Farming with Terra Tech
Terra Tech is building a network of local farmers who grow living herbs and leafy greens for local grocery stores across the country, and plans to change the seed to cannabis where and when possible. CEO Derek Peterson saw the potential of the marijuana industry more than five years ago and after making a personal choice to leave his decade-long career in investment banking, he founded the Irvine, Calif.-based company that focuses on local farming and medical cannabis.
Edible Garden employs local farmers who exclusively grow, pack and ship their own products and to retail locations that are no more than two hours away.Today, Terra Tech is looking to become the first publicly traded company in the country to hold a medical marijuana license. The company in March applied for four licenses in Nevada: two for dispensaries, one for a cultivation facility and one for a production facility. Previous to this move, the company had been operating in the industry on the sidelines by selling hydroponic equipment. “Back in 2009 [when the company started] they were putting people in prison for cultivating, so there was a lot of risk at that time, but there has been a huge paradigm shift,” Peterson explains.
Peterson is selective on where the company will apply for a license to be a cultivator. Nevada was a prime location because legislation created a for-profit environment, a free market economy that is bringing heavy competition to the area and the state will honor medical marijuana cards issued in other states. Terra Tech has also applied for licenses in Florida and New York. “We are trying to compete in markets we have a broad geographic footprint in so we can be a major commercial producer,” Peterson explains. “Our intent is to launch brands around our cannabis.”
Although Terra Tech is looking to switch its seed from produce to cannabis wherever possible, Peterson says the company will still produce both because of the success of Edible Garden. The company will look to acquire more greenhouse space, which is good for both produce and cannabis. “The marijuana industry is coming out of the dark and into the light, and the way to do that is greenhouse cultivation,” Peterson says. “That will drop the cost of production and offer more attractive price points. Instead of $600 a pound, we could sell for $60 to $100 a pound. It creates extra margin for the company and lowers the price point for the patient and consumers.”
The quality of the cultivator will become more important as the industry grows, Peterson believes. “What we see now is small cultivators growing in warehouses, basements or homes and you don’t know the standards under which they are growing, which is a concern for us and someone using it medically for HIV or cancer, for example,” he explains. “We think there will be an opportunity to standardize and who is better equipped to do that than the people who are growing good, quality produce for major retailers?”