Flow­ers any­more”

Bloomberg Businessweek (North America) - - Innovation -

world.” He runs a dis­pen­sary, Heal­ing Har­vest Farms, and teams up lo­cally with a com­pany that makes the CO2 car­tridges that power vape pens. “Tim Blake is a real in­no­va­tor who has shaped this in­dus­try,” says Les­lie Boc­skor, an in­vest­ment banker and in­dus­try watcher re­ferred to as the War­ren Buf­fett of cannabis. Blake’s bet on ex­tracts, Boc­skor says, may set him up to shape it again. “There are many peo­ple who be­lieve the fu­ture of the en­tire in­dus­try is con­cen­trates,” he says.

Blake is us­ing the Emer­ald Cup as a plat­form to el­e­vate ex­tracts from a recre­ational prod­uct for dab­bers to a sub­ject wor­thy of se­ri­ous at­ten­tion. His rosin busi­ness has been up and run­ning for about a half-year. He takes an all-nat­u­ral ap­proach, mix­ing leaves or buds with ice and wa­ter, fil­ter­ing the slush, and dry­ing the re­sult. Other pro­duc­ers use com­pressed CO2 or sol­vents such as al­co­hol and bu­tane to strip the plants of their oils and chem­i­cal com­pounds, in­dus­trial meth­ods that are used to re­move oil from peanuts, soy­beans, and corn. Blake’s way of do­ing things is also par­tic­u­larly good at re­tain­ing “ter­penes,” or­ganic com­pounds that give mar­i­juana strains their dis­tinc­tive scents and af­fect the na­ture of the high. “We’ve de­vel­oped what we be­lieve is the finest con­cen­trate-mak­ing op­er­a­tion in the world,” Blake says.

Cur­rently he’s pro­duc­ing about 15 pounds of rosin a month, which re­tails for more than $60 a gram. (Con­cen­trates fetch higher prices than dried herb, from $30 to $90 per gram, com­pared with about $ 10 for flow­ers.) He says le­gal­iza­tion will spur an ex­pan­sion in the mar­ket that could spike out­put to 100 pounds a month. That would bring in about $2.7 mil­lion ev­ery 30 days— or as some­one us­ing his prod­uct might put it, a ton of money, dude.

More broadly, U.S. sales of le­gal cannabis hit $5.4 bil­lion last year, up from $4.6 bil­lion the year be­fore, ac­cord­ing to Ar­cview Mar­ket Re­search. The ac­tual mar­ket is much larger. Colorado, where weed’s been le­gal for recre­ational use since 2012, es­ti­mates that only 60 per­cent of the pot con­sumed there is pur­chased from li­censed out­lets.

Money and in­no­va­tion in the mar­i­juana mar­ket, as well as chang­ing pol­i­tics, have at­tracted Sil­i­con Val­ley’s at­ten­tion. In­vestor Peter Thiel’s Founders Fund par­tic­i­pated in a $75 mil­lion fund­ing round with Pri­va­teer last year; in ad­di­tion to Leafly, Pri­va­teer owns Til­ray, a $26 mil­lion pro­cess­ing fa­cil­ity on Canada’s Van­cou­ver Is­land. And in Cal­i­for­nia, Sean Parker of Face­book and Nap­ster fame is back­ing an ini­tia­tive that’s likely to ap­pear on Novem­ber’s state bal­lot. It’s gained trac­tion with pro­cannabis groups and even Lieu­tenant Gov­er­nor Gavin New­som.

Should it pass, the Adult Use of Mar­i­juana Act would le­gal­ize the pur­chase of weed by any­one 21 and older—23 mil­lion Cal­i­for­ni­ans—and fur­ther boost the state’s le­gal cannabis mar­ket, which Ar­cview re­cently val­ued at $1.3 bil­lion. (Cur­rently, only medic­i­nal mar­i­juana is le­gal.) At the Emer­ald Cup in De­cem­ber, Blake pub­licly en­dorsed the idea, which some in the com­mu­nity are wary of for fear it might cor­po­ra­tize the in­dus­try. There doesn’t ap­pear to be polling on Parker’s mea­sure; how­ever, a 2015 sur­vey con­ducted by the Pub­lic Pol­icy In­sti­tute of Cal­i­for­nia found that 53 per­cent of Cal­i­for­ni­ans sup­ported le­gal­iz­ing recre­ational weed, the most since polling be­gan.

Blake might just be in the right place at the right time. Through the years, he’s tried his hand in in­dus­tries such as mu­sic (he started a record la­bel that signed funk mu­si­cian Bootsy Collins), real es­tate, and vir­tual re­al­ity. His gas sta­tion—which he bought af­ter hav­ing a vi­sion dur­ing tran­scen­den­tal med­i­ta­tion— is also a spir­i­tual re­treat and psy­che­delic-trance mu­sic venue.

Tech­ni­cally, what he’s do­ing now is against fed­eral law, though in Cal­i­for­nia it’s a le­gal gray area. Blake be­lieves his method is le­gal be­cause he doesn’t use sol­vents. Raids hap­pen, though the Obama ad­min­is­tra­tion hasn’t pri­or­i­tized crim­i­nal­iz­ing th­ese en­ter­prises. Whether a Pres­i­dent Trump would con­sider what he’s do­ing part of mak­ing Amer­ica “great again” is un­clear, but Blake ap­pears safe for now and sees noth­ing but growth ahead. “The kids com­ing up, this is how they’re be­ing in­tro­duced to cannabis,” he says. “When you’ve tried ex­tracts, you go and smoke a joint and it tastes dirty.” <BW>

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