Farmer Tom Calls For A Safer Cannabis Workplace

WASHINGTON: Tom Lauerman, universally known as “Farmer Tom,” is a well-known and beloved figure in Washington’s cannabis community.  Attend any cannabis event in the Evergreen State – from farmer’s market to the steps of the Statehouse in Olympia – and you are likely to see Farmer Tom – long flowing Santa beard and floppy hippie hat – front and center representing the cause.

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The Feds Visit A Cannabis Farm

These days, when he’s not working with his business partners on an upcoming line of “organic” soils and nutrients, Farmer Tom can be heard espousing the benefits of establishing best practices and standards for the cannabis  industry – advocating for everything from safer pest management and testing practices to the rights of his fellow workers in weed.

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Farmer Tom is a pioneer in working with the Federal Government to create workplace safety standards for the cannabis industry. Last fall, he and his wife Paul invited the National Institute for Occupational Safety and Health (NIOSH) to visit his medical marijuana farm in Vancouver, WA.  The feds spent several days on the farm reviewing for the first time the working conditions on a real cannabis farm.  The visit garnered quite a bit of attention for the media-friendly Farmer Tom, including a feature in this month’s DOPE Magazine.

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I Don’t Make Snake Oil

Workplace safety “runs in the family” for Farmer Tom. “My Grandfather was head of HR at both Republic Steel and Covair and was on the first national safety commission,” Lauerman told MJ News Network.  “I handled OSHA paperwork and meetings while in the corporate world and worked with the Union drafting a workplace health and safety manual.”

As part of his mission to raise awareness of safety issues among leaders of the legal cannabis industry, Farmer Tom will be a featured presenter at a “Cannabis Industry Safety Night” panel discussion on May 26th, an event sponsored by the MJBA Portland, and CannaGuard Security.   Joining Tom will be environmental, health & safety expert Sally Koch, Indy Safety; Paul Equall, Life Safety Corp; and Mike Sotelo, CEO of Consolidar Networks.

Federal agents studied cannabis workplace safety at Farmer Tom's

Tools of the Trade

Farmer Tom has plans to publish a cannabis workplace health and safety manual soon. “I’m working with a few groups developing workplace health and safety standards,” he explained, “and have been approached by Washington state university on doing continued research in the Cannabis world.”

Stay tuned here.

 

 

 

The 2015 MJBA/Front Runner Washington Marijuana Producer/Processor Report

By Brian Yauger
Front Runner

WASHINGTON: During its first 15 months of legalization, we have seen sales of recreational marijuana in Washington State grow at an astounding rate of 13% a month. The number of recreational customers has topped 50,000 a day, fueled by a steady drop in retail prices.

The number of both new retail shops and new producers and processors licensees grows weekly. And it is notable that unlike other industries, Washington’s recreational marijuana marketplace is “upside down” in comparison of brands to retail outlets, a situation that has contributed to an overall commoditization of recreational marijuana bud.

The number of licensees increases weekly

The number of licensees increases weekly

There are currently 325 recreational marijuana producer/processors in Washington, most with at least one brand, and many who are marketing under several different bands. By comparison, there are just over active 150 retail stores to accommodate these brands, making the establishment of a brand name more challenging. With such an imbalance of processors to retailers, getting shelf space has become highly competitive and has allowed retailers to set the wholesale price points.

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An abundance of product supply has contributed to steadily lower price points that lead us to the question: has recreational marijuana become a commodity?

Let us first define terms. Webster’s dictionary defines commodity as

  • An economic good such as:

o   A product of agriculture or mining

o   An article of commerce especially when delivered for shipment

o   A mass produced unspecialized product

  • Something useful or valued
  • A good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (as brand name) other than price

Screenshot 2015-11-27 12.59.36Clearly cannabis is a product of agriculture, and an article of commerce that is currently being mass-produced. Many, especially producer/processors, would not agree that recreational marijuana is an unspecialized product.

Medical cannabis users will agree that mmj is something useful, and all consumers agree that it is valued. In the current marketplace marijuana is abundantly available and the large and growing supply is contributing to increasingly smaller wholesale profit margins. So, with the exception of it possibly being a specialized product, marijuana certainly looks a lot like a commodity.

But what about brand? Does the small profit margin diminish the importance of factors like the brand name?

The importance of brand is the deciding factor as to whether we can call marijuana a commodity or not. Can a processor grow a product that is so good that it can be considered a specialty product? A specialty product is defined as a product that certain consumers will actively seek to purchase of unique characteristics or loyalty to a specific band. Consumers who seek specialty products know what they want and will spend time and effort to get it. They typically will not easily accept substitute products. For example, a particular brand of single malt scotch may be a bit more expensive than other scotches on the shelf. Price is usually not an important factor for loyal consumers who demand specific product brands that match their personal preferences.

So if producers can grow specialty marijuana product of marijuana and establish a meaningful brand, then we can’t call marijuana a true commodity. So has any producer been able to establish a brand name yet? To find out we must look at several different factors.

Recreational marijuana is broken up into four basic groups: flower or bud; edibles; concentrates, including oils and waxes; and topicals. Topicals are just starting to hit the Washington market and are only around a $100,000 in monthly sales statewide.

By definition, since edibles and concentrates are not simple agriculture or mined, do not fit the definition of commodity. The edible companies are also the first companies that have started to build recognizable brands.

In order to look at what brands are recognizable to a majority of recreational users we must first look at what brands are in the most retailers. There are only four processors that were in over half of all the retailers in the state. The top three were all edible companies, Zoots (DB3), Northwest Cannabis Solution, and Spot (Botanical Seattle). BMF Washington holds the fourth spot with 80 retailers selling BMF Washington product. While BMF Washington does sell flower under the name Liberty Reach, they also manufacture the popular oil pens JuJu Joints. In addition, eight of the top eleven processors that are carried by the most retailers are either edible or primarily concentrate brands.

Screenshot 2015-11-27 12.59.44Sixty percent of all bud sold at the retail level in the state is sold in only four counties, King, Clark, Snohomish, and Spokane counties. Spokane County is the only county east of the Cascade Mountains and accounts for 14% of all sales in the state. However, 86% of all flower sold in Spokane County is processed east of the Cascade Mountains. In contrast King, Pierce, and Snohomish County account for 46%. However only 65% of the flower sold west of the cascades is processed west of the Cascade Mountains. Price is a driving factor in the separation of the states product.

The reason for this homogeneous selling pattern is simple: price. With the imbalance of retailers to processors, the retailers are setting the price for flower. King and Snohomish county retailers on average purchase bud on a wholesale level at just over $4 a gram. While Spokane County retailers only pay in the mid to low $3 a gram. This makes it cost beneficial for Eastern Washington processors that have enough product to travel to western Washington to sell for higher wholesale prices. But it is cost prohibitive for western Washington processors to travel east when they can sell their entire product west of the mountains for higher amounts with less travel costs.

As we approach the end of 2015 recreational marijuana is currently being sold as a commodity. However, it may not always stay that way. By July 1st of 2016 all medical marijuana will have to be rolled into the I-502 system. This will grow our current amount of retailers from the mid 100’s to over 400 retail shops within the next year. The WSLCB has also started to raise the canopy for the amount of product to be grown. Producers and processors may now grow 100% of square footage allowed by their tier; this is up from 70% that they were limited to. This will allow processors to grow more products and try to get it into more retail locations. It will be interesting to revisit this subject in November of 2016 and see how the market has changed. But for now, for better or worse, marijuana flower is a commodity.