Starting Up the Cannabis Economy
By Kate Jonuska
There was a time in the not so distant past when working with marijuana in any way was a criminal offense. But as far as the Colorado innovation community is concerned, the road to the future is now paved with cannabis. Legalization in 2012 created a wide-open market, and many entrepreneurs have wasted no time jumping in with big dreams and big business plans.
“Everything about the industry is so new, and there are a lot of opportunities,” says James Eichner, co-founder of cannabis startup Sana Packaging. “Because it’s so young, we can build the industry how we see fit. It’s not an industry that’s stuck in its ways.”
Rather, it’s an industry dedicated to breaking the stigma of cannabis businesses—and cannabis users—across the board.
“A lot of professionals who are outside-the-box thinkers are driving this innovation,” agrees Kevin Mayer, CEO of Croptimize. “It’s a real industry, it’s legitimate and there are lots of professionals on the business side as well as the growing side. For us, it’s an untapped area where technology can solve real problems.”
To provide a taste of the wide array of opportunity in cannabis, we rounded up six local start-ups and small businesses that embody the pioneering spirit of the cannapreneur.
Cutting-edge robotics for the cannabis industry
Robotics engineer Jon Gowa, founder and CEO of Bloom Automation, previously worked on robots for the agricultural and nursery industries. The first time he saw video of cannabis harvesters doing meticulous and exhausting trimming work by hand, he was shocked.
“I saw large groups of people working with just scissors,” he says, noting that cannabis cultivators haven’t harnessed the automation already at work in other agricultural sectors. “And it often costs a significant portion of a cultivator’s overhead to do this work. It can be $150 per pound to trim a plant manually. It made sense robots could possibly fit in.”
The challenge of automation is complex. “It’s precise work, because the flowers are delicate and the leaves are often embedded in or near the flowers,” Gowa says. “That’s why our robots use cameras to see and understand the plants and each one’s differences.”
While Bloom Automation is beginning its journey with harvesters, the goal is to help automate other steps of the cannabis-growing process as well, focusing on collaborative work with humans and robots together. “The idea is to have humans working right alongside robots,” says Gowa. “I see Bloom as two emerging industries meeting, and the timing couldn’t be better.”
Cannabis-focused media designed for women and minorities
Only in the 21st century could a group of friends hanging out, smoking pot and recording their conversations for a podcast become the basis of a budding multimedia conglomerate, but such is the story of Estrohaze co-founders Sirita Wright, Safon Floyd and Kali Wilder. Their hit podcast, which is heavy on information as well as pop culture, is sometimes described as “Essence meets Viceland.”
“We have a strain of the week and fun segments,” says Wright, “like one at the end of the podcast we call ‘Smoking on the Low,’ where we take on people we think might be closet cannabis smokers. I won’t say any names just now, but we think that there are a lot of people who do smoke, especially among those who publicly are adamantly against it.”
However, the podcast’s success only made clear to Estrohaze’s founders how rare it was for women of color to be part of the cannabis conversation. Says Wright, “Even though we were part of that space, we weren’t seeing people who looked like us being featured in that space.”
And so the friends decided to become the face of that change by expanding Estrohaze from the podcasting realm into a one-stop shop for minority women—and minorities in general—looking to enter the cannabis world, either for employment, health or recreation.
“If someone is looking for heath and wellness content, they can find out about different strains for different ailments, or how they could cook with cannabis or consume cannabis for health and well-being,” says Floyd. “The dream is to one day be a multimedia conglomerate. We want to host events, have a podcast network, and have vast educational resources and networking opportunities.”
Helping indoor farmers reduce energy dependence and operational costs
Croptimize CEO Kevin Mayer and Energy Services Principal Rich Barone, both longtime Boulder residents, have watched the growth of the cannabis industry from its inception. As technology and energy professionals, they have long been interested in the industry’s energy footprint, and the numbers aren’t pretty.
“Legal cannabis growers this year are going to consume 2 percent of the energy here in Colorado,” says Mayer, who notes that a single high-pressure sodium grow light consumes as much power as four refrigerators. “This is only going to become a bigger problem as the industry starts to scale. It’s going to leave an ecological footprint that leaves a bad taste in people’s mouths, and it doesn’t have to be that way.”
Croptimize’s goal is to help cultivators more efficiently use energy, first by gathering information using Internet connected technology and proprietary software—for which they brought on CTO Jeff Scelza. Next, they strive to connect the cannabis industry with utility incentives and rebates, and efficient energy technologies, such as monitoring equipment and on-site battery storage.
“The energy profiles of modern-day cannabis cultivation are not reflective of what could and should be done, and what is done in other industries,” says Mayer. “Our goal to facilitate that on an economic level and also a feel-good level.”
Real-life data to guide trailblazers in the cannabis market
Whether you’re running a business or deciding where to invest your money, you want to base your decisions on trusted and standardized data, which in the infant cannabis industry can be hard to find. Enter New Frontier, which offers clients business information and legal insight.
“I think of New Frontier as the connective tissue on the skeleton of the cannabis industry, which helps it grow through business intelligence,” says Sam Osbourne, New Frontier’s vice president of product and head of the Denver office. “Every business in one way or another needs business intelligence, and as this industry matures, a greater number of industry participants will grasp that.”
Stressing transparency and impartiality— it takes no stand on legalization
New Frontier has a diverse client base that includes cannabis operators (businesses as varied as grow operations, dispensaries, testing facilities and accessories manufacturers) as well as investors, politicians seeking to research cannabis topics, and any traditional company looking to work with a cannabis partner, such as a vendor of fertilizer or software.
From an investing perspective, cannabis can be a promising and untapped market, but choosing how to engage with that investment can be complicated.
“Should I invest in a vertically integrated dispensary in Arizona, an edibles manufacturer in Washington or a cultivation greenhouse in California? How do I compare and contrast these opportunities?” asks Osbourne. “Ultimately the only way to do that is through some form of objective data. We want to be that strategic thought advisor a lot of people and companies are looking for.”
Sustainable packaging solutions for the cannabis industry
Packaging waste is a huge, cross-industry problem. But two young University of Colorado students—Sana Packaging co-founders Ronjit Basak-Smith and James Eichner will graduate this year—think they have the beginning of a solution in the form of efficient and practical hemp-based products.
“Sustainability is really catching on in the cannabis industry, but we didn’t see anyone doing it on the packaging side of things,” says Eichner. Sana’s flagship product, a stackable, rectangular cannabis flower container, is made from hemp-based cardboard and hemp-based plastics. “Industrial hemp is also becoming more and more prevalent in the U.S., so Sana is sort of a trifecta between the current cannabis, hemp and sustainability movements.”
This solution hits three industry pain points: wasteful packaging, in-house storage, and branding and labeling.
“In terms of storage, cannabis is currently a real-estate game, and great dispensaries in great locations are short on space,” Eichner says. “Our stackable packaging can take up 50 percent of the space cylindrical containers take up. And as far as labeling, we think with the cylindrical shape currently popular, there is room for labeling but it’s not all that attractive.”
“We’re both big on sustainability and are studying that in school. This [venture] checks one box of something we feel strongly about, and the entrepreneurial side is something we love, too,” says Basak-Smith. “Eventually we’re really trying to tackle packaging throughout the cannabis industry, whether flower or concentrates or edibles, but it’s not just an issue for them. Packaging in most industries is incredibly wasteful.”
Irie Weddings and Events
Cannabis wedding and event planning
The vast majority of wedding festivities include at least a little bit of alcohol, whether Champagne toast or full bar. Co-owners Madelyne Kelly and Bec Koop hope Irie Weddings and Events can make some space for legal, recreational cannabis at the party.
“At almost every wedding most of us have been to, admit it, somebody was getting high in the car. Now we can let them join the party next to the guy smoking a cigar or the girl with her wine,” says Koop. She worked in “traditional wedding land” for years before opening Irie, whose most popular package is the bud bar, which can be an à la carte service or part of a package. Much as a bartender provides signature drinks and fancy glasses, Irie can bring preselected strains, tools for consuming the cannabis and a live budtender with specialty knowledge so guests can craft their own experience.
“We know exactly what strains we’re providing so we can achieve the desired effects and atmosphere,” Koop says. “You could have a strain that makes you giggly so people can go dance, or one that creates more munchies so we know to bring out another round of dessert at 11 p.m.”
Irie wedding-planning packages include liaising with cannabis-friendly venues and vendors. The company’s elopement packages (starting at $420) have been growing in popularity, and some guests choose to be more discreet by including cannabis only in the floral arrangements or as wedding-party gifts.
The demand is there. “Every year since we’ve been open, we’ve doubled in number of weddings and events, and 2018 is already looking huge,” says Koop. “People are booking that far out, which kind of blows the whole idea of stoners being lazy.”
Kate Jonuska is a freelance writer of fiction, features and food. Her first novel, Transference, releases this summer in digital and print.