Marijuana Business Rewards Creative Strains
NEW YORK ( MainStreet) Diversify, diversify, diversify. For urban agriculture company Terra Tech Corp. (TRTC), which has a prominent marijuana bent, that mantra of versatility is of the essence as the uncertain future of weed legalization plays out.
Terra Tech CEO Derek Peterson happened upon that strategic arrangement in an unorthodox manner, backing into the public marijuana business as he did. The former Morgan Stanley investment banker launched GrowOp Technology in May 2010 as a side dalliance focused on developing large scale portable hydroponic chambers well-suited to growing cannabis. Morgan Stanley canned Peterson for his pot shenanigans seven months later, but he got his GrowOp investors together in February 2012 for a reverse merger with Terra Tech Corp., an agricultural research and technology company that was also ridding itself of a brief VOIP period.
The same principles that worked in cannabis hydro cultivators applied to traditional agriculture, and commercial hydroponic farmers and greenhouse farmers wanted a piece of the pie in terms of the easy-to-use GrowOp equipment and its expansion potential.
"They had a desire to expand that brand throughout the U.S., and we had an appetite to pick up a business that bifurcated our company a bit," Peterson told MainStreet. "We were a little bit worried that cannabis legalization was going to slow down, and I didn't want our public company shareholders to have all their eggs in one basket."
Moving beyond pot was a prudent business play for Peterson and his company.
"So we essentially diversified -- just in case this imploded on itself, we still had sort of a sound structured business that's symbiotic in nature," he said. "We collectively have all these green houses across the U.S., so if legalization takes hold and spills the other way, we can plant a seed and become large-scale commercial growers over night."
Garnishings and greens sold at Fairway supermarkets in New York City, for instance, can easily be exchanged for their narcotic cousin.
"We're just growing basil right now, and we can change that at a moment's notice," he said. "That's the longer term vision. We want to hedge on the negative side, but if things roll positive for us, we want to be able to have first mover advantage into the market place."
As marijuana grows in popularity and looks to expand in legal acceptance, Peterson thinks that the horticultural foundation of Terra Tech will serve the company well.
"Our kind of long-term mentality is, 'Who do you want growing your weed?'" he said. "Do you want a food-grade facility that has experience growing food in a GAP-certified environment, or do you want the guy who's potentially growing in his basement, or warehouse or whatnot with no standards?"