Hello, everyone out there. Looking forward to our next MJBiz panel discussion today. We have a really excellent webinar set up for all our audience. We're looking forward to having you weigh in with some questions. So please feel free to send those questions along as we're talking. They will show up in the bottom of the feed because we definitely want to get as much viewer participation as possible. So the title of our webinar today is Scaling Success: Building a Profitable Cultivation Business. Just to let you know, I'll be moderating the discussion today. And my name is Chris Casacchia. I'm a staff writer for MJBizDaily. Please don't forget to connect through all our social media channels here, obviously mjbizdaily.com. A lot of post-election updates, pre-MJBizCon developments, and news. So please track us however you get your information.
Before I introduce our panel today, I just want to let everyone know that GrowGeneration will be exhibiting at MJBizCon in, wow, less than a month, about three weeks away. They're going to be exhibiting at, and please check them out at their main booth in the cultivation hall. That number is 35019. And now I'm going to do a little introduction of our panelists, and they're going to kick off this presentation. So we have Matt Koch, VP of Commercial Services. We also have Travis Goldstein, Director of Market Development. And we have Sean Reardon, Commercial Sales, East Region. Just want to welcome everyone to the panel. Really looking forward to hearing what you guys have to talk about.
Obviously, you know, the expertise that you guys are bringing to the space, you know, I think is going to be a lot of beneficial talk for the listeners here on the panel. Right now, without further ado, I'm going to kick it over to the GrowGeneration folks.
Hey, Matt. I think you're on mute. If you could unmute yourself.
Hey, everyone. I'm Matt Koch. I was talking for the last two minutes. I just want to say thank you to MJBiz, and thank you to all the attendees for taking the time and joining us today. We are excited to educate you on GrowGeneration, our commercial services, our solutions, our products, and share key insights and tools and best practices in building and scaling a profitable cultivation business, so whether you're a current commercial cultivator, thinking about getting into the cannabis cultivation space, or simply interested in learning more about the business of cultivation, we're here to provide the expertise and resources needed to support your success.
A few of the topics we're going to be discussing today are our commercial services and our team, and how we assist cultivators in building cost-efficient and profitable operations, discussing the current state of the cannabis cultivation market, and some of the challenges that cultivators face in achieving profitability, and discussing operational efficiency and how GrowGeneration can help streamline your operations from design build-outs to ongoing management, as well as how to build a strong foundation for cultivation success. We're also excited to have two of our preferred commercial partners joining us today, Brandon Rennick with Desert Flower Farms and Michael Landy with Counterculture Cannabis, who are going to share their real-life success stories in working with the GrowGeneration commercial team and also discuss some of the challenges they faced and how they overcame those challenges.
Joining us from the GrowGeneration commercial team and presenting today, we have Sean Reardon, Travis Goldstein, and myself. Again, I'm Matt Koch. I am the Vice President of Sales for GrowGeneration. And I've been in the cannabis cultivation industry for 16 years, starting as an 18-year-old kid growing weed in my first apartment in California, and have since worked in small-scale grows to large commercial indoor, outdoor, and greenhouse operations. And I also spent a decade helping build the largest chain of hydroponic and garden retail stores in Northern California. And I've had the privilege of being with GrowGeneration for the past four years, during which I've helped build and lead our commercial sales team, which is now comprised of 12 highly skilled industry professionals strategically placed throughout the country.
And together, our focus has been on fostering strong partnerships and delivering exceptional customer service to some of the largest single-state and multi-state cultivation facilities across the country. I'm going to kick it over to Sean and Travis. We're going to give a quick background on their experience in cannabis and what they do for GrowGeneration. Travis?
Yeah, thanks, Koch. My name is Travis. I've worked in indoor commercial cultivation for about 14 years. I have experience in a variety of media and lighting categories from one light up to hundreds of lights. Additionally, I own and operate an indoor facility here in Michigan, where we actively test and develop a lot of our private label products here at GrowGeneration. I currently work as a Director of Market Development, which entails helping strategize on products, market alignment, and how to best collaborate and help cultivators implement both drip hydro products as well as all of our private label products into their regimen. Sean?
Hey, thanks, Travis. Hey, guys. I'm Sean Reardon. I've been working with the plant since 1997 without dating myself too much. I've been working in sales, in hardware, specifically in cannabis, directly for 18 years, the last six working on the GrowGeneration commercial team. Prior to GrowGeneration, I started and operated a chain of garden centers in New England, ran that for about 12 years, and then was more than happy to fold that into the GrowGeneration family. Obviously, doing that for such a long time, I've seen everything from, to Matt's point, tent growers to all the way up to MSOs, guys with hundreds of lights, illegal grows. I've seen it all, which gives me a good base to help customers of all walks of life. I've seen the industry change. It's so fast. I've seen the good, the bad.
Hopefully, we're going to see some more good times coming up here. I've been blessed to work with the GrowGeneration team from the retail division all the way up to upper management. It's just been a true blessing. It's been amazing. We've accomplished a lot. We've got a lot more to do. We've got a plan for that. And we're looking forward to telling you guys a little bit more about that today. So thank you.
Thank you, Sean. Before we get into our first discussion, which is just an overview of our commercial division, I just want to give you a broad overview of GrowGeneration as a company. GrowGeneration is the largest chain of hydroponic and specialty garden retailers in the country. We currently operate 31 stores spread across 13 states, as well as two large distribution centers, one on the East Coast, one on the West Coast, supporting thousands of growers nationwide. We have a commercial division, which is dedicated to serving some of the largest single-state and multi-state cultivation facilities in the industry. We have a wholesale division, which distributes our own private label products as well as leading brands, supporting retail partners with high-quality products across the country. We have an e-commerce division, which manages a robust online platform for convenient ordering and customer support for growers of all sizes.
GrowGeneration has a full suite of high-quality private label and proprietary brands, which we're excited to tell you more about later on in this call. I'm going to kick it back over to Sean, who's going to give a broad overview of our GrowGeneration commercial team and our expertise in supporting cultivators with our products, our services, and solutions that help drive profitability. Back to you, Sean.
Thanks, Matt. Obviously, we do everything at GrowGeneration. We're one of the few that has such a robust commercial team as well as a retail division to service anybody and not just the cannabis industry. So we're unique in that manner. But something we focused a lot on as of late is our facility design capabilities, really being able to bring every plan, every dream up to today's tech and getting it operational. And that starts with our engineering team, which has really come on strong in the last few years. We have a group of guys working on an engineering team. We also work with third-party vendors. So we're able to produce stamp plans ready to be passed to a township to be approved. Our team were extremely adept at helping implement automation, controls for climate irrigation, whatever it may be.
We're not just designing a box for you and then passing it off. We can complete the project from start to finish. Keeping in line with that, we have, in my personal opinion, of course, unrivaled product selection from our best-in-class. We have our in-house brands, ION, Char Coir, Drip coming on strong, rock steady. Our lighting has super low return rates, which we're very proud of. Obviously, Char Coir being the leader in the marketplace and Drip coming on super strong as of late. I think I can speak for the entire team when I say we don't operate like a typical one-and-done sales force. We understand the pressures of the market with our customers. We try to make our pricing the most favorable for the customer, not just for our bottom line. One of my examples I tell my customers is, "Listen, I don't work on commission.
I'm not trying to steer you to one thing or the other. I'm not making more money by selling you one thing or the other. We're really here for the long haul, which is. I'm proud to say that I can end a sales call by telling them I'm a business partner. There's no pressure in our game, and that makes the process a lot easier, and a lot of the credit goes to our team for developing that model. We do have a new B2B platform rolling out. We're going to touch on that a lot later. So that's going to be a game changer, creating efficiencies and helping save time for our customers and obviously putting their pricing locked in so there is no negotiation anymore. If there needs to be, they're welcome to do that.
If they're getting something at a great number, they can just plug right in and buy it again. In total, we have 12 commercial sales professionals in the commercial team with over 200 years of combined experience, which is tough to find in this industry. That's a lot. When you really put it all together, we're able to bounce ideas off each other. Not only our customers get us, they get me, they get Matt, whoever we're working with. They get that white glove service. But we also have a really robust back-end support system. Customer service reps aren't just running around answering emails. They're dedicated to a certain customer. They handle that customer directly. They know them intimately. A lot of times, I'm not proud to say it, but they don't even call me. Sometimes they just call the customer service team.
And they're able to handle it, which it's great for them. It takes me out and enables me to do other things for that particular customer. Logistics, we have a great logistics team, getting people their stuff on time, making sure they're getting them the best price. We all know that shipping charges go up and down like the market. So we're really, really happy with the way that's been playing out as of late as well. Most importantly, GrowGeneration as a company, we're financially stable. Our books are clean. That enables us to really offer flexible credit terms for our customers, which is everybody needs help, 30-day rolling, 45, whatever it may be. And our accounting team is always open to hear from our customers and hear what they need help with. And we're always willing to lend a hand as well as offer financing from start to finish.
We even finance CapEx if need be if it fits. All in all, there's no other team doing it like we're doing it right now. So we'll continue to grow. Thanks, Matt.
Thank you, Sean. Well said. And just to continue on the B2B portal that Sean mentioned, something we're really excited about and that we're launching this month. And GrowGeneration's commitment to advancing technology has really been a central pillar of our strategy to support commercial cultivators. Our investment in cutting-edge platforms like the new B2B portal really reflects on our focus on creating innovative and streamlined solutions that simplify the purchasing process.
Some of the comprehensive tools that you're going to have access to with the new B2B portal is a streamlined ordering system, allowing cultivators to effortlessly browse and purchase products from GrowGeneration's comprehensive catalog, having real-time tracking of your orders from placement to delivery, giving you greater transparency and Control of your inventory flow, access to all your invoices and managing your invoices.
Having a central access point to view your invoices for easy reference and download, and financial organization, access to your credit and financing, being able to view your credit terms and available financing options and account balances to support cash flow planning, as well as customized pricing, giving cultivators access to custom negotiated pricing and discounts that are tailored to each customer scale and purchasing history, as well as giving them purchasing analytics, detailed analytics on purchasing trends, volumes, and spending patterns to inform purchasing decisions and budgeting.
Also giving cultivators personalized product suggestions based off of previous purchases and inventory needs, as well as direct access to GrowGeneration's customer support team, our commercial sales team, your dedicated commercial sales rep for assistance and product questions and consulting as well, and as well as order history and reporting, giving cultivators full visibility into past orders and spending, enabling better financial planning, as well as analysis for long-term cost savings. So these tools are really designed to simplify cultivators' daily operations, enhance financial management, and provide actionable insights that are really going to empower cultivators to make data-informed decisions. So we're really excited to tell you more about this and how to access this portal at the end of the call. And excited to get this launched this month as well.
Moving on to our next topic, we're going to be discussing first just the current state of the cannabis cultivation market and some of the challenges that cultivators face. The cannabis cultivation market is a challenging industry. It's continuing to become more challenging but with that, there's a lot of opportunities as well. I just want to discuss the current state of some of the established markets like California, the market I'm in, Colorado, Michigan, Oklahoma. I've experienced market saturation and price compression, which has been a real challenge. They've experienced a glut of supply, which has led to significant price drops in the wholesale market and this has strained cultivators' revenue potential, especially as new players continue to enter the market in recently legalized states, which has intensified competition so more than ever, certainly in these established markets, you have constant shifting consumer preferences as well.
In these condensed markets, demand is shifting from traditional flower products to other forms such as edibles and concentrates and infused products. Also, the importance of growing specific cultivars. California specifically, you have to adapt to the market demands more than ever. And you have to grow specific strains that California markets, such as growing a specific strain under the candy brand. And if you don't grow the specific type of strain, you're not going to get top dollar for your product. And you're going to have a more difficult time getting rid of your product. So knowing what the market demands and making sure that you're staying up to date on these strains and making sure you're growing the right strains is really crucial. You might think you have great product. It's chunky. It has a lot of terpenes. It's frosty.
But if it doesn't have the right nose that the market demands, that could be a difference of $100 or $200 a pound, which cuts into your profitability big time. So cultivators really must adapt to these trends, which may require them to alter cultivation strategies, add extraction facilities, or invest in new technology. Now, that was the already condensed markets. I want to talk about the recently legalized markets. The cultivation market is experiencing rapid development in new markets, which is fueled by high demand and the excitement surrounding newly established markets. However, cultivators in these states still face unique challenges and opportunities as they navigate the initial phases of industry growth, regulatory frameworks, and competitive positioning. You have market demand and growth potential as well. Newly legalized states have generated significant consumer interest, leading to high demand for cannabis products.
This demand, coupled with limited initial supply, has created a favorable market environment for early cultivators to achieve premium pricing. Many of these markets are expected to grow quickly, providing a solid foundation for cultivators to establish their brands and gain market share before competition intensifies. Even in these new markets, you still have pricing pressures and market saturation. Initially, newly legalized states may experience high prices due to limited supply, but this can quickly shift as more cultivators enter the market, and over time, price competition intensifies, and cultivators face downward pressures on margins, so to stay competitive, cultivators in these states must focus on cost efficiency and product quality to stand out as the market saturates and consumer expectations rise. Another big one is consumer education and market preferences. In newly legalized states, consumers are often new to cannabis products with very varying levels of knowledge and preferences.
This presents both challenges and an opportunity as cultivators need to invest in consumer education and branding to build trust and awareness around their products. Cultivators who establish strong brands and emphasize quality and connect with local consumer values have a unique chance to secure brand loyalty early on. You also have regulatory and compliance costs. Cannabis cultivation still remains highly regulated, with strict compliance costs that vary by state, regulations around pesticides, quality testing, packaging, and distribution, all added financial and operational burdens that can cut into your profitability. Access to capital is a big one.
Even though the cannabis industry is growing at a rapidly fast pace, cannabis cultivators still face limited access to traditional banking and financing, leading them to rely on more expensive financing options, such as high-interest loans or private equity funding, which may not be sustainable long-term, especially given the pressures to turn profitability quickly. One way GrowGeneration can help with that is giving cultivators access to credit terms and financing options in some cases, which allow cultivators to get their operations up and running without the upfront financial strain. You also have operational and production efficiency. Cultivators must optimize every aspect of their production in this market to stay competitive, and this includes automation, energy-efficient practices and equipment, and precise nutrient management to improve yield and quality while reducing costs, and Sean and Travis will get into that a little bit more in detail later on.
You also have energy and resource management. Cultivating cannabis, especially indoors, is energy-intensive. As energy prices rise and sustainability becomes a greater priority, cultivators are increasingly investing in energy-efficient equipment, automation, and efficient lighting, which we'll also discuss later on. To achieve profitability in this very competitive market, in the established market, certainly, cannabis cultivators must navigate these challenges through innovation and adaptability. Those who can leverage data-driven cultivation practices, invest in energy and labor efficiencies, automation, and more importantly, align their product offerings with market demands, have the best chance of sustaining their operations and achieving profitability. In new states, while the cannabis cultivation market in recently legalized states presents substantial growth opportunities, cultivators still must navigate complex regulatory landscapes, secure capital for infrastructure, and develop supply chain resilience.
Those who can invest in efficient operations, branding, and consumer education are well positioned to capitalize on these emerging markets and establish themselves as leaders as the industry matures. That was just a quick overview of the current state of the cannabis market, not only in established markets, but also opportunities in new markets as well, and some of the key challenges there are and how to overcome those challenges. Next, I'm going to kick it back over to Sean, who's going to discuss operational efficiency and how GrowGeneration can help streamline your operations from design buildout to automation.
Thanks, Matt. Yeah, when I thought about what you need to do to streamline an operation, it really all starts with the second you start thinking about the facility. And then when you start to design that facility, whether it's a retrofit of an existing building, we've done them all, an old candy factory, a dilapidated warehouse. I mean, I've seen every type of ragtag building we've brought back to life, or a really nice, complete ground-up build. It depends. Nothing is unique. It's all just part of the game. You have to know every aspect of how you intend to operate that facility in order to keep your cultivation plan moving in the right direction, diving into the minutia, as I like to call it, of your plan, right? Knowing exactly what you're going to be doing for your plant spacing, from veg to flower.
Are you going to be 0.8 sq ft? Are you going to be down to the inch, really? You got to know exactly what you're going to be doing. Because that all determines how many grams you're going to harvest, down to the gram. That will all determine the spacing of your rooms, the sizing, and then I always say I like to work back to front because then you figure out those things first, then you can start thinking about how you're going to do your dehums, water in, water out. But until you know exactly what the spaces look like, you can't get to that type of equipment. When someone says, "Oh, I've got 10,000 sq ft. How many lights do you think I'll need?" I don't know. What are you trying to do? I don't know. Multi-tier? Are you trying to produce flower for hash?
There's a lot of things that go into that design phase, which will ultimately determine how your operation is streamlined. Along with that, obviously, every good business, you have to have a business plan. How do you plan to operate the facilities? Is it a one-year, a two-year, a 10-year? Do you hope to sell the business in a certain amount of years, or you just hope to operate it as long as humanly possible? That is very important. I mean, when you determine how much capital you're going to put into it. Say a local guy comes to me and says, "I just want to do another 30 lighter to add on to my pump out some more weight for the next year or two." You're not going to use the best high-end materials for walls and lighting.
You want to help them kind of get through that business model. If it's going to be a guy who's going to do he says, "I want to operate from five to seven and sell to an MSO," then yeah, you better put in top-notch harvest panels, a robust HVAC system, top-tier lighting, full irrigation and environmental control system. All those things are going to determine ultimately how marketable your facility is to the next guy. Something that I like to use, it's kind of a phrase that I've kind of beat to it like a dead horse here, but the workflow. In order to run a top-tier facility, it comes back to design. Your workflow is based on the design of the facility. How well are you laid out is how efficient your workers are going to be in their day-to-day.
The size or scale of the operation doesn't really matter. Even in a small niche facility, you still have to have a perfect design so that the workflow is going in the right direction every day. And you're putting out as much as you possibly can on a daily basis. A lot of startups, they focus more on the grow, their veg, flower. They focus so much on how much they're going to put out because they're worried about their bottom line. But they overlooked basic stuff, ample storage space when you're input, stuff that's coming in from the outside world. You're having trucks show up. Do you have a decontamination area? "Oh, I didn't think of that." Do you have airlock rooms? Do you have even an air curtain to clean off these pallets? "Oh, I didn't think of that." Those things are crucial.
If you don't have, you got something that just, say, you get packaging materials coming in from China. You've got to let those decontaminate for at least a day or two somewhere in that facility. You can't just bring them right into the grow and possibly throw a wrench in what you have going on in there. And those types of little tidbits of experience that we have at GrowGen on our team really blows people away some of the times. Having enough storage, obviously, whether it be outdoor or indoor based on your climate, that's going to help you buy in bulk. If you can buy your inputs in bulk, especially media, fertilizer, and things of that nature, that's obviously going to help you drive down costs, which in today's market is crucial.
Those are some of the things that GrowGen really excels on, is helping our customers drive down their input costs. Establishing consistent procedures, protocols throughout the facility to help ensure uniformity when your product comes out. You have to be constantly analyzing those things. Just because it's working right now doesn't mean you can't be better down the road. Bringing in workflows from other industries, advanced concepts from people that you might hire that worked in a packaging facility, they might hear them out, listen to what they have to say. In many ways, your space is a medical-grade factory. You're producing goods that are going to be judged in an open marketplace by consumers all around the country. Implementing time-saving protocols for all departments. It doesn't just go with one. Purchasing of consumables, your operations, that plays a huge role.
GrowGeneration, obviously, can help handle all the consumable needs for a large facility, which saves you time. And ultimately, that helps you generate more profit in a declining market of flower value. This is something that I talked to my team about, but I wanted to touch on. And it's something I always practice with my business. It's slightly off topic, but we see so much turnover in this industry, in these facilities. And that damages workflow, damages efficiencies, jumping from company to company. I'm talking to one guy who I think is very astute at one company. I call him three months later, and they say, "Oh, he's gone." And a lot of that comes down to either how they're treated or how that company's being run. So I really would like to see some more of the top-tier facilities offering either equity share or profit share.
And this will really help, I think, personally rebound and help these businesses really maintain their core group of employees, which we've done here at GrowGeneration, which has really helped us a lot. I always did profit sharing at my company. It really says a lot about who you are. And I think it really is reflected in the goods you put out when you have a strong team that's working together. We place a lot of value on full-service solutions. At GrowGen, our commercial team, we have kind of an integrated approach because we do offer a full suite of solutions, design, build, outfitting, any size facility, doesn't matter. We work in lockstep with our engineering team, cultivators, to develop energy-efficient designs while ensuring the facility will be scalable moving forward. We don't always leave that out.
We always talk about, "Do you want to put in 16-foot ceilings now? We want to go single now. Maybe we'll double down if the market changes. Go put another level up." All those things play a role in how successful you'll be down the road. A lot of guys now do things in stages. And we're open to help with our experience on how to do that at all times if it comes down to money. Unlike most of our competitors, we don't charge for our design work. We don't charge for our consultations. It adds so much value to our customers. I've done revisions for some customers. I don't even want to say how many times on plans with our engineering team. We do it with a smile. Our customers get the convenience of just having one person, one team to work with.
And then moving forward off the design, now you can purchase everything you need for that facility from us as well. It totally eliminates the need for various vendors. And that, again, adds cost-effectiveness with our bundled service package. It's quite nice. And customers are really seeing that now. Our goal at GrowGen is to always help support every aspect of the customer relationship, ultimately with our knowledge, our product offerings. We hope to operate or, excuse me, we hope to outfit your project in its entirety. Our goal is to not just help you from the jump, but we hope that relationship extends into perpetuity down the road where we're selling you stuff three, four, five years down the road. Again, going back to how we don't work, at least myself, guys on the team, we don't push one product or another.
We don't have a goal on how many units to sell of one particular brand. It's not how we operate. We never push one product or solution over another. We have experience working with everything. So it's like, "Hey, oh, we're interested in a rhythm system. We're interested in X system." It doesn't matter. I'll give my infield experience of that system. I'll get you the best price on that system, and we'll help you implement it if you want to do that. If you ask for my advice on something, I'm happy to offer that as well and share my experiences on why I think that might be the best solution for you.
The value of good environmentals, good controls, accompanied with a fertigation strategy, all of which we can help you with, is the only way you can collect real data and really catalog for perfecting and really pushing the limits of your cultivars and of what you're trying to do at your facility. So all that stuff kind of rolls into one with our team. I try to remain totally agnostic when it comes to selection of what it grows outfitted with. Like I said, I'm going to tell you what we have to offer for in-house brands, but I'm also happy to help you source and get the best number on any other item that's out there. And that's the beauty of GrowGen. We literally sell everything. And everybody wants to sell to us because we do have the greatest customer base in the nation.
These strategies and approach to the client relationship truly make us unique in the marketplace. And I can honestly say, from what I've seen, there's nobody doing it better than us with our catalog and products and services at GrowGeneration in the commercial division, so. Thank you, Sean. Yeah, well said. And just to continue on some of the topics that Sean was talking about was scaling your business. And there's a lot of challenges that come with scaling. And that's something we discuss with the client upfront. A client might have a 20,000 sq ft facility, and we might offer them to build out 10,000 sq ft of that with a phase one approach and then the option to expand. So there's a lot of challenges when you're talking about scaling cannabis and scaling your cultivation business. And the biggest one is consistency and quality and yield.
One, growing consistent quality and yield just in a grow is hard, but then scaling that becomes increasingly difficult. So as cultivators scale on larger scale operations, they must adopt quality control measures, invest in automation and technology, all of which can require sophisticated equipment and expert personnel, both of which can increase costs. You have supply chain management. Scaling often requires more complex supply chain logistics, including sourcing larger quantities of material, coordinating larger shipments, and managing distribution networks. And that's really where GrowGeneration comes in, is our network, not only of our 31 stores, which also act as fulfillment centers, but our large distribution centers on the East and West Coast, which are created to house millions of dollars of essential inputs so that we have the products that every cultivator needs and can deliver it on time. You also have workforce management and training.
Sean touched on this a little bit, but as operations grow, managing a larger workforce and ensuring consistent training become essential but costly. Skilled labor is necessary to maintain operational efficiency and quality. Cultivators often face high turnover rates and rising wages, which can also erode profit margins. Facility expansion costs. Growing operations typically require expanding facilities or adding new locations. If you want to expand from 50 lights to 100 lights or add new facilities, and whether you're expanding an indoor greenhouse setup, this involves substantial capital investment and sometimes lengthy permitting processes as well. To protect profit margins, cultivators must balance operational efficiency and smart input purchasing, resource management, and scaling strategies. Those that streamline their operations and control costs and respond dynamically to market demands are really more likely to sustain profitability in this competitive and evolving industry.
So next, I'm going to kick it over to Travis, and he's going to discuss how to build a strong foundation for cultivation success and the importance of selecting the right products for cultivation, from nutrients to lighting and environmental controls, as well as the role of product innovation in increasing yields and lowering input costs, and discuss in detail each one of our private label offerings as well.
Travis?
Yeah, thanks, Matt. Yeah, I totally agree with Sean. I mean, all these are great points in reference to efficiency. And one of the things at GrowGen that we're really trying to hyper-focus on when it comes to that efficiency and putting those profits back into the cultivators' pockets is our fleet of private label consumable products. I mean, as we know, the right products and tools indoor cultivation is crucial in a lot of ways.
Most importantly, again, efficiency, consistency, and cost-effectiveness. Developing these useful products that work at scale without selling you things you don't need is extremely important to us here at the GrowGeneration family. Our goal is really to trim the fat, streamline these products, streamline the services from A to Z, one-stop shop. GrowGeneration has everything that you need from our own products to products that we also sell on margin. We're talking fertilizer, medium, monthly consumables, you name it. Facilities should always evaluate these products and their effectiveness and impact on scale to help bring that cost of production down while maintaining your high-quality results. And we really feel like, again, our private label brands give you exactly that.
Firstly, what we'll talk about is Drip Hydro, which is definitely one of the things that we're most excited about at GrowGeneration and one of the projects that I predominantly work on myself. We are quality and cleanliness-driven approach to both of these lines, both our powder and our liquid line, with cost, trying to bring the cost per mixed gallon down as low as possible. Both lines took years to develop and were rigorously tested by growers around the country before hitting the market. Both lines are cost-effective, customizable. The powders are clump-free. Both lines are very well balanced and also backed by a team of advisors that can help tune these recipes and help implement these products in your facility. We've got advisors around the country from the Midwest, the East Coast, the West Coast, South.
I live in Michigan, and I attack a lot of the Midwest market, but I also work on the East Coast too. So here today, I'm actually out in Rhode Island at the GrowGeneration in Warwick. I'm in the back office in between doing facility visits and helping these cultivators fine-tune their operations. So yeah, the fleet of advisors is another huge, huge plus when it comes to Drip Hydro and a lot of our private label products that we can offer. In addition to Drip, we've got Power Si product, which is a fantastic additive line that can really kickstart your crop into high gear. We have our cornerstone monosilicic acid formula at the center of that all. We also have kelp-based products, microbes, bacillus-based products, and an organic IPM product as well with control. These products are great for facilities looking for a commercially friendly organic approach to growing.
Also, we have Char Coir as well. It's a great coco coir that we can offer. We offer loose fill, a 70/30 blend. We also offer prepackaged BioP ots in one and two gallons. We also offer a Crush pot that we're really excited about that's going to be coming towards the end of the year. All the Char Coir products come RHP certified. So every time you get it, it's clean, it's cleanliness, and it's held to the same standard with every batch, especially with that RHP certified stamp. ION Lighting is our in-house lighting brand. We offer a range of LED options from propagation to veg to bloom and multiple wattages. All the LED fixtures that we do offer with ION are DLC listed, so they do qualify for those rebates.
And those rebates can also be handled in-house by the GrowGeneration team and our partners, which is really nice and also helps streamline the rebate process. We also offer HPS DE fixture for those looking to run a mixed spectrum or checkerboard lighting, which is becoming fast and popular. But we also, the thing we're most excited about, I would say, is our under canopy lights right now. Those are expected to hit market, hopefully by the beginning of this next year. A lot of the people that have been testing these under canopy lights and reporting back are reporting back at least a 30% increase in yield. So that's going to be a huge tool when cultivators are talking about efficiency and how to drive those numbers up to help improve the revenue. The under canopy lights are going to be very big.
Harvest Company is another new brand for GrowGen this year. It specializes in a lot of those ancillary products like gloves, scissors, bags, trellis nettings. These are all high-grade products that we can bring to growers at a great price, especially removing the middleman and manufacturing these ourselves. Personally, I have a 70-light facility here in Michigan. I've switched all of my bags, trellis netting, gloves, scissors, everything to Harvest Co. And I'm really thrilled with just the quality, the feel, the functionality. I mean, it's everything you're used to in some of those other ancillary brands, just with a good feel, a good price, and it's really just kind of hard to beat. And in addition to that, obviously, we carry a lot of other brands that we don't own like Quest and Anden, because, as you know, environmental controls are very important.
So we have things like Schaefer fans, Patterson fans, V-Flo fans, you name it, we can get it. That also extends to irrigation solutions and fertigation solutions like Dosatron, Netafim. We have all of those products that are readily available that your commercial account manager in your region can source and help you put together. We also offer a vertical racking solution with MMI. That's our in-house benching company. It specializes in a multi-tiered build with also offering to mezzanine levels. This allows growers to expand their footprint. And we also offer free and fast quotes on design as well. So when you wrap all this up and you combine all these private label products, they are most certainly an amazing tool to help drive that cost down while keeping production levels high and quality high as well. Again, we want to be your A to Z shop.
We want to be the one place that you go for all of your goods, from our private label brands to any other brand that you can think of, and I think offering the best pricing, the logistical solutions that everyone has touched on. We have distribution centers on the East Coast and the West Coast. We have a fleet of commercial advisors, a fleet of amazing store managers, and also a fleet of facility advisors for both Drip, for all of our other brands. So if there's anything that we can help you with as far as information, advisory, strategy on how to use these products, we're here. We're not going anywhere. And you can expect this high level of service from us from start to finish, so Koch, with that, I'll kick it back over to you.
Thank you, Travis, and well said and great overview of all of our private label products. And beyond our private label brands, we have access and strategic partners with every other major manufacturer and brand in the industry. So we're able to get you the best pricing on all those brands as well. But we are excited to tell you more about some of the new products we're coming out with and the private label brands and products that are really taking over the industry right now. Now we're excited to have two of our commercial preferred partners with us today, Brandon Rennick with Desert Flower Farms. Brandon, so happy to have you on with us today.
I actually met Brandon at MJBiz event in 2020 and have since built a personal and business relationship with him and have seen him grow from an empty shell of building to construction to helping him design his facility and just to see him with an empty shell to now cultivating cannabis and turning profit and building a brand has been really special. So Brandon, great to have you. I'd love to hear just your story and your background on what you did in this industry and how you got started and also discuss some of the challenges that you faced and how you overcome them and how GrowGeneration helped support you and contribute a little bit to your success.
Absolutely. Yeah, first, I'd like to say thank you to everyone involved and thank you to GrowGen for having me.
Can you see and hear me okay, by the way? Yes, we can. Okay, great. Awesome. Yeah. So Matt and the whole team has been amazing. And he's right. We did meet at MJBiz event, and it was in more of the conception phase. We were raising funds and getting all of our ducks in a row to expand what was an indoor rock climbing gym, to Sean's point about it's always something different that these buildings started as. And in this conversation so far today, I have to say that the folks at GrowGen absolutely have their finger on the pulse of this industry. And as a boots-on-the-ground cannabis business owner in California, I can second everything that Matt and Sean said today, from efficiencies to the current state of the market, the need to diversify, be nimble in this space.
We launched as business consultants in the cannabis industry. My brother and I had started and owned, operated, and sold businesses outside of this space. And so we were helping cultivators create efficiencies, and we learned how to cultivate in the process. And so we always joke that we got paid to learn how to be cultivators. And so we built this business by buying a rock climbing gym and converting it along with the help of GrowGeneration and all the team. It was incredible. I mean, they were there for everything. Matt always answers his phone, which is awesome and sometimes challenging in these spaces. And we took a building and retrofitted it. We put in a steel mezzanine to double the square footage of the space. And we now have a 10,000 sq ft indoor cultivation facility.
Noticing the changes that Matt's talking about and Sean spoke on, the changes in this space are real. You have to be able to make moves and shift and be nimble and be willing to accept that, yeah, maybe flower prices are down in California, but you can produce gummies and you can do all the other things that the manufactured market wants and that consumers want. We took a shift and we converted one of our 1,000 sq ft single rack indoor cultivation rooms into a full-fledged Type 6 manufacturing facility. We produce gummies for multiple contracts. We produce tinctures, vape cartridges, infused, non-infused pre-rolls. You really have to focus on efficiencies like they spoke on, but also be willing to make those changes and adapt.
And it's amazing to have good people by your side, though, because with those challenges, there's going to be new efficiencies that you have to understand. And you will need new drawings, and you will need a team behind you to say, "Look, maybe consider this or that." And that's been paramount in this adventure that we've been on. And so yeah, I mean, when it comes down to yields, lighting, automation, having the right employees, and then having the right relationships with these vendors and having the access and the ability to get what you need when you need it, it's been a challenge, but it's been a blast. And we've got some great relationships because of it. And namely, the GrowGen team has been honestly there for everything we've ever needed.
And I think that's foundationally why we have such a great relationship because we take each other's calls. We're there for each other. And it feels more like a relationship than it does conducting business. And so for that, I want to say thank you.
Thank you, Brandon. Well said. And it's been so exciting to see you grow and as a business and visiting your facility and seeing weed growing in the rooms that were an empty space. And you sent me pictures of the gummies you just created and the packaging that you now have in retail stores is so cool. So congrats on your success and excited to see you expand and continue your success story. So thank you so much for sharing that. And it's invaluable. Thank you so much, Brandon.
Awesome. Yeah, thank you.
Next, we have one of our preferred commercial partners, Michael Landy. We also met through shows and has been a cultivator for many years and grows some of the best cannabis I've seen. Michael, great to have you on. Love to hear from you and your story and your success and share a little bit about how GrowGeneration has helped you. And I know you're using Drip. And also maybe just briefly talk about some of the challenges that you faced and how you overcame them in this evolving industry.
Yeah, I appreciate you having me on, Matt. GrowGeneration has been nothing short of a blessing so far from facility advisory work, right? And using your in-house brands have been an absolute game changer for us. Just a quick background on myself. I've been in the industry 19 years now.
Our core competency is cultivation and cultivation only. We do not manufacture. We are not vertically integrated. Currently, right now, we're operating in the worst market in the country. That market is Oklahoma. Right now, our average sale for high-end indoor flower is selling for around $550-$600 a pound. We sell out every single harvest within a week of dropping, and we're operating around a 30% gross margin. So to everybody's point that spoke, operational efficiency is everything right now. As I tell my employees, hard work beats talent any day of the week, right? And also, scarcity breeds creativity. With that being said, we're able to operate and keep production costs low based on experience. And also, this partnership with GrowGeneration has, like I said at the beginning, been a blessing. Currently, we're operating with Drip. This is our fourth run right now with Drip.
We're switching over from FloraFlex, and I would never switch back. It runs extremely clean. We're able to, from a line standpoint, reduce how much we're flushing our lines because of how clean the product runs. When you talk about terpene percentage post-harvest, we're seeing a massive increase in terpene percentage as well as THC as well. So going back to operational efficiencies, my background, 19 years in cultivation, anywhere from project management, facility design, build-out, application filing to cultivation itself. We use proprietary training techniques. We're able to keep costs dramatically lower than most of our competition as well. So when you speak about emerging markets, guys making $3,000-$4,000 a pound, when operators like ourselves go into these markets, it's hard for everybody else to compete with us because we're operating at such a low cost, and that's with hand trimming as well.
Our cost of production is around $250-$300 a pound, and we're producing very, very high-end flower. So I know you guys are short on time and you want to open up Q&As. Yeah, I appreciate you guys having me on, Matt.
Michael, thank you so much. And we appreciate you sharing your story. And you are in one of the most competitive markets in the United States, Oklahoma. And the fact that you're achieving success and those margins is great. And we appreciate you sharing your story. And we appreciate your business and friendship and partnership. So thank you so much for taking the time.
I appreciate you as well, Matt.
Just to give you a quick recap, our hopes were that this webinar really highlighted how GrowGeneration's specialized offerings ranging from comprehensive design and build-out services to ongoing management support to giving you key insights into the cultivation market with real-life success stories all can transform cultivation facilities into scalable, high-performing operations. GrowGeneration's goal is to provide you with the tools and expertise needed to elevate your cultivation business to the next level. As you've seen from today's presentation and guest speakers, selecting the right solutions and partners can make all the difference in streamlining your processes, reducing input costs, and increasing yields. GrowGeneration truly is committed to being that partner, full-service partner, a one-stop shop. We're here to support you every step of the way. I just want to thank you again for everybody attending.
And we look forward to working together on your journey towards success. I think we're going to open it up for a little bit of Q&A, but we also will send you all of the information for everything we discussed today. We're going to tell you how to get access to our team and set up a consultation. And we look forward to discussing more about what your aspirations are in the cannabis cultivation space and how GrowGeneration can support your success.
Thank you so much there, Travis. Just want to take over a little bit of the Q&A here. We have a couple of minutes left. We're starting to get a couple of questions from the audience. I'll just jump in and ask you, your team. This question, does your engineers (this is from an ops manager) does your engineering team build under ISO, GMP, etc.?
Sean, are you able to take that one?
Jeez, that would be a question for the engineering team. I do apologize. I don't know the exact answer to that. I wish Quas was on here, our lead engineer, but that is why we have the engineering department. I'm a salesman, so that's something I would take to the end. So I do apologize.
Yeah, maybe we can get that. Yeah, maybe we can get that answered and put that in down below somewhere.
Yeah, absolutely. I'm sure you guys posted that.
Here's another question. How can GrowGeneration's commercial cultivation services help operators improve operational efficiency while maintaining product quality?
Sean, you kind of touched on that. You want to continue?
I'm sorry. Could you repeat that?
Sure. How can GrowGeneration's commercial cultivation services help operators improve operational efficiency while maintaining product quality?
We definitely touched on a significant portion of that during our presentation. But just being an open book with us with what you're trying to achieve and showing us what you need, not just using us as a price match company, letting us be a true business partner, that's how we help you with efficiencies, right? So I can notice if you're buying something on a one-off every two weeks or every three weeks, we'll step in and look at your. We have spreadsheets. We'll look at everything and say, "Hey, you should be buying this in bulk. I can get you a better deal if you buy X amount. It's still a half pallet. Ship it to you direct on every Thursday. I see you're buying it every four weeks.
I can ship it to you every five weeks, six weeks on a larger quantity, save you on the logistics, on the shipping rate, and then also get you a better number." I mean, we've had these conversations with some of the largest MSOs, and I had one quip to me recently. They were somewhat testing us in a business meeting. They said, "Well, are you guys prepared to handle all of our consumables and all of our stuff moving forward?" I spun it around on them. I'm not going to use the name. It's one of the largest in the nation. I said, "Well, are you? Do you have that data that you can present to us?" He laughed and he said, "You got me. I don't. I don't have any of that." So you got me there. He goes, "You're right.
We don't have it. We're not that organized." I said, "Well, we are, but we need the data to help you save money and help you with efficiencies." We're happy to do that with our team and put everything in line and put it into a spreadsheet and show you how we can save you money over a 30, 60, 90-day time frame. But we need to work together on that. I think that's most important. Again, we're not trying to gouge anybody or do anything out of the realm of understanding here. We're just trying to be business partners and help everyone be efficient and make money. At the end of the day, we're here to make money. I mean, I can speak for everybody. I don't even have to draw comparisons. That's what we're doing when we wake up in the morning.
So that's how we can help you operate efficiently and create more profit.
Yeah, I could actually compound on that as well. More or less, it's very simple. Run Drip. It takes the whole guesswork out of everything. It's dummy-proof. You're going to increase your yield. You're going to increase your quality. And you're going to increase your testing results. It's rather simple. Then also from an efficiency standpoint, GrowGeneration's entire facility advising team is top-notch, best in the nation. So they definitely can help guide you in the right way.
Thank you, Michael.
I'm happy to give a real-life example if it's helpful, if you'd like me to, Matt.
Yeah, please.
So when we designed our cultivation rooms in our facility, we ran into an issue with posts in the ground from the mezzanine installation. And we needed to shift the design of the tables in real time.
They were being manufactured and sent to us by GrowGeneration, and so we had to make a decision quickly to maximize our space, and so I FaceTimed Matt and showed him the room, showed him the poles that were not in our original designs due to the designs being made before the installation of the mezzanine, and so Matt called the engineers, and we did a three-way FaceTime call. I showed them the poles in the room, and they made real-time changes to the design of our tables to maximize the efficiency of the room, given that we now needed to contend with these columns in the room, and they did it within, I mean, what do you think? It was like 12-24 hours we had new designs.
And that went to the manufacturing of the tables, and the tables were designed to fit the room properly to maximize the amount of plants we could put in that room. So I hope that gives a real-life example. Yeah. I mean, to the folks on here that are looking to jump into this space or maximize efficiencies or whatever, that's a real example of what happened. And we're in it. I mean, we were here in the room, designing the room, laying out the tables. And we had to make a change fast. And it had to be submitted, obviously, with new designs. And those had to be correct because you don't want to order all these tables and they don't fit. Or you do, and you just lost half a table worth of plants.
A lot of folks will design their rooms because they know, "I can make so much money per square foot. And whatever square foot I lose, I'm losing money." And so those efficiencies are hugely important. And if you don't have somebody that can answer that call and make that design change immediately, you're losing time. And everyone knows time is money. So that's an example I feel like is relative. So I wanted to give that.
Thank you, Brandon.
Yeah, that's a great example. Very stressful call, by the way, but it happens. And our team jumps on things right away. And our adaptability and our relationships with our vendors speaks volumes. And our ability to pivot and make changes quickly is what separates us from the competition. So really appreciate that example.
And yeah, I'm not sure if we have any more Q&As, Chris, if we want to wrap it up, but.
Yeah, I think we're kind of running up the clock here. I think we covered so much. And I think the questions that we have left over, I think you folks kind of answered them during the panel discussion. Before I sign off, just want to thank everyone for joining on the panel. Great insights, great testimonials from customers. I appreciate everyone taking the time and joining us on the panel, Matt, Travis, and Sean. Appreciate your time. Looking forward to seeing everyone at MJBizCon this year. And I think we're just going to sign off on that on a high note today.
Thank you, Chris. And thank you, everyone.
[crosstalk] Thanks, guys. Appreciate it. Thanks, guys. Have a great day. You too.