Flow Kana is one of the largest cannabis companies in California, but it doesn’t grow any of its own weed – INSIDER

  • Flow Kana is a California-based cannabis company that distributes sungrown, sustainable cannabis from craft farmers in the Emerald Triangle region.
  • The company acts as a „weed middleman” between small weed farmers and dispensaries in an attempt to preserve the Emerald Triangle’s legacy.
  • Up to 80% of the US’ illegal marijuana comes from the Emerald Triangle.
  • What was once a criminal drug, marijuana has evolved into a dynamic, multibillion-dollar industry. This „green rush” of legal marijuana has birthed public cannabis companies that pose a risk in wiping out small, independent marijuana farmers.
  • Visit Business Insider’s homepage for more stories.

Following is a transcript of the video.

Flow Kana is a cannabis company that doesn’t grow any cannabis.

Instead, it set itself up as a sort of „weed middleman” between 200 small farms and California dispensaries. And it could mean the difference between preserving a decades-old local industry or watching it give way to Big Cannabis.

Mikey Steinmetz: We are, very simply, a supply chain company that basically helps aggregate, grades, sorts, processes, all of the small-farm cannabis in the Emerald Triangle and a centralizes everything postharvest.

Narrator: With its core farmers, this means they buy 100% of their crop outright and find an avenue to market for all of it – from top shelf flower to shake. The Emerald Triangle is a region in northern California made up of Humboldt, Mendocino, and Trinity Counties – often referred to as the „Napa Valley” of weed.

One of the first farms Flow Kana started working with is in Humbolt, called Huckleberry Hill Farms. Johnny Casali, the farm’s second generation owner, grew up in the Emerald Triangle’s illegal industry. At 22 he got busted for growing 1500 marijuana plants on his family’s property. He spent 8 years in federal prison.

Johnny Casali: I started growing in 1978. I was 10 years old. My mom gave me my first 10 plants to grow by myself when I was 15 years old. And from then on out I fell in love with it.

Narrator: In 2016, he met Mikey and started the permitting process in order to start selling legally with Flow Kana.

Casali: It takes all my time to grow even a 5,000-square-foot cannabis farm, which this is, so I don’t have time to package my product. I don’t have time to distribute my product. I don’t really have time to trim my product. So it’s really necessary for most of the small farmers in the Emerald Triangle to have a partnership.

Steinmetz: Our business model is a hundred percent dependent on the success of our farmers.

Narrator: Flow Kana only sells sungrown weed only from the Emerald Triangle. But during prohibition the area was subject to blackhawk helicopter raids, military convoys, and armed stings for the same reasons it’s being praised now.

By some estimates, the Emerald Triangle grows about 6080% of the nation’s illicit weed.

The War on Drugs has died down since Ronald Reagan declared it in ’71, but growers who choose not to participate in the legal market are still at risk of fines and prison time. But the risk can be worth it for small farmers who can’t compete with big players in the legal market.

Steinmetz: I think when I first came to California first kind of exploring cannabis, I was just amazed and inspired by this ecosystem of more than 53,000 cannabis farmers.

Narrator: But even for the region’s legal farmers, not only is there still the very real threat of federal prosecution, companies are now swooping in to make a profit from the once off the grid farmers. Layer that on top of the last 50 years, and you’ve got some serious distrust of anyone outside of their tight knit community.

Steinmetz: Just like the Gold Rush and people coming to California and exploiting it, you know, a lot of people have been going to the Emerald Triangle and just taking and taking and taking.”

With Flow Kana, Mikey Steinmetz is trying to do things that are good for people and business, like providing loans, to help build goodwill.

Steinmetz: Initially, you know, I had met all of our farmers and I had visited every single one of those farms, and obviously that that model doesn’t scale.

He now relies on a large farmer relations team and, even more so, the farmers he did get to know personally, like Johnny, to convince reluctant growers to work with Flow Kana.

Casali: When I returned back from jail, there was 50 people here waiting for me to help me get my life back in order, it’s taken on a responsibility for me to not only bring myself to be a permitted farm, but also to help assist these people that are scared to come into the legal light.

Like a lot of large cannabis companies, the future of Flow Kana will depend on federal legalization.

Steinmetz: There’s other states that have a lot of small farmers, like Oregon and Washington, where our model can be successful. I’m going to be looking closely over this next year, and kind of towards the end kind of start thinking about, hey, is federal legalization really close on the horizon? And if the answer is yes, we’ll double down in infrastructure here at the answer is no, then we’ll start looking at other states.

Narrator: The opportunity for national growth isn’t limitless though. Flow Kana’s business model can’t exist just anywhere, and Mikey doesn’t actually want it to.

Steinmetz: I think we’re not interested at all in going to, like, a state that doesn’t have cannabis history or are really, is not going to be growing cannabis in the future and, like, setting up. Makes no sense when I believe the future is here in California.

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