In May 2024, Green Horizons hosted a ribbon-cutting ceremony to mark the commencement of operations at its high-tech production facility in Coachella, California.
Now, the company has reached a major milestone on its path to profitability: Green Horizons is cash-flow positive within the first 12 months of operations, “which was my obsession going into this,” says CEO Carlos “Los” Arias.
Flostar Group: A full-circle moment for father and son
By Garrett Rudolph
For Los Arias, Flostar Group is much more than just an insurance brokerage. It’s a connection to his 84-year-old father, Manuel F. Arias, and a symbol of their rebuilt bond over the past decade.
Manuel spent more than 35 years in the insurance industry, building a successful health benefits brokerage, and hoped Los would take over the family business when the time came.
“But my heart wasn’t in it,” Los explains.
Instead, Los entered the cannabis space in Colorado after finishing law school.
“It didn’t go over well,” he says. “It was a really challenging moment in our relationship where he was really disappointed. He just didn’t understand what I was doing.”
Manuel viewed marijuana through the lens of his generation and his Cuban-American heritage. It was a gateway drug, he believed, and his son was basically becoming a drug dealer.
But according to Los, when cannabis helped his father during his recovery from a stroke, with the blessing of his attending physician at Cedars-Sinai Medical Center, it opened up his eyes to the healing properties — and also helped heal the relationship between father and son.
That was 2014. A decade later, Manuel proudly attended the Green Horizons ribbon-cutting ceremony.
And after getting Green Horizons up and running, Los quietly reached out to Amarilys Serrano, Manuel’s longtime associate in the insurance industry. The two of them secured the appropriate licensing, and leveraging Serrano’s vast experience in insurance with Los’ network of business connections, they co-founded Flostar Group. The business is, in some ways, a tribute to Manuel and his hope of working in the family business with his son. He serves as the company’s chairman emeritus.
Flostar services the employee benefit programs for numerous cannabis companies, including Green Horizons. However, the insurance brokerage is not relegated to the cannabis sector, and in fact, most of its clients are not involved in the industry.
And finally, after all these years, Los is following his father’s footsteps in the insurance world, while maintaining his individuality as a cannabis entrepreneur, though those industries are inexorably linked.
“Ultimately, cannabis is medicine,” Los says. “It helps people. Giving employees benefits and providing for them in that way is part and parcel to that.”
But planning and doing are two different things, especially in California cannabis.
“The execution side is always the real litmus test,” Arias says. “I think what I’m most proud of is the quality. It took us a minute to dial in the sizing, but the quality was there out of the gate. We were selling $700-$800 pounds in the third and fourth quarter of last year, and when the Croptober impact came, we barely felt that. We had a plan. We stuck to it. We’re still here, and we’re accelerating.”
Green Horizons has taken a slightly different approach with sales than the average cannabis company, focusing on a tight-knit group of wholesale buyers.
“We’ve gone deep with fewer people rather than just a scatter-shot approach,” Arias says, “which I think is another way that companies often make mistakes. They lose that exclusivity quotient. When people can’t get your product, it makes them want it more.”
Arias has also held firm on getting paid cash-on-delivery. He’s had retailers reach out asking about net-30 or net-45 terms.
“Net-30 ends up being net-90 and net-90 ends up being never,” he says. “So we can’t do that. A lot of that is predicated, at least on the cultivation side, on quality. I’m able to command COD because I’m putting out quality work, and then I also have the ability to say there’s a lot more coming. And if you align with me now, I can do X, Y and Z for you, six months from now, 12 months from now, 24 months from now.”
While the company will eventually shift its focus to building out its SOL brand, Arias is focused on staying in the wholesale lane for the moment.
The company is also fortunate that it was able to raise the necessary capital without resorting to predatory lenders, with much of the startup funds coming from core team members, including Arias himself. It’s one of the reasons they’re as committed as they are, showing up early, staying late and approaching the business with “a zealot-like focus.”
“We’ve carved out a niche in the valley just by being who we are and not really worrying about what other people are doing,” Arias says. “My obsession is what happens inside these four walls. And that’s it. I keep it simple, and that’s the mandate to the group.
However, not all is sunshine and clear sailing in California’s tumultuous cannabis industry. As of this writing, a deadline looms for a tax increase that could further cripple the Golden State’s legal market — another blow to state operators paying some of the highest cannabis taxes in the nation.
The new law would increase the excise tax on cannabis sold at retail from 15% to 19% starting on July 1 and would require the California Department of Tax and Fee Administration to update the excise tax rate every two years moving forward. It seems almost impossible to stop the tax increase at this point, and most people believe it will have a devastating effect on an industry that has never truly lived up to expectations — with much of the fault falling on regulators and lawmakers.
“I really hope Sacramento gets their act together,” Arias says. “That will be, in some ways, the final straw. We need some relief there. It’s been really hard given that so many people are struggling to mobilize any kind of operator-led movement. I think a lot of people are just waving the white flag, and it’s a mess.”