Greenhouse Grass to Challenge Canadian Super Grow Facility
NEW YORK ( MainStreet) Bobby Genser invested $100,000 to assist in launching a greenhouse two hours away from Denver to satisfy an increasing demand for pot.
"There's more demand for recreational cannabis and prices have gone up," Genser told MainStreet.
Compounding the shortage is Colorado's 70/30 rule, which requires licensed dispensaries to grow 70% of the cannabis that a dispensary sells.
"When dispensaries run out of pot, they have to go to a wholesaler or licensed grow facility where cannabis is more expensive and you are at the whim of what the market wholesales," Genser told MainStreet. "Currently, wholesaling per pound is $1,600 to $2,300 per pound."
The risk is selling out faster than the time it takes to grow.
"Denver is running out of space and room for licensed dispensaries to expand," Genser told MainStreet. "Zoning in Denver is such that the industrial space that has been taken up by growth facilities is dwindling."
The saving grace is that dispensaries with an Optional Premise Cultivation License (OPCL) can build grow facilities in marijuana friendly counties such as Pueblo and El Paso counties where land is for sale for about $1,500 per acres.
"Pueblo is one of the municipalities that has embraced the industry as far as legality goes so it's natural that growers would gravitate toward that economically disadvantaged area," said Darrin C. Duber-Smith, professor with Metropolitan State University in Denver. "These counties need the revenue and the jobs. Look for other rural areas of the state to follow suit."
Dispensaries are trending toward growing more marijuana in greenhouses in order to meet the needs of recreational adult use cannabis. A greenhouse is a covered structure, often made of glass, used to control temperature and humidity in the cultivation and protection of plants.
"The shortage of cannabis is definitely a threat but it's short lived because we are building out the infrastructure for greenhouses in Pueblo and will keep going and growing," said Genser.
Unlike Colorado, California doesn't have a percentage mandate.
"We have the flexibility to buy from patient vendors," said Derek Peterson, CEO of Terra Tech Corp and an owner of the Blum dispensary in Oakland. "We have relationships with our collective members that also cultivate consistent and high quality strains to augment our own production."
Overall, requiring dispensaries to grow their own can limit choice and quality.
"It is flawed because every strain requires different cultivation techniques and conditions," Peterson told MainStreet. "For a club to grow 40 different strains and to do well at all of them is unheard of."
That's why the CEN Biotech super grow facility in Canada may very well fill a gap in the near future if and when the federal government legalizes pot.