On April 18, 2019 Crop Infrastructure (CROP.C) announced that its 49% owned Humboldt County farm has received an order of 1,000 4 ft. tall cannabis plants.
Crop is focused on cannabis branding and real estate assets. The portfolio of projects includes
- 1 cultivation property in California
- 2 cultivation properties in Washington State
- A 1,000-acre cannabis farm in Nevada
- 2,115 acres of Hemp CBD farms
- Canna Drink, a cannabis-infused functional beverage line
- 16 cannabis brands.
Previously, smaller plants were delivered to the Humboldt farm.
The large starter plants are expected to have increased yields. Currently, the farm has five 2,000 square foot greenhouses totaling 10,000 square feet and 20,000 square feet of outdoor cultivation space.
In an effort the stop the area becoming a home for “Big Agriculture” – weed farms in all three Emerald Triangle counties – including Humboldt – have a square-footage cap.
“We don’t want to be known as a commodity-producing region,” Terra Carver Executive Director of the Humboldt County Growers Alliance told mjbizdaily, “That’s not our thing. Quality over commodity. That’s the word here.”
Humboldt County – 270 miles north of San Francisco – is no ordinary patch of soil.
In 1970s, the area was invaded by “back to the land” hippies who found the climate, quality of the soil and laid-back law enforcement, ideal for outdoor growing. For the next 25 years, the black-market economy boomed.
In Humboldt, onions, transmission oil-changes and art – were paid for by cash.
“The location of the farm was the one thing no one could mention; it was the biggest secret in the business,” one guerilla Humboldt grower told The Washington Post, “Our whole attitude toward the government has always been ‘Come and get me.’”
“A massive industry never before regulated is being tamed by laws and taxation,” confirmed The Washington Post in 2018, “Nowhere is this process upending a culture and economy more than Humboldt, where tens of thousands of people who have been breaking the law for years are being asked to hire accountants, tax lawyers and declare themselves to a government they have famously distrusted.”
In fact, only 1% of the estimated 69,000 outlaw growers in Humboldt received permits to farm marijuana.
So, Crop is one of the lucky ones.
Crop’s Emerald Triangle farm has received approval from the Humboldt County Planning Department for a 2019 expansion which includes a 30,000 sq. ft. “automated light dep greenhouse facility and additional vault space.”
“Light dep” is short for “Light deprivation” – a somewhat counter-intuitive growing technique that uses blackout material with controlled exposure to light and darkness to simulate seasonal changes.
“Automating light and darkness tricks the plants into flowering on command,” states Greenhouse Mega store, “reducing the time to reach maturity which allows year-round cultivation with multiple harvests.
The You Tube video below expounds on this concept:
According to the April 18 press release, Crop’s new facility is expected to cost “$499,000 in capex.”
Not half a million.
Not $498 Gs.
Crop’s accountants can also, apparently, “flower on command.”
The year-round cultivation Humboldt farm and is expected to yield 12,000 pounds per year.
According to Priceofweed.com – at the low end – California weed sells for $10 gram which extrapolates to about $50 million/year in product. As a wholesaler/distributer Crop’s take will be less than that. But more than nothing.
CROP’s Emerald Heights retail brand has submitted licensing fees for Phase ll of of Chula Vista’s cannabis retail application process.
Combined with CROP’s partial acquisition of a distributer and extraction facility, “the retail location will bring the company to being fully vertically integrated” – when and if it is licensed.
Crop is not a “Humboldt-pure-play”.
It’s a mutated octopus with extra arms.
On April 17, 2019 CROP announced that it has identified “multiple tenants for a roll out strategy to enter the Oklahoma Medical Cannabis market.”
Crops plans to set up 20 acres of cultivation estimated to yield 30,000 lbs of dried flower per year. CROP has agreed to fund up to $500,000 USD for the initial start-up capital for the cultivation and retail locations.
According to the Marijuana Business Factbook 2018, after 3-5 years, annual dispensary sales in Oklahoma could generate $250 million/year from medical cannabis.
BDS Analytics predicts that the California cannabis market will increase to $5.1 Billion in 2019 as more dispensaries come online. By 2026, analysts at Cowen & Co. believe California’s weed market will be about $25 billion.
You can track Crop’s growing tentacles in previous Equity Guru articles.
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“We are preparing to scale up our operations with the Humboldt facility,” stated CROP CEO, Michael Yorke,” We will be particularly interested to see how these new, advanced plants perform.”
Full Disclosure: CROP is an Equity Guru marketing client and we own the stock.