• October 2, 2022

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It’s tough making money by growing apples – global competition has driven prices down to just twenty-five cents a pound and unexpected pests, bad weather, or labor shortages can have severe consequences. That’s why Eddie Brennan of Beak and Skiff Orchards near Syracuse New York jumped in to grab a one-acre cannabis-growing license from the state when they became available. Cannabis will fetch $500 per pound he estimates, which is two thousand times the revenue of a pound of apples.

To diversify the family business over the years, and bring in income outside of the fall harvest, the orchard has added a tasting room, a pick your own apples business, a hard cider distillery, and a summer concert series. Cannabis may finally be the puzzle piece said Brennan, that lets the family farm make it to the 6th generation.

Brennan’s company will join a fast-growing marketplace. According to 2022 MJBiz Factbook, retail cannabis sales in the U.S. are expected to surpass $33 billion by the end of this year.

Beak and Skiff was established in 1911 and is now run by great great grandchildren of the founders, who nurture and harvest an orchard of 300,000 trees. The company is using its cider-making experience to build a 15,000 square foot beverage facility dedicated to THC drinks.

Getting into the business quickly gives the company “a first-mover advantage,” in legal cannabis said Brennan.

The Nascent THC Beverage Industry

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The company will face “headwinds and tailwinds” in the cannabis beverage business said Mitch Baruchowitz co-founder and managing partner of industry investor Merida Capital Holdings. “There’s a model for success” helping to propel the category he said, because “people already use beverages as a social lubricant.” In addition, beverages have an advantage over the popular format of smokable flower said Baruchowitz. “Drinks can be precision-dosed,” so consumers know exactly how much THC, marijuana’s psychoactive ingredient, they are imbibing he said.

Still, there are challenges, Baruchowitz added. Consumption lounge rules have not been established, so there is no public place to drink socially, and dispensaries may not have coolers so a retail infrastructure needs to be created to sell cold drinks.

A Separate Piece

In 2021, New York State legalized cannabis and in May of this year Brennan’s company was one of 100 growers to receive a license to cultivate one acre of cannabis. The family chose to incorporate as Gen 5 Labs and Gen 5 Grow, separating their cannabis endeavors from the apple business. The crop is also being grown on a separate property. “We don’t want to run into any federal issues mixing the two businesses,” said Brennan, because cannabis is illegal at the federal level.

Cannabis grows quickly, maturing to a harvestable flower in eight weeks. Brennan said the company put its first crop in the ground during the first week of June, so there may be a chance to get two crops out of the plot this year. He hopes to get fifteen hundred pounds of cannabis or more from the acre per growing cycle.

Brennan is growing “extraction-grade” cannabis. That means it is bred to contain the highest possible levels of THC, which in turn can be used in making edibles and beverages. Producing cannabis flower the format that gets dried for people to smoke, “is more challenging” in the high-humidity of the northeast summer, said Brennan.

Market Still Under Construction

New York State is aiming to open its first retail stores by the end of 2022 but “not all the puzzle pieces are in place,” said Brennan and regulations need to be created. For example he said, packaging regulations have not been set and ideally “we need to source materials in next few weeks, but we can’t,” until final rules come out.

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