The fickle nature of humans and the trends that drive them to make consumer purchases can be unpredictable. Sometimes hot items can go cold in a hurry, leading a profitable business one day to be in the red the next.
That’s how Paul Weaver and his brother found themselves sitting on a 76,000-square-foot building in Central Washington, with 50 employees, a non-existent customer base and little hope of salvation. The two brothers had run a thriving company that wholesaled to the floral industry. It went well until dried flower arrangements lost their luster. Next was a profitable run with silk florals that helped the company bounce back. But unfortunately, that line of products — and the business that supplied it — also eventually dried up.
Riccardo, one of the farm’s growers, carefully prunes a plant.
However, like most successful entrepreneurs, Weaver refused to throw in the towel. He wondered: Is there a way to save the business and the building?
Enter Fred Brader.
With a solid background in packaging and branding, Fred Brader also had plenty of experience in dried flowers, as he was the packaging supplier to the Weaver brothers and helped them land and maintain their largest customer, Costco. Weaver and Brader realized that the passing of Initiative 502 in 2012 might be a great way to save the company and remain in the dried flower business, albeit with a different sort of dried flower.
With that, Orgrow was born.
Good timing seemed to be on their side, as the existing warehouse was ideally suited for indoor cannabis production and most of their long-term employees were eager to keep their jobs. Retraining those employees for marijuana production seemed like a fairly simple proposition.
Because the partners had a business background, but lacked farming skills, there were early bumps in the road. They soon learned that indoor cannabis cultivation on a large scale required specific skills that were not common in rural Washington state, and as a result, the startup was plagued with plenty of mistakes, questionable products and missed opportunities. However, the pair managed to hang on and hone their focus.
“We’re still experimenting with new practices and constantly strive to improve our methods,” Brader says. “However, at the end of the day, we decided to focus on top-shelf indoor flower. We carefully dry cure our buds for six weeks and hand-trim all retail product. That kind of care shows in the final presentation.”
Both partners also learned from their prior experience selling to Costco that listening to the customer is paramount.
“The Orgrow team is very customer-centric,” Brader says. “We listen to what our retail partners say and constantly strive to create relationships that are mutually beneficial. Our experiences selling to Costco taught us to take plenty of notes and to be open to suggestions from buyers. That’s how you build a strong sales partnership.”
One compliment Brader hears regularly from both retailers and equipment suppliers is about the quality of Orgrow’s ethanol hash oil. The company takes great pride in its proprietary process that retains the plant’s natural terpene profile, while eliminating the production of chemical waste by reusing ethanol for multiple extractions.
Wes, a driver and part-time lab assistant
for Orgrow, stops for a photo-op in the
lab.
While flower producers in Washington often find themselves in a race for the bottom of the market, “the EHO has actually helped us get into many stores that we would not have gotten into without it,” Brader says. Once those relationships are developed, the company can improve its sales pipeline by eventually adding flower and prerolls.
Cannabis regulations in Washington are unique, and two separate conditions conspired to create an exceptionally difficult environment for cultivators. First, unlike Oregon, Colorado and California, Washington prohibited vertical integration. With the stroke of a pen, that simple rule ensured fierce competition amongst growers and simultaneously guaranteed that retailers would have a “buyers’ market.” Second, while the state restricted the number of retail licenses it would grant, there were no limits on the number of growers. These two factors created a very challenging environment for marijuana cultivation that continues to this day.
Brader and Weaver saw the writing on the wall and spent a lot of time and energy working on efficiency. They also did a lot of research and made decisions based on the best available published information on controlled environment agriculture. That research and discipline, combined with a relatively low cost of land and labor in rural Washington, allowed Orgrow to keep its production costs at or below most indoor competitors.
Orgrow also placed a lot of emphasis on hiring. While the cannabis business retained many employees from the original dried flower company, Brader was extra careful when it came to key personnel. He is quick to state that two of Orgrow’s most important positions are a head grower and quality control manager. Both are critical to the success of a marijuana business, in Brader’s opinion.
“Without great product and consistency, you’re dead in the water,” he says.
Inside the lab, Josh prepares a fresh batch of extract. Orgrow’s ethanol hash oil regularly receives accolades for its quality from both Washington retailers and equipment suppliers.
While Orgrow focuses primarily on flower, the two partners understand the value of a pragmatic approach. This has resulted in a corporate culture that is flexible and fluid.
“We love flower and believe we have the best; however, we also produce pre-rolls in three sizes, ethanol hash extracts, caramels, molasses cookies and several other products,” Brader says. “In addition, we have great relationships with numerous other producer/processors and sell them clones, ready-to-flower plants, bulk dried flower and trim. This is a dynamic business, and in a way, we’re all pioneers. If you’re not open to new ideas and practices, you’re probably in the wrong business.”
Orgrow is in the process of launching a new flower brand that will be packaged in jars that pay homage to Central Washington’s agricultural heritage. The new, top-shelf line will feature a play on words “Washington Extra Fancy,” which is a specific grade given to the highest quality apples.
Asked about major mistakes or advice for others entering the marijuana cultivation space, Brader was quick to list several: “Listen to employees and have an open-door policy; be flexible and ready to make changes to your business model; treat retail partners as you’d want to be treated and never dismiss their feedback; hire based on work ethic and prior experience, and avoid high-priced ‘consultants’; focus on branding, marketing and packaging right from the start.
“Growing good cannabis is easy,” he adds. “However, it’s the packaging and marketing that drive sales at retail. Have an open mind and make sure you’re not in the industry to get rich quick, as it is not going to happen!”
Orgrow has found a nice niche and enjoys strong relationships with its retail partners. The company’s motto is “quality product at fair prices.” With its open-minded approach, great employees and flexible business model, Orgrow is positioned to thrive in the fast-moving, ever-changing, legal cannabis industry.