Marijuana Business Magazine - Issue 09, Oct 2017

Last year, we saw 157% growth,” Knox said. Another West Coast company – one that specializes in soil – is Cali- fornia-based Sanctuary Soil. It has a sister company that supplies organic fertilizers, California-based Mission Fertilizer. Mitch Davis, an owner of both companies, said Sanctuary Soil delivers to “literally hundreds” of can- nabis growers in four western states, primarily California. “Five years ago, it was probably mostly in the three counties (of the Emerald Triangle): Mendocino, Trinity and Humboldt,” Davis said. “I would say that only represents half of the soil, or less now. ... I’d say year over year, in the last three years, we’ve probably doubled delivered soil loads.” And, Davis added, his company’s soil sales are in the “tens of millions.” Arizona-based Botanicare, founded in 1996, also has revenues in the tens of millions, Shoppach said. The company was doing so well it was acquired last October for $40 million by the Hawthorne Gardening Co., a subsidiary of Ohio-based Scotts Mir- acle-Gro. (Scotts has also purchased four other MJ-focused companies, including General Hydroponics and Gavita Horticultural Lighting.) “On paper, 100% of our revenue comes from our retail partners. Of their business, I would say about 95% of their business comes from canna- bis,” Shoppach said. More broadly, the nutrient business already has gone global. S.J. Enterprises, for instance, distributes its Cyco Platinum Series of nutrients in the United Kingdom, Spain and Canada aside from its home country of Australia and the United States. Advanced Nutrients has manufac- turing centers or warehouses spread out across the United States and Canada as well as Bulgaria, Germany and Spain. “We’re all over the world,” Strau- mietis said. BUSINESS HURDLES Scaling for Growth One of the easiest hurdles for each of these nutrient and soil companies to identify was simply keeping pace with demand, and the growing pains that accompany rapid expansion. “With all the growth and as big as we get and all of the improvements we make, every year it gets wiped away. Literally, it’s been nonstop try- ing to scale. Literally, nonstop,” said Sanctuary Soil’s Davis. That’s changed in recent years, Davis added, due to the increasing popularity of greenhouses, which has turned his formerly seasonal busi- ness into a year-round cycle. “If we look back three years ago, we would be in a slowdown time,” Davis said in August. “This would be a time for us to regroup and get set for next season. Well, it hasn’t slowed down. We’re still busy and we’re delivering to a lot of greenhouses that are just starting to function year-round.” Shoppach agreed that scaling appropriately is one of the biggest challenges Botanicare has had to confront. “When you’re seeing doubling of revenues in five years, your business has to prepare for that,” she said, referring to how much Botanicare’s sales surged in the past half a dec- ade. “Just ensuring a consistent sup- ply chain, ensuring that the product is reaching the consumer in a timely fashion — those are always chal- lenges for any business that’s grow- ing as fast as the cannabis sector.” Supply Chain One of the biggest issues for soil producers especially – it’s arguably less of a hurdle for fertilizer and nutri- ent companies – is keeping materials in stock to produce soil that’s specifi- cally tailored for marijuana. “We’re literally bringing in ingredi- ents that we don’t produce now for next season,” Davis said, noting the company must order materials such as coco coir from Asia, peat from Canada and multiple other components it uses to produce cannabis-friendly soil. “We’re talking 40-foot contain- ers, and we’ll bring in 150 of those oceangoing containers just of that one ingredient,” Davis said. Customer Education Another issue many nutrient and soil companies face is convincing potential clients of the value of their Above: Botanicare’s Growilla line of cannabis nutrients. Below: Botanicare’s Pure Blend Pro line of cannabis nutrients. Photos courtesy of Botanicare Some of the cannabis nutrient offerings from Oregon-based wholesale distributor Savant Plant Technologies. Photo courtesy of Savant Plant Technologies 108 • Marijuana Business Magazine • October 2017