When Mikey Steinmetz, the CEO of Flow Kana, tells his company’s origin story, one can feel his enthusiasm for cannabis, for the family farms of Northern California and for the wider world.
“I moved to California with my wife in 2013, and really the project was started by both of us,” Steinmetz says. “We spent a good year and a half just doing research, just trying to understand the industry.” And so he networked around San Francisco, went to conferences, met a lot of people and volunteered in a large East Bay dispensary. Eventually a broker there invited Steinmetz and his wife, Flavia Cassani, up to see the verdant crops and brown hills of the Emerald Triangle, the spectacular confluence of Humboldt, Mendocino and Trinity counties to the north.
It was there in the summer of 2014 that Steinmetz and Cassani had their road-to-Damascus moment. “Obviously, I had known about the Emerald Triangle my entire life,” Steinmetz says, “but I had never been up there and never knew about the amazing ecosystem that existed.” The couple started in Arcata and northern Humboldt, and worked their way south to Mendocino, visiting dozens of farms over three or four days. “It wasn’t until we went to Happy-Day Farms, run by Casey and Amber O’Neill, and it really opened my eyes to what this industry could be and the amazing new world that we could build through this industry.”
His epiphany came, as it often does, in the great outdoors. “I saw for the first time the cannabis plant in its rightful place,” Steinmetz says, “in the soil and underneath the sun, and for the very first time saw it next to cabbages and carrots and tomatoes and celery…”
Steinmetz’s fervor rises as he explains his big idea: “It was so inspiring, I can’t even begin to describe how it changed the trajectory in my life and really put the path of Flow Kana forward.” Seeing these very valuable green trees growing next to rows of sunflower seeds and strawberries inspired this insight. “The idea that cannabis could be a small-farm subsidy that could basically subsidize all kinds of vegetables that farmers could all grow collectively,” he explains.
Most of the costs of production, Steinmetz reckons, are incurred after the harvest. “Somewhere down the line I figured out how to centralize everything post-harvest,” the drying, curing, processing, packaging and distribution. The farmers are only on the hook for the costs of cultivation. Essentially what Flow Kana is doing is coordinating a very diverse set of independent, decentralized entities, and then centralizing the packaging and distribution end of the production line.
“We often compare ourselves to the car-share service Lyft,” Steinmetz explains. With 21st-century technology, that company “created an entirely new economy of powering decentralized independent drivers into a huge driver and brand network.” Unlike a drive-sharing app, however, which can ruin other independent workers, such as old-school cab drivers, the Flow Kana model seeks to protect and preserve the little guy, the farmer.
A better comparison would be with a certain orange empire. “Sunkist is the largest citrus brand in the world, but they don’t grow a single orange,” Steinmetz says, as he speaks of Sunkist’s “aggregation hubs” and centralized packing house and juicery, all coordinated to bring vitamin C to the world. How impressed is he with the orange giant’s work? Impressed enough that Flow Kana just hired Sunkist’s chief operations officer, John Striff, a 16-year veteran of building the vast supply chain of oranges, enlisted here to pull off the same feat with weed.
Flow Kana is the top-selling brand of cannabis in California, but its flowers are grown by others—100 or more small farms, all of them dedicated to sustainable practices, with roots throughout the tri-county Triangle. They have names like Elysian Fields, Flying High Farms and Sol Grow, boasting such attributes as “100% organic and peacefully solar powered” or “off-grid homestead…using sustainable and Earth conscious methods passed from father to daughter” or “cannabis agricultural cooperative built to keep the value of the plant within their community.”
When Flow Kana launched in 2015, it made a name for itself with herb-tasting events in and around San Francisco. The tastings often featured the farmers, who put a human face on the product and helped people think about where their medicine comes from.
We all know the outdoor-versus-indoor debate. At a time when THC and CBD are being generated from brewer’s yeast, the means of production, so to speak, in cannabis are changing rapidly. Flow Kana is all about preserving less radical, earth-friendly means of growing a consumable product, using deeply eco-conscious practices and a lot of sunshine. Cannasseurs swear by the Emerald Triangle flavors, saying a full terpene profile can only be truly coaxed out in the relatively long growing season of the region.
Since California went full legal, its evolving regulatory schemes have threatened smaller players, who might not have enough capital on hand to bear the brunt of unexpected costs-mandated childproof packaging, for example—and so there have been “massive extinction events,” as Steinmetz calls them, whereby the little guys, and not only farmers, are driven out.
The Emerald Triangle breeds a hearty people, however. Many are multigenerational farmers with a deep connection to the land, and many have suffered the slings and arrows of the prohibition years, subject to things like helicopter raids on their land or violent attacks from criminal elements. They are survivors.
While prohibition was so damaging, says Steinmetz, it did leave one valuable legacy: “an incredible ecosystem of small, fragmented farms,” an estimated 53,000 small cannabis farms statewide which, unlike other agricultural businesses, have remained small. “The larger you got, the more risk you had of getting caught, arrested. It naturally left the [farms] to be small and fragmented. The industry grew and grew, but the farms stayed small.”
While the small family farm is the heart and soul of the Flow Kana project, it should be remembered that the company itself is going large. In February, Flow Kana scored $125 million in financing from Gotham Green Partners, described by Forbes as “the largest private funding round of a cannabis company executed in the United States to date.”
Paradoxically, it is this ramping up of scale that can protect smaller players. The clearinghouse that consolidates the “fragmented” farms is the Flow Cannabis Institute, launched in April 2018, described this way on the company’s website:
“Just as a small coffee farmer grows beans all year round and takes them to a centralized facility to get dried, roasted, processed and packaged at scale…the 85,000-industrial-square-foot Flow Cannabis Institute provides a centralized location for independent cannabis farmers to test, dry, cure, trim, process, package, manufacture and distribute farm products cost effectively, and at massive scale.”
Put another way, this facility is an outlet for small-batch, craft-cannabis farmers who might not otherwise have the resources to bring their products to the world. The sun-kissed crops out of the Emerald Triangle are delicious, and the environmentally friendly ethos that produces them are planet-savers. The tender care that these farmers invest in their plants and land might be as close to sustainable agriculture as we’re going to get.
The Flow Cannabis Institute is billed as “the world’s first cannabis campus” (Oaksterdam University, among others, might take issue with that descriptor, but never mind). By consolidating the goods of many small farms, the farmers are endowed with the might of a Big Ag monster, but with none of the monstrousness.
A number of observers have noted that Flow Kana’s project to support the Triangle’s high-quality cannabis is akin to the kind of curation (and branding) that elevates wine regions of renown, such as Napa or Bordeaux. The comparisons are apt, to a point, not least of all because the Flow Cannabis Institute sits on property that once housed the Fetzer family winery (which, though relocated, also happens to champion sustainability). Flow Kana bought the property in early 2017, and Steinmetz and Cassani have made it their home.
While prohibition was, and in many places still is, a cruel joke, when it is finally lifted at the federal level, it should be a boon for companies like Flow Kana and could potentially even help the small farmer. When descheduling arrives, distributors will be able to launch interstate sales, and Steinmetz and the farmers who produce the goods will be well positioned for growth. “We’re setting ourselves up for that federal moment and national expansion,” the CEO says. “We’ll have the supply chain.”
And so, for those of us concerned that gigantic corporations will come to dominate the cannabis market, it is with some optimism to see the farmers of Northern California hanging in there, and with a real opportunity to thrive as the industry grows. “I think the momentum we have nationwide is a matter of when, not if,” Steinmetz says. “We are very bullish on the whole thing.” This is good for farmers—and for the world.
Originally published in the June, 2019 issue of High Times magazine. Subscribe right here.
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