HomeGrown Turns Grey Market Experience Into Green

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Homegrown Sat Down With Us to Share Their View From Washington State

As the cannabis business begins to take shape and companies start competing for brand recognition, having a strong name and an even stronger pedigree have become especially important for producers. A quick riser seeking to make their name in Washington’s marijuana market is Homegrown Oil, a leading producer of marijuana oil products hoping to eventually penetrate the full spectrum of medical and recreational cannabis jurisdictions. We sat down with Mr. Farrell, the CEO of Homegrown Industries to discuss the inception of their brand and the innovative ways they are seeking to expand it.

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One of the most interesting aspects of the cannabis business is the variety of backgrounds that participants in the industry have come from, since there are no college degrees offered in selling legal marijuana to obtain or parents to hand off thriving businesses via nepotism. “I’ve come in from the online adult industry, which has become a commodity driven market that even today exists in a grey area legally, meaning local, state, and federal ordinances and laws don’t always totally mesh and leave things open to interpretation insofar as whether or not you are obeying or not obeying the letter of the law from day to day,” said Mr. Farrell.

“I know it takes a special sort of mental fortitude to take that sort of risk, and I do feel that my experience navigating changing regulations and adapting to market forces in that industry have helped me substantially in this one,” he continued. ”I do put a lot of stock in the ‘life, liberty, and the pursuit of happiness’ part of the deal, so that inspires me because I think the cannabis business is vital to the country achieving those lofty aspirations on many levels, including environmental, healthful, and yes even spiritual well-being. You have to be careful, operate as legally and as ethically as possible, and hope for the best.”

Mr. Farrell seeks new ways to innovate by pushing the envelope with both marketing ideas and production plans, explaining, “Homegrown Oil is available medically in Washington and California, but living in Washington and watching as cannabis finally was legalized, I realized it was time to embrace and participate legally in the emerging recreational cannabis industry. At that point, many companies were already thriving and competition was already fierce. I admired what O-pen was doing in Colorado and thought that C02 concentrates would soon play a big part in the future of cannabis consumption, so we made that our focus from the start.

“Most of our competition has focused on the potency of THC without consideration for how the other components of their product affect flavor and feeling,” he added. “We want what people like about great buds to be what attracts them to Homegrown Oils.”

Studying the market, finding what works and trying to improve upon those techniques in their own proprietary way is a big part of what has pushed Homegrown forward so quickly. “I’m not a big fan of guessing what the public wants. For me to become fully engaged I have to see evidence that a demand already exists and I have to have the peace of mind that only comes from creating a product I believe is beneficial to my customers.”

Production of a quality product has been the easiest part of the Homegrown formula to bring to fruition, and to that end clearing away bureaucratic red tape to be able to then sell their product is where the majority of Homegrown’s intellectual resources has thus far been spent. “Right now, individual licensed collectives are making Homegrown Oil for the medical market and we hope to be in a licensing agreement for the Washington recreational market within the next month or two. We work with a collective in Washington, and another collective in California that produces in California for local medical dispensaries. The packaging and the process are essentially the same, but respect must be paid to state law, and, of course, there is no crossing of state lines at this time. The Feds could shut all this down so there is no reason to push the limits of their patience. What we try to do is keep quality consistent with the strains and the process. Fortunately, the lab results provided by the collectives are a testament to the standards we require from the licensees, and that really is paramount to developing a brand that people can trust; giving consumers exactly the same experience every time they purchase or consume any oils that our name is on.”

While Washington was the second state to adopt laws allowing recreational use of marijuana, there have been plenty of detractors complaining about the process that was put in place for the new cannabis business community. “A lot of people are pissed about the inefficiencies and missteps made in Washington; from zoning, to potency limitations, canopy acreage, what to do with existing medical access points, pretty much everything has been a rocky road and a convoluted mess – but I always say we should cut the bureaucrats a break! Their job is tough enough and they are pretty much trying to do their best in very difficult circumstances – potentially being held liable for a federal crime, for example. They will make mistakes, but at least they are setting precedents and paving the way for the rest of the country to follow while avoiding similar pitfalls.”

That said, Mr. Farrell has a few quibbles with Washington State’s process. “I do think one important things that the state could do a better job is in the area of converting from medical to recreational licenses – they should’ve followed Colorado’s lead there,’ he said. “Other major issues are the canopy limitations, which I know were set with the help of an expensive consulting firm, but I don’t think they really figured how strongly concentrates would factor in, as well as what average consumption rates would look like when people could consume marijuana oils legally. These are all things that will eventually get worked out, but time is of the essence and getting these regulations fixed sooner rather than later will make a big difference in the long-term health of many companies in business right now.”

Part of the problem is the way in which the industry is being portrayed by mainstream media, which continues to paint an overly glamorous image of the cannabis business in which every company is alleged to be a massive overnight success. In reality, there are plenty of businesses seeking to stay afloat while regulatory complexities are refined. “I hope that within the next few years Washington will realize that the tax rate is too burdensome for many companies to succeed, and will scale back the rate to allow the market to grow. I know of companies already going out of business or just dropping their license bids because they can’t make the numbers work. I would like to see the industry grow with a variety of producers, and not just end up being represented by some huge soul-less conglomerate. The main thing new companies should focus on after they jump through all the legal hoops to get started is how to survive as a company on almost no margins. The tax rates are too high, and when compounded by the federal government not allowing any deductions against expenses — banking and taxes are the biggest problems new companies face.”

Within the concentrates market in particularly, there have been rumors of an increase in regulation to prevent “hyper-potent” forms of marijuana from reaching the market, but that kind of regulation seems prudent from the Homegrown perspective. “We of course have to keep a close eye on the regulation of concentrates,” Farrell explained. “The product goal is not to be ‘weed crack’ and sacrifice everything at the expense of creating the kind of super potent oils officials are worried about. We intentionally stay close to flower and try to preserve the other healthful properties of the plant like the terpenes and important characteristics of the experience like the natural flavor.”

When asked to take out his green crystal ball to predict what may soon happen in the burgeoning industry, Farrell seems surprisingly confident in what he sees beyond the current horizon. “I believe as each state realizes that legalizing marijuana has not resulted in the immediate collapse of Western Civilization, and that more will come around to the idea of personal freedoms trumping completely unfounded fears. I’d give it about three years for every state to have some type of legalization and access to cannabis. I also believe the federal government is going to have to reschedule the substance legally and that banks will need to be specifically allowed to process funds for this industry the way the CARERS bill being considered by the U.S. Senate, which would allow states to move forward on medical marijuana without federal interference, presently prescribes. At the end of the day, the government needs banks to help control the industry. However, I know from my time in the adult industry that the ‘grey’ area between state and federal laws allows the latter greater latitude in coming down on the industry when and where they so choose, via selective enforcement and many other unspoken tools too often used at their sole discretion.”

Others have suggested outlandish ways to alleviate some of the legal obstacles for cannabis companies, but that all appears to be a distant hope at best for those already in the know.

“I’m a realist,” concludes Farrell. “For now, voters in Colorado, Washington, Alaska, Oregon and DC have legalized cannabis recreationally, but at the federal level there is still a great deal of resistance to bringing in cannabis – and there really aren’t any workarounds to that problem which won’t involve paying hordes of attorneys a whole lot of money to find solutions.”

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