watch this whole thing transpire. We're climbing a mountain right now and no one can see the peaks,’ Little concluded.

David White, founder of Organtica, told the Rolling Paper, “Until we figure out what this market is going to look like two years from now, our goal when we renewed our license, was to make sure that patients have safe access to the cannabis that they need. Once we feel that there’s an adequate supply of medical cannabis, and it is no longer in danger, then we will open it up to recreational.”

Organtica reached out to help micro-producers and guide them through the experience of setting up their businesses. “We asked nothing for it in return, other than that when growers had reached the point when they are ready to sell their product, that they give us a gentleman's agreement; after testing, Organtica has the first right of refusal, so that we can stream that cannabis in the fall,” White said about their support process for micro growers.

“it's really quite evident with this new class of micro-producers, that we've got some excellent producers. They really have heart and they're in it for the right reason. Not to make a trillion dollars... they're into it because it’s near and dear to their heart.  It's their passion,” White said.

Medical cannabis was approved for sale in New Mexico in 2007. There are approximately 120,000 registered medical cannabis patients in New Mexico. Maxwell Griego, Operations Manager of Seven Clover, described his view of the coming legal rec sales to the Rolling Paper.

“When we hit recreational, you're automatically going to have something like over a million people in New Mexico that are over the age of 21, ready and able to purchase cannabis starting on April 1. Based on the precedent that we've seen in other states, we expect that to really reduce the stock of available cannabis in New Mexico. Medical patients have served the cannabis industry in New Mexico for the last 10 years and they are first and foremost in our mind,” Griego said”

Griego explained “there’s a lot of deals going down”, and producers are starting to work closely together to grow plants versus what has in the past been a very competitive market. “Seven Clover is actually really excited to start helping some of these new producers. We really want to get in there and start helping them get on their feet and be able to produce because we see that it's shifting from that really competitive mentality to a more collaborative mentality.”

The prospects of recreational cannabis are “really moving” for Seven Clover. “We're just really, really happy to be part of this movement. We want to see this recreational bill benefit New Mexican citizens first and foremost, and then anyone else can come and join in,” Griego said.

Seven Clover is trying to serve as a model for how to navigate the cannabis landscape. “It's really not a competition. It's its coalition. The huge disconnect between state and federal laws speaks to the disconnect that every single state that has ever gotten a medical or recreational program has had to face, and it's really unfortunate.”

Next question for the state: When will there be an emergency state rule change to increase the number of plants micro-producers can grow?


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