Marijuana Growers Focus on Branding to Fetch Premium Prices for What They Say is Premium Product
Sara Batterby looks forward to the day her marijuana is treated like produce in a Portland grocery store - where cage-free eggs are a dollar more than plain eggs and organic tomatoes from the Willamette Valley are a cut above ones from California.
Batterby is chief executive of HiFi Farms in Portland, which grows pot indoors using organic techniques. But her specialty crop doesn't fetch a higher price the way organic food would.
"You can have someone growing very average product, covering it with pesticides and chemicals, and their product is valued in the current market the same way my product is valued - which is 100 percent organic, clean, sustainable," said Batterby, who is also president of the Portland chapter of Women Grow, which promotes what it calls cannabis entrepreneurs.
Batterby is looking forward to October 1, when legal recreational marijuana sales start in Oregon, because she expects the pricing system to change. Like many other growers across the state, in fact, she's counting on it.
"With the emergence of brands that are willing to invest in educating consumers about very high-grade organic, clean cannabis and the alternatives, I think you'll see premiums," Batterby said.
In the illegal marijuana market, it's always been hard for growers to differentiate their product. There is no mark-up for growing pot to organic guidelines, or for brand recognition. No labeling laws to make it clear what kind of pot buyers are getting.
The extent to which those things will matter in Oregon's legal market remains to be seen.
In Colorado, the first state to legalize marijuana, pot is still treated more or less like it was on the black market. Baggies come in different sizes and prices. Take it or leave it.
But in Washington, the second state to go legal, marijuana is marketed and sold by brand - so retail stores look more like a brewpub with 30 taps than a bulk bin at the supermarket.
For Jeremy Moberg, an outdoor grower in Northern Washington, building a brand for his marijuana is a long-term vision. Even if it means, as it did last year, that he has to take a hit in the short term.
Many Washington growers suffered from depressed prices when the 2014 marijuana harvest came in at the end of the summer - the first legal crop to be sold in the state. Too many growers offloaded their crop all at once, and it flooded retail stores. Prices plummeted.
Moberg weathered the storm, but admits he had several months of poor revenue. He held back much of his supply and sold small portions of it throughout the year and focused on messaging.
Growing his Cannasol brand's reputation will be worth it over time, he said.
Moberg wants Cannasol marijuana to appeal to the grass-fed beef and organic tomato crowd. Grown in the sun, fed from the land -- the kind of image that could be embraced by Pacific Northwest buyers, but only if growers invest in the right packaging and outreach.
"If you're not differentiating your brand through your practices and you're not conveying that to the consumer, I don't think you're going to do that well," Moberg said.
Especially because growers are coming out of the black market into a burgeoning new industry with the taxes and regulations to go along with it.
"We sell at such a low price that we barely cover all our costs, because our costs are so high to meet all those regulations," Moberg said.
The Oregon Sungrown Growers Guild, a lobbying group in southern Oregon, has even branded itself. Members' outdoor-grown marijuana is "sungrown," a word they hope casts a shadow over the warehouse-and-grow-light operations of indoor growers.
Richard Reames, an outdoor grower in the Josephine County town of Williams, is part of the group, and has been urging his fellow farmers to start honing their brands now. It's an idea they are unaccustomed to, even though 80 percent of Oregon's marijuana is grown outdoors, according to an EcoNorthwest study.
At the moment, they are hobbled by the fact that they can only sell the pot they have left over after fulfilling medical marijuana orders. The state doesn't yet have recreational-growing permits available, so "excess" is the only recreational marijuana product allowed to be sold this year.
But it's only a matter of time. When those permits are eventually doled out, growers who have a good reputation will have a leg up.
"We believe it's superior for many reasons," Reames said of his group's sungrown pot.
Then the 57-year-old farmer laughs. "I'm branding!"
-- Molly Harbarger