Williamstown Cannabis Cultivation Business PlanDavis Collison and Rosa Kirk-Davidoff

We are on the stolen land of the Stockbridge-Munsee Band of the Mohican.

“The legal marijuana industry has the potential to save local farms and repair a broken food system.”- Suehiko Ono, EOS Farms

Introduction

● Who we are● Environmental Planning

○ Senior Seminar for Environmental Studies Majors

● This project - Williamstown Cannabis Cultivation

● Questions: Best scale to start? Opportunities for a craft market?

Averill Cook Davis and Rosa

Jake Zieminski

Our Clients

● Averill H Cook○ Born and raised in Williamstown.○ BS degree from University of Vermont○ Owned and operated a pellet manufacturing business for

12 years○ Traveled throughout numerous countries consulting in

wood energy○ Maintained an operated Wendling Farm in Williamstown

where he grew up○ Superior land stewardship has been paramount

throughout his career

Averill Cook Jake Zieminski

Our Clients ● Jake Zieminski

○ Born and raised in Cheshire Ma on family dairy farm. Lived in Boston for 20 years and recently moved family back in 2018 to launch cannabis start-up.

○ Cannabis Entrepreneur■ Current owner of CAVU Hemp, Cheshire Ma- MDAR licensed 2019■ 2021- CCC – Marijuana Cultivation Applicant■ Cannabis Activist, Educator and Advisor since 2014

○ Prior to transitioning into Cannabis industry in 2018, Mr. Zieminski was a management consultant focused in healthcare. Mr. Zieminski has spent the primary part of his career in client based performance improvement roles at PricewaterhouseCoopers(PwC), FTI Consulting and a Boston based addiction clinic start-up.

○ Education:■ Providence College■ BS Management and Finance■ Liberal Arts ConcentrationAverill Cook Jake Zieminski

Methodology

● Client meetings● Site visits

○ Wendling Farm● Soil tests● Interviews ● Online Research

○ Case studies ● CCC regulatory research

Interviews● Cultivators

○ Ted Dobson■ Equinox Farm, Theory Wellness

○ John Moore ■ Roaring Glen Farms

● Retail○ Donna Norman

■ Calyx Berkshire Dispensary ● Other Experts

○ Sam Milton■ Climate Resources Group

○ Marion Mcnabb ■ President of Cannabis Center of Excellence, INC

○ Tony Kieffer■ Arch Solar Zoom Interview with Dr. Marion Mcnabb

Ted Dobson https://www.berkshireeagle.com/archives/inside-equinox-farms-first-cannabis-harvest/article_80261c50-e6c0-5a4b-87ec-828abffaf0bd.html

Intro to Cannabis Cultivation

https://www.visualcapitalist.com/anatomy-cannabis-plant/

https://www.instagram.com/theorywellness/

Types of Licenses

● Tier 1 (1,000-5,000 ft2)-Tier 11 (90,000-100,000 ft2)○ Indoor Cultivation○ Outdoor Cultivation

● Greenhouses ● Microbusiness: Tier 1 cultivation and/or product manufacturer● Craft Marijuana Cooperative

Cannabis Control Commission

Business Plan

Executive Summary

Mission:

Provide a sustainable and high-quality but

affordable product through the outdoor

cultivation of cannabis.

Year 1: Tier 6 (50,000 sq ft) outdoor grow, Tier 1(5,000 sq ft) indoor

greenhouse

Year 2: Continue with a Tier 6, reinvest in facilities to enable

expansion

Year 3: Expand to Tier 11 (100,000 sq ft) outdoor grow, prepare

application for product manufacturing and retail licenses

Year 4: Tier 11 grow, continue application process and build capacity

for manufacturing and retail

Year 5: Tier 11 grow, begin manufacturing and retail operations

Startup Summary

Fence & security $200,000

Greenhouse $600,000

Labor $250,000

Plant-related expenses $150,000

Legal & licensing $200,000

Equipment $400,000

(Land) $500,000

Sales & marketing $100,000

Total $2,550,000

Financial Summary

Market Overview: US Cannabis Market

● Increased legalization by states

● Possibility of federal legalization

● 280e Schedule 1 Drug● National average price:

$1,846 as of Nov. 27● Regional price variation

https://www.nbcnews.com/news/us-news/map-see-if-marijuana-legal-your-state-n938426

Target Market: Massachusetts

● Average wholesale price for average-quality indoor marijuana: $3,800/ lb as of March 2020

● More than 2x national average● Demand > supply

○ 90 licensed retailers○ 40 licensed cultivators○ Only 4 licensed outdoor cultivators

● Complicated regulatory process● 10.75% excise tax, 6.25% sales tax

SWOT Analysis

Massachusetts Regulatory Framework

Williamstown Regulatory Process

Marketing Strategy - Craft Cannabis

● Opportunities unique to cannabis○ Genetic diversity

● Terroir--outdoor grown as a specialty product● Example: Craft beer

○ There are strategies that are already in place● Consumer education required

○ Culture of local food & drink in the Berkshires

https://www.instagram.com/theorywellness/

Marketing Strategy - Certifications

● Sun & Earth ○ Earth Care & Cultivation, Human Empowerment and Community

Engagement● Sun Grown

○ No supplemental lighting during flowering, otherwise only to extend natural daylight

● Cannabis Conservancy ○ 45 Standards of Sustainability

Cultivation Plan

● Outdoor Tier 6 (50,000 sq ft) grow w/ a Tier 1 greenhouse

● Greenhouse is closed & includes HVAC, supplemental lighting

● Closed greenhouse enables keeping mothers alive through the winter

● Alternative strategy=start from seeds each year

● Use companion crops to support pollinators, limit erosion, and control smell

Cultivation Risks

● Outdoor cultivation offers more risks than indoor

○ Mildew○ Pests○ Bad weather

● Estimated 30% crop loss per year

Sustainability

● Indoor cultivation is extremely energy intensive

● MA has energy standards that encourage LED lighting

● Sustainable future for cannabis is outdoor grown

● Least energy use= save seeds & start from seeds each year

Energy

https://www.pharmout.net/outdoor-cannabis-crop-risks-outdoor/

Cultivation Timeline & Forecast

Tier 6: 2,000 lbs

Tier 11: 4,000 lbs

https://www.leafly.com/news/growing/outdoor-cannabis-growing-calendar

Organizational Structure

Co-Owner

Head Cultivator

Full-time Assistant Cultivators (4)

Planting and Harvest Assistants (6)

Co-Owner PartnerExecutive

Management Management

Staff Management

Financial Plan

Estimates:● Crop loss= 30%● Local taxes= 3%● State taxes=10.75%● Federal taxes=based on income

Tier 6 Tier 11

Price/ lb $2,500 $2,500

# of lbs 2,000 4,000

Gross Revenue

$5,000,000 $10,000,000

Startup Costs Breakdown

Greenhouse— ~$650,00● Capital cost = $131.50 /ft2

● Energy cost = 27.64 per ft2/yr

Labor— ~$250,000 ● salaries & training for both full time and

temporary labor● Managers need background checks

Fence & Security— ~$200,000 ● fence, security cameras, & storage of data

required by MA regulations

Startup Costs Breakdown (CONT.)

Equipment— ~$400,000 ● could include tractor,

harvesting equipment, drying & curing equipment

Licensing— $16,175

● Tier 6 Outdoor = Application Fee $1,700 + Annual License Fee $13,750

● Tier 1 Indoor = Application Fee $100 + Annual License Fee $625

Legal Estimate— ~$100,000

Plant Costs— ~$150,000● Includes seeds, pots, nutrients,

pesticides, row cover, tags, testing

Sales/Marketing— ~$100,000

Land— ~$500,000

Recommendations & Final Takeaways

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Final Takeaways ● As currently set up, regulations in Massachusetts are very expensive for

small farmers and need to be changed in order to uplift these farmers● Strategies we’ve seen to address the high start-up costs:

○ Ted Dobson/ Theory○ John Moore/ Roaring Glen Farms○ Jake and Averill’s partnership

● Need strategic partnerships

Alternate Strategies

● Saving Seeds (Instead of mothers/cloning)○ Lowest cost long and short term ○ Lowest carbon footprint

■ Only need a hoop house○ Allows for specialized genetics○ Decreased harvest

● Craft Marijuana Cooperative ○ Allows for resources to be pooled

Policy Recommendations

● National: Remove marijuana from Schedule 1 list● State: Make licensing process easier for farmers

○ Faster process, make sure approval lines up with planting season● Local: No limits on farm size at the local level

○ Microbusiness size is not profitable○ Don’t further limit the options for farmers

● Local municipalities need to be strategic partners to farmers, not an additional cost or another barrier

Thank you!Professor Gardner

Our clients: Jake Zieminski, Averill Cook

Interviewees: Ted Dobson, Sam Milton, Donna Norman, John Moore, Marion Mcnabb, Tony Kieffer

Steve Fogel

Agricultural Commission

(And Lucas the dog)

Appendix

Energy Use – Indoor Marijuana Cultivation

Indoor Energy Cost Breakdown

https://www.esource.com/tas-f-18/harvesting-energy-savings-indoor-agriculture-facilities

Cannabis Cultivation Innovation Driving Cost Reductions

Production Cost Trends-National Data *Not adjusted for Ma

Financial Estimates Breakdown (Excel Sheet)

Our estimates for price

National Average Price

Bibliography (1)Adams, Dan. “Sky High: Mass. Marijuana Is among the Most Expensive in the Nation - The Boston Globe.” BostonGlobe.Com, 16 Sept. 2020,

https://www.bostonglobe.com/2020/09/16/marijuana/sky-high-massachusetts-marijuana-is-among-most-expensive-nation/.

Aguirre de Carcer, Giadha. The Cannabis Energy Report. NewFrontier Data, 2018.

Application Checklist. Cannabis Control Commission.

Chen, Angela. “Why the Future of Marijuana Farming Could Be Craft Weed.” The Verge, 21 Nov. 2018,

https://www.theverge.com/2018/11/21/18106349/craft-weed-ryan-stoa-marijuana-agriculture-farming-cannabis-interview.

Cowgill, Terry. “‘Grown in the Berkshires’: First Outdoor Cannabis Growing Facilities in the State Planned for Sheffield.” The Berkshire Edge, 8

Apr. 2019, https://theberkshireedge.com/grown-in-the-berkshires-first-outdoor-cannabis-grow-facilities-in-the-state-planned-for-sheffield/.

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https://www.investopedia.com/articles/investing/111015/future-marijuana-industry-america.asp. Accessed 15 Nov. 2020.

Guidance for Farmers. Cannabis Control Commission, 16 Jan. 2020.

Koh, Adam. “COVID-19 Strikes Wholesale Cannabis Market.” Cannabis Business Times,

https://www.cannabisbusinesstimes.com/article/covid-19-strikes-wholesale-cannabis-market-flower-sales-prices/. Accessed 15 Nov. 2020.

Bibliography (2)Lastreto, Nikki. “Why Choose Sungrown Cannabis, and What Makes Outdoor Cultivation Superior?” MERRY JANE,

https://merryjane.com/culture/why-choose-sungrown-cannabis-and-what-makes-outdoor-cultivation-superior. Accessed 2 Nov. 2020.

“Licensing.” Cannabis Control Commission, https://mass-cannabis-control.com/licensing/. Accessed 3 Nov. 2020.

Local Roots Cannabis Crafted for Recreational Use in MA. /our-local-roots. Accessed 2 Nov. 2020.

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“Outdoor Sustainability.” Theory Wellness, http://www.theorywellness.org/ma/sustainability/outdoor-sustainability/. Accessed 3 Nov. 2020.

“---.” Theory Wellness, http://www.theorywellness.org/ma/sustainability/outdoor-sustainability/. Accessed 2 Nov. 2020.

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Schaneman, Bart. “Prices up for Wholesale Flower in Both Newer and Mature Medical Cannabis Programs but Leveling Off.” Marijuana Business

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Schoenberg, Shira. “Massachusetts Farmers Who Want to Grow Hemp Are Stymied by State Law.” Masslive, 13 Mar. 2019,

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Bibliography (3)Shapiro, Katie. “A Certified Organic Labeling Program Is Coming To Cannabis In 2020.” Forbes,

https://www.forbes.com/sites/katieshapiro/2020/02/03/a-certified-organic-labeling-program-is-coming-to-cannabis-in-2020/. Accessed 3

Nov. 2020.

Squibb, Susan, and The Cannabist Staff. “Desperately Seeking Outdoor-Grown, Organic Marijuana in Colorado.” The Cannabist, 5 Jan. 2016,

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“Theory Wellness | Medical And Recreational Cannabis | MA.” Theory Wellness, http://theorywellness.org/ma/. Accessed 2 Nov. 2020.