As marijuana prices drop, growers push 'organic' cannabis - with a higher price tag

Trevor Hughes

DENVER — Organic milk. Organic beef. Organic... weed?

As marijuana legalization drives down the price of pot, cannabis companies are increasingly marketing premium products with the same kinds of language used by Whole Foods or winemakers, invoking sunny fields of plants tended by smiling famers.

But eager retailers are running into an unexpected obstacle: Americans who are still shocked that they can legally buy cannabis — any cannabis —   aren't yet willing to pay extra for higher quality, in many cases because they don’t realize there’s a difference.

"When we all grew up it was all Wonderbread and cheap eggs. I never asked if something was grass-fed and cage free," said Maka Kalai, a Colorado marijuana dispensary worker. "There's still people out there who think weed is weed."

Step inside a legal dispensary, however, and you'll find a massive range of marijuana for sale. Different strains can have different tastes and effects, in the same way that wine and tequila both contain alcohol but can produce a very different kind of evening.

Cannabis legalization has helped jumpstart the availability of strains with names like Durban Poison, Blue Dream or Strawberry Cough, but it is state-run quality testing that's prompted some marijuana to push toward organic growing practices.

Sunshine Johnston has been farming cannabis in northern California's Humboldt County for more than a decade. Marketing her marijuana as "SunBoldt Grown," Johnston avoids heavy fertilizer and pesticide use, believing her clean-grown plants will give users a better-quality high.

“I want to taste the terroir, the nature," said Johnston, 47. "I value what nature brings to the cannabis. By not using fertilizer, I believe I get a greater taste of place.”

Like the factory farms that produce most of the United States' milk, eggs, chicken and beef, many cannabis growers pump their plants full of fertilizer and flood them with pesticides. That's no surprise, given that a single pot plant can produce upwards of $1,000 of marijuana for sale. 

Much of the marijuana grown in states like Colorado, Michigan and Oregon is raised indoors in vast warehouses kept to a carefully timed cycle designed to rush the plants to maturity so they can be harvested and sold every few months.

That’s becoming a race to the bottom, experts say, because highly efficient growing techniques being deployed by large, licensed producers are pushing prices lower and lower, wiping out the traditionally strong margins enjoyed by black-market growers who didn't pay taxes.

In response, some smaller cannabis growers are betting that some consumers are willing to pay a little more for high-quality pot. But it's a bet that hasn't yet paid off.

Low-quality marijuana sells wholesale for as low as $300 a pound, while higher-quality cannabis can wholesale for upwards of $1,800 a pound. But retailers can sell that low-quality pot for roughly the same price as the high-quality stuff and pocket the difference.

"There's a reason that Walmart sells organic produce, and it's not because the company thought it was the right thing to do," said Amy Andrle, the co-founder of Denver's L’Eagle cannabis dispensary. "That reason never comes from the top. It comes from the consumer."

For generations, most American pot smokers had few options: They bought a baggie of marijuana from a black-market dealer, its provenance unknown. While craft beer drinkers savored the hops and barley and yeasts used to produce their favored intoxicant, and wine snobs muttered on about vintages and grape sugar levels, weed was just weed. Sometimes it was stronger. Sometimes it was weaker. Sometimes it gave you a headache. But almost no one had any real idea what they were smoking.

Medical marijuana began to change that. Starting with California in 1996, patients began getting a wider view at what had long been hidden, as growers grew more comfortable sharing their strains and techniques in places other than the pages of High Times.

But without any regulation -- and with vast profits to be made -- growers also began pumping their plants full of pesticides, fertilizer and other chemicals designed to protect them from insects, mites and fungal infections. With government regulators unwilling to step in, growers and retailers made all kinds of health claims about their pot and consumers were left without any outside guidance.

It wasn't until Colorado's voters legalized recreational marijuana in 2014 that regulators anywhere in the United States started getting serious about testing what was actually in cannabis products, although they were at first primarily focused on marijuana content. Colorado's regulators needed four more years to launch mandatory pesticide testing, but now every state that's legalized recreational cannabis also requires quality and contaminant testing.

Unlike tobacco, there's no central system for regulating cannabis products. That means each state with legalized medical or recreational marijuana has developed its own standards and testing rules. And because each state handles testing differently, products that might pass Colorado's testing rules might be banned in California, particularly when it comes to contaminants like heavy metals, which can enter products through the extraction process used to make vape cartridges.

Testing company CannaSafe, which checks cannabis in California, says that as recently as a year ago, nearly 25% of the marijuana it tested had too much pesticide in it. Today, the fail rate has dropped to less than 3%.

“It’s all about your profit. It can be expensive to not use pesticides," said Johnston, who grows a strain known as "Loopy Fruit" in California. Johnston said she's seen an increase in spider mites, aphids, and russet mites, which lay their eggs on new leaves and stunt plant growth. Dousing her plants with chemicals would kill off those bugs and increase her yields, but that's not how she wants to farm.

“If I had to use Roundup and pesticides, I’d not grow at all," Johnston said. "It’s not about me as a grower, but what the plant has to offer.” Still, she's frustrated that consumers aren't yet ready to pay more for higher-quality products.

At Andrle's dispensary in Denver, hundreds of marijuana plants grow beneath rows of high-intensity lights designed to mimic the sun. Growing indoors helps protect the plants from insects that would otherwise have to be controlled via pesticides, and visitors must wash their shoes before entering, to protect against soil-borne contaminants.

While many grow operations follow similar practices, Andrle's is unique in that it's one of only a relative handful with third-party Clean Green Certification. She said growing that way costs about 25% more but, and it's a cost difference she has to absorb because consumers just aren't ready to pay extra.

In states with legal marijuana, retail prices have also dropped as competition increases: In Colorado, for instance, the price of smokable “flower” has dropped 40 percent since January 2014, from $7 a gram to about $4.19 a gram today, according to BDS Analytics. In California, retail prices have stayed steady while wholesale prices have dropped 20% since legal recreational sales began last year, said Matt Karnes, the managing partner of GreenWave Advisors, citing data collected by Cannabis Benchmarks.

While some producers are focusing on volume, enthusiasts say cannabis produced without artificial fertilizers and pesticides provides a purer, cleaner "high," much the way some people think organic milk tastes better. Contaminants are also a major concern for medical marijuana users, who say they want to be sure the pot they're consuming is as pure as possible.

The federal government won't certify any marijuana as organic because it remains a Schedule 1 controlled substance, although some independent groups will certify it as grown according to organic principles.

Kalai, the dispensary worker, says he and his colleagues at the Fort Collins, Colorado-based shop Organic Alternatives are careful not to claim the marijuana itself is organic, even if they follow organic practices. "I really believe you can taste the difference," said Kalai, 40. "But the market and the mass consumers aren't there yet. A lot of people turn a blind eye and go with the cheap option."

Andrle, 45, said she believes the industry will ultimately segment in the same way grocery stores offer both organic and conventionally grown produce, and she said she's frustrated that some marijuana growers improperly market themselves as organic when they aren’t, and there's no one to police it.

"You have to allow the consumers to connect the dots," she said. "But there also has to be a way for people to double-check."

This article originally appeared on USA TODAY: As marijuana prices drop, growers push 'organic' cannabis - with a higher price tag