Copperstate Farms CEO Explains Why Being A SSO In Cannabis Is A Strategy That Works
This special presentation from Copperstate Farms comes from Benzinga’s Virtual Cannabis Capital Conference that took place on October 15. Click here for more coverage of this event with presentations from some of the top CEOs, investors and lenders in the cannabis space.
In 1998, a young Canadian found himself a lottery winner. After collecting his jackpot, the man decided to use his winnings to create a hydroponic greenhouse in the best location in North America.
In his quest to find the ideal location, he worked with a few University professors who determined Snowflake, Arizona, to be one of the best places for a greenhouse.
Contrary to its name, the city of Snowflake is blessed with over 300 days of sunshine a year. It has an elevation of 5,000 ft. from sea level which makes the number of joules of sunlight it receives quite intense and ideal for growing and cultivating cannabis. As a result, the cannabis plants are powered by the sun for about 9-10 months of the year. The city also has an outstanding and clean source of water to draw from.
Following its formation, the greenhouse continued to grow and went through a couple of different owners. In 2016, the founders of Copperstate Farms Fife Symington and Scott Barker acquired the greenhouse from NatureSweet. Symington came into the acquisition with almost 20+ years of greenhouse experience. And as a large-scale agricultural expert, he brought that sensibility of how to do large agriculture to cannabis.
The Arizona Market
The Copperstate team has kept with the Arizona market — acknowledging its great potential. CEO of Copperstate Farms Pankaj Talwar joined the recent Benzinga Cannabis Capital Conference to talk a bit about the cannabis market in Arizona.
“Arizona is a fantastic market,” said Talwar. “Vertically integrated so each license provides access to not just a grow but processing and a dispensary. Secondly, it’s a limited license market.”
Proposition 207 passed this November 3rd election, allowing recreational marijuana use and cultivation by adults 21 or older. Talwar explained “Voter approval of Proposition 207 confers a lot of benefits to the community by freeing up the police to focus on dangerous and violent crimes; imposes an excise tax of 16% on adult-use marijuana products that will help fund community colleges, expanded public health services, and investments in Arizona’s infrastructure; and expunges past convictions for quantities that are made legal by this initiative.
Furthermore, the amendment continues the limited license, vertical integration model keeping the initial 130 licenses and adding an additional 26 new marijuana dispensary licenses for the social equity program.”
Symington commented, “Proposition 207 is a key step in the consummation of the vision and aspiration we had when we founded Copperstate Farms back in 2016. We are thrilled to see the voters pass this law, and we are confident of the benefits it will bestow upon the state of Arizona.”
Staying In Arizona
A major milestone for many cannabis companies is to become an MSO (multi-state operator). But for Copperstate Farms, their leadership team sees an even greater advantage by continuing to focus on a single state.
“We believe that some of our colleagues and competitors who are MSOs have struggled to try to manage a fully vertical operation in several locations. To get the right cultivation, to get the right people and leaders in each and every state they’re in — that’s a tall order,” said Talwar. “In my experience, it takes time to create the right leadership and people to support that. And if you have to build that individually in each state, I have experienced the loss in organizational continuity and connectivity if my leadership team is flying to multiple states to build up an entire vertical structure in those locations.”
Copperstate Farms believes that Arizona is an incredible market, full of opportunities and that focusing all of their energies on the state will be well rewarded. Symington stated, “As a medical marijuana market, Arizona was approaching $900 million in annuals sales. Now that Proposition 207 has passed, we believe the market will double in size over the next two years. As operators of the largest cannabis greenhouse in the United States, we have a lot of work to do right here in Arizona as we seek to provide high-quality cannabis at an affordable price.”
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