After a year of experimentation, Greenhouse of Flagstaff is ready to reap the benefits of having one of Arizona’s largest legal, outdoor cannabis farms.
Originally started in 2013 as a dispensary and indoor grow, Greenhouse of Flagstaff recently expanded its cultivation operation with a 24-acre plot in the Verde Valley of central Arizona, including two acres of land dedicated to outdoor cultivation. Although the farm sits at approximately 3,200 feet above sea level, temperatures during the summer can easily soar past 110 degrees and permanently damage cannabis crops left out in the blazing heat.
While cannabis is well-known for being a light-hungry crop, the company’s founders quickly discovered there was such a thing as an overabundance of sunshine.
“Even with the higher elevation, the intensity of the sun overly stressed the plants,” says chief business officer Doug Daly, who co-founded Greenhouse of Flagstaff along with brothers Brandon and Ryan Hermansky. “It’s much cooler temperatures than the high desert, but the sun is still so intense that you really need to shade it all.”
So that’s exactly what the company did.
With no cap on productions size in Arizona, Greenhouse of Flagstaff aims to expand its outdoor operations by 30% every year.
Throwing Shade
In 2017, Greenhouse of Flagstaff’s first outdoor crop suffered heat damage, so the company installed a massive shade house at the beginning of 2018 to protect the plants by limiting the penetration of photosynthetically active radiation (PAR).
The shade house stands roughly 20 feet off the ground and covers nearly an acre of the outdoor grow. It mitigates the intense, high-elevation sunshine, while still allowing photosynthesis to occur.
“It kind of evolved through necessity,” chief operating officer Brandon Hermansky explains. “At first, we did hoop houses, but it wasn’t substantial enough.”
The owners started researching solutions from outside the cannabis industry and discovered that many commercial farmers with similar weather challenges were using shade houses to protect their crops.
Under the company’s first shade house, the protected crops began to flourish. The intense heat was successfully reduced, but Mother Nature had another surprise in store.
“A massive hail storm hit during the final weeks of flowering that could have wiped out the entire crop,” Daly says. “The shade house we had in place actually caught most of the hail, but the structure was essentially destroyed.”
The golf-ball-sized hail didn’t rip though the mesh screen, but the cumulative weight bent the five-inch steel support beams. The crops were safe, but the shade house had to be rebuilt.
“We learned that we had to make it stronger, but that it was a good game plan,” Brandon says.
Following the storm, Greenhouse of Flagstaff built its second shade house, reinforced with stronger steel beams and a thicker mesh screen that blocked out about 60% of the transmitted PAR. The retrofit cost the company roughly $125,000.
“When you compare that to what it would cost to build out a 50,000-square-foot, indoor cultivation facility, it’s a bargain,” Daly says.
Because Arizona producers are not limited to a certain size, Daly and the Hermansky brothers decided the best course of action would be to expand the shade house to supplement the year-round production of two 3,500-square-foot greenhouses and the original 3,000-square-foot indoor facility.
Several hoop houses inside the shade house allow the company to produce multiple outdoor crops a year.
“Putting all your eggs in a one-harvest-per-year basket is scary to say the least,” Brandon says.
The founders of Greenhouse of Flagstaff (from left to right) Doug Daly, Brandon Hermansky and Ryan Hermansky, met in high school.
More than Mesh
Building an outdoor operation wasn’t solely based on saving money. Environmental responsibility has been part of Greenhouse of Flagstaff’s mission statement since the company’s inception. As one of the state’s first licensed operators, Daly and the Hermansky brothers knew sustainability would factor heavily into the success of Arizona’s medical marijuana program.
Greenhouse of Flagstaff hired consultants to advise on the best ways to reduce its environmental footprint and incorporated cover crops and beneficial insects into the outdoor operation.
Daly says Arizona consumers are starting to look for organic standards in medical cannabis products, but not many growers in the area are making the effort to implement sustainable practices.
Canyon State
A worker trims colas at the company’s greenhouse.
Unlike most other states, Arizona only issues licenses to dispense medical cannabis. Licensees can grow or process their own cannabis, or they can buy product from other license holders.
Greenhouse of Flagstaff currently has about 87,000 square feet of cultivation space and expects to harvest 3,500 pounds of flower this year. Brandon Hermansky says nearly two-thirds of the harvest will be sold to other medical marijuana dispensaries at a wholesale price between $900 and $2,000 per pound, depending on quality.
“We harvest at separate times, so we do market the flower as indoor, greenhouse and outdoor,” he says. “If the outdoor flower we’re about to harvest meets what we’re expecting, we will be able to sell it at a slight discount to our indoor flower.”
Daly says the remaining flower from this year’s harvest will be used for the company’s line of flower, oils and concentrates and its Pure line of edibles — assuming the state allows companies to keep producing extracts. A June 26 ruling by the Arizona Court of Appeals declared that cannabis extract does not fall under the protection of the state’s Medical Marijuana Act. The decision sparked waves of confusion from the state’s 130 licensed marijuana dispensaries on whether to pull product from shelves or continue sales as usual. Daly doubts the decision will affect the state market or the company’s production, but as a former attorney, he is taking the threat seriously.
“For the time being, we will continue to only produce products in compliance with the Arizona Medical Marijuana Act,” Daly says. “However, the decision is demonstrably inconsistent with prior opinions of the Court of Appeals and Supreme Court and we are confident it will be overturned on appeal.”
Greenhouse of Flagstaff isn’t solely an outdoor operation – the farm has two 3,500-square-foot greenhouses and a smaller indoor growing facility.
Future
Greenhouse of Flagstaff plans to double its cultivation space every summer for at least the next three years. The expansion is predicated on Arizona’s growing medical program and hopes that adult-use legalization will soon follow.
According to Daly, the patient population in Arizona has steadily grown 30% year-over-year for the past six years. The latest statistics from the Arizona Department of Health show nearly 170,000 patients enrolled in the state’s medical program — although only 57,345 were renewal patients. Daly believes there will be a surge of new and returning patients as cannabis prices continue to fall.
“There have likely been between 400,000 and 500,000 unique patients (enrolled in the program), but the high cost of maintaining the card has deterred some patients from renewing,” Daly says. “By bringing more value to patients we’re starting to see those renewals increase.”
Arizona voters nearly passed an adult-use measure during the 2016 election. The initiative failed by just over 67,000 votes, with 51.32% of the votes in opposition. Three proposed initiatives in 2018 to legalize adult-use cannabis failed to make the ballot.
Greenhouse of Flagstaff president Ryan Hermansky believes a ballot measure will pass in 2020 during the next presidential election when there is a higher turnout of younger voters.
“You can’t be spinning your wheels during a mid-term,” he says. “It’s not the voter population we want.”
Daly agrees, especially since the fears from opponents of the medical program have never materialized.
“I think the industry has shown how a program can be run responsibly and Arizona is ready for adult use,” he says.