Raw Garden Plans Expansion To Arizona-Q&A With CEO John De Friel

Raw Garden Plans Expansion To Arizona-Q&A With CEO John De Friel

Sitting prominently among the best-known cannabis brands operating in California today is Raw Garden. You can find its line of concentrates—vape pens, sauces, live resin, diamonds— in nearly every licensed retail store in the state. Founded in 2011, during the medical Prop 215 days, the company has kept its operations close to the chest. Until now.

Based on the Central Coast, Raw Garden boasts over 2,000 cultivars grown on 85 acres of land in the lush Santa Barbara County. If you ask its CEO and co-founder John De Friel, Raw Garden’s ideology is farm-first. De Friel is a fourth-generation farmer as well as a chemical and biological engineer. Its meticulous, sprawling home base somehow feels more like a family-owned operation than a cannabis concentrate behemoth. It balances both realities, proving how cannabis brands can be a well-oiled agricultural machine that stays “small,” that is to say, humbled by its roots in the medical community and the need for accessibility.

Similar to De Friel, co-founder and COO Thomas Martin hails from a long line of farmers. This agricultural ideology has shaped every facet of Raw Garden’s parent company, Central Coast Agriculture Inc. The brand gives back to its local community by partnering with the Food Bank of Santa Barbara County. In 2020, they fed 1,300 kids at risk of hunger.

Raw Garden has reached mad-scientist level alchemy in its genetics, with over 15,000 distinct crosses from hundreds of unique parent lines. Its cannabis breeding program has had the biggest impact. Raw Garden has brought 827 unique cannabis strains to the consumer, including 300 new strains in 2020 alone. Award winners include Dosi Punch, Italian Soda, Banana Punch, Strawberry Mojito, and more. Today, its bank consists of over 25 million seeds.

De Friel spoke with me recently on Raw Garden’s obsession with consistency in plant breeding, his family’s 150-year farming roots, and the company’s announcement of its first expansion into a new market, Arizona, come next year.

Tell me about your Farm Philosophy. I would love to know how your knowledge of agriculture extends to and informs Raw Garden’s cannabis?

John De Friel: My mom’s side of the family has been farmers on the West Coast for over 150 years. They were homesteaders in the Oregon territory, in Washington state. My family started as homesteaders, became cattle and wheat farmers, more recently, they’ve done potatoes, onions, lettuce, celery, berries, all kinds of other produce. Being a farming family—my family is spread out all over California, Oregon, Washington—at some point, I’ve grown pretty much every crop.

So yeah, I’ve had that family network to study and ask questions and try to understand the evolution of those crops over all those years, how marketing has changed with them, how commodification has changed with them. We use a lot of that knowledge around building Raw Garden. That’s really where Raw Garden came from. Many people in my family told us: ‘If you want to resist being overly commodified, you need to be a branded company, not just an agricultural producer.’

What is Clean Green Certified, what does it mean to the consumer?

Clean Green is the first certification process created in California with the intent of creating a hybrid system— a sustainable agricultural product, as well as organic certification. It was created in 2007. Cannabis being federally illegal, the word ‘organic’ is technically a federally regulated word. We can’t just throw the word organic around.

So you’ve got things like the Washington Organic, California Organic, USDA Organic. These are all legally defined standards. Being federally illegal, we’ve been able to get that equivalent standardization. So Clean Green was the first system that ran on the same standards as USDA. My business partner, Thomas [Martin], was one of the very first people to sign onto that in the 2007 to 2008 timeframe.

What that says to the consumer is, we have opened up our operation to a third-party to verify the sources and the sustainable approached we use in our production. To be an open book. And have that third party sign off and say yes, these guys use sustainable, organic practices. My partners expanded Clean Green from just cultivation to manufactured goods. All of the protection levels for analyzing the quality control testing, we have to be in the 1/20th percentile, the actual cut off for a passing product. It’s 20 times more stringent.

Looking at 2020: how were sales, how did you see demand shift or grow with the historic designation of cannabis as “essential”?

It was definitely a blessing to be labeled an essential business. When the shutdowns first started happening, we were preparing for the worst-case scenario, to fully shut down. Very quickly, Governor Gavin Newsom said cannabis was an essential business. It was a huge relief to us, we were able to keep everyone on.

In the early stages of COVID, we went through a spike in sales. Then it dropped down to more normal levels. What we’re seeing now is the more current macroeconomic trend. With the lack of stimulus and continued shut down, we’re seeing data that suggests there are regional pockets of the state that are more severely impacted. Areas with tourism-oriented jobs, or nonessential jobs. It’s important to look into what falls into that nonessential jobs category. It was tourism, hospitality, the restaurant sector, that have been hit the hardest. In the places where those jobs are concentrated, we are seeing anecdotally, smaller basket sizes. People have much less disposable income.

We are now entering a new area without a stimulus. There are very clearly two separate recoveries going on in the economy. The k-shaped recovery, it’s a total split. For some people, it’s good, for other people, it’s very bad. Macroeconomically, it’s very concerning what we’re seeing going on right now. It’s beyond what any industry would be able to predict.

This year, you’ve launched new products, including your disposable vape pen, as well as diamonds. How has the consumer response been so far?

It’s been really good with both products. Diamond is a difficult product to make, it takes a lot of time, so it’s a low-volume product, it requires a temperature-controlled environment. It’s been difficult for us to increase the volume on that product, but it’s been very well-received. We take a lot of pride in this product.

The ready-to-use vape pens, so our goal is to compete against the disposable segment. We have wanted to enter that segment for a long time. We had a lot of internal dialogue on how to do that as high-quality as possible. We felt like it didn’t align with the company ethos to sell disposable products. Disposable products were created so that, when the oil runs out, they throw the vape product in the landfill. We’ve seen people try recycling, we tried to figure out how we could run a program like that. So we wanted to create a product, the convenience of a disposable is that it’s ready to use right away. Go to the store, grab it, use it right away at their friends. The ready-to-use, the convenience of a disposable, but not having a landfill battery. So figuring out how to make a battery that is reusable. We will be launching replacement ready-to-use cartridges soon. It is ready to use, but you can recharge the battery, and buy a new cart to go with it.

I am blown away by your breeding program. How long does it take for your team to perfect a cultivar?

It takes about 5-7 years on average to perfect a cultivar. You’re trying to get it stable, it can even take up to 9 years. You’re trying to get on average 7 generations of crop to be the same every time. We call it an inbred line. It’s a very slow, methodical process. That was where my passion, my background as a chemical and biological engineer. I worked in biofuels and genetic engineering for many years. I realized I could apply that to breeding, so I got a PhD. That position of the business was really my passion. We’ve produced over 15,000 breeds, and we have over 25 million seeds in our seed bank.

This year, we ran 1,200 to 1,500 trials. When we really want to do a variety, you want to be able to see 150 to 300 individual plants for every cross. It’s all about probability. If you want to see a 1% likelihood of genetic combination, 1% is the most elite cultivar. At the minimum, with 150 to 300 seed plants, you might get to see a 1% likelihood of combination. If you did less than 100 plants, you wouldn’t be able to say what the 1% is. If we do that, over 1,200-1,500 trials, you all of a sudden need a lot of space. That’s what it comes down to, the ability to seed that many crosses, that’s really what it takes to be a plant breeder.

You have to make a lot of observations. From that, we have to go out and make observations on all these individual plants, millions of data points every year. Over a dozen people out in the field, we build a big mathematical model. Those models tell us what those 1% of individuals in the field are. We use those individuals for the future crop that perpetuates the lineage. You have to do that 7-9 generations to really stabilize it.

You have PhD and MSc scientists guiding your plant breeding programs. How meticulous is their process? 

It’s extraordinarily meticulous. Every individual plant gets 35 measurements. We grow something like 500,000 seedlings a year, each one of those seedlings gets 35 measurements. Distinct data points that go into our mathematical model. From that, we try to keep the best 1% of those lines to go forward. We’re in the process of identifying genetic markers that help accelerate the breeding process, also a multi-year process. You have to feed a lot of quality data but were making huge progress. It’s just like computer scientists, if you put bad data into a model, no matter how good of a model, you’re going to get bad output. 

Let’s talk about your cryogenic tunnel. Tell me, why does freezing the flower as soon as possible matter, what does it mean for the final product?

As we were developing our processes, we realized that the majority of concentrates were being produced from trim. Very little were being produced from flower. Trim has historically been dry, not very well taken care of, it was a by-product. We thought, if you really want to produce great concentrates, we need to produce it from the flower itself.

90% of terpenes evaporate with the water when the cannabis is drying. We looked at it from the agricultural standpoint, what is concentrates most similar to, what other product? Being on the Central Coast, we are friends with a lot of berry farmers. We were like, alright, blackberries, raspberries—concentrates are like making smoothies. If we take the flowers immediately out of the field without letting them dry, we can lock in all of the terpenes. If we save terpenes from evaporating, we can create a ten-fold more flavorful product. The first terpenes to evaporate are the lightest, most valuable. Once we freeze the plant, it has to stay frozen the entire time for terpene preservation. If we can keep it frozen, keep it cold, right away we can keep the most terpenes. This way, we don’t have to add in any derived terpenes to our product from a non-cannabis terpenes source. Our product is all cannabis, with zero additives.

Do you have a personal favorite strain? 

For me, I get the most pleasure out of building these processes. To see the diversity of the products that come out. It’s all about building processes that produce high quality, consistent product. That’s really the greatest excitement for me, seeing us achieve that. That we have consistency in quality batches over and over again. What it is, is less important to me than seeing the same quality output time and time again.

That’s why people like Raw Garden, it doesn’t really matter which strain you pick up, you know that you can trust you will get a quality product every time. Getting the customers to trust the product comes from that consistency.

Are there states or new markets Raw Garden wants to enter next?

Yes, we are in the process of getting into Arizona. It’ll be by the end of 2021 or early 2022.

This question is as ideological as you want it to be. I would love to know in your opinion, where is the cannabis industry in 5 years? What does it look like, here in California, but worldwide? 

We, as a business, are hopeful that we will see interstate commerce within the next five years. We just saw the House passed the MORE Act, which allows for interstate commerce. How it occurs is not defined. We will see a lot of legislation over the next few years. Everyone agrees that enforcing it hasn’t worked— the War on Drugs has failed. One of the big reasons we are pushing for legalization is to stop spending money on enforcing it. The application of the law is costly.

If you look at the Black Market, the Black Market is interstate commerce. The only way to normalize the industry to allow it to compete against the Black Market. At the end of the day, we need to have consumers be able to buy products in every state. The same product. It becomes a consumer rights issue. If we have product in North Dakota, it has to be produced for four times the cost, it’s really unfair to the North Dakota consumers. They should have the right to any legal product they want to buy. Our hope is that we see the true normalization of interstate commerce. One, because it helps the country, and two, it’s a consumer rights issue. So people can buy California cannabis from across the country.

Lindsey Bartlett, Forbes Contributor

Published: 2020-12-17 13:05:00

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