EOS Farms Grows Outdoors In The Northeast, Endures Commodity Pricing And Still Wins

When EOS Farms launched into the Massachusetts cannabis industry more than two years ago they had a beautiful vision, a supportive board of investors, and a differentiated business plan to grow the best outdoor cannabis in the Northeast. Most people assumed that could not be done. The first year’s crop came in light, so when they pulled a full crop of plants with big, beautiful buds out of the ground this past fall, it did not go unnoticed.

Of course this year, it’s a new set of marketplace challenges like inflation and a plummeting price per pound for cannabis across the state. All the same, they’re beating the odds.

Sun & Soil Cannabis

Why grow outdoors in Massachusetts? It’s just better. For one, those indoor grow facilities cost a fortune to build, not to mention they lack a certain character – soul, if you will – in an industry where such deficiencies translate directly into the quality of the final product. In the case of corporate cannabis, indoor grow operations are reliable but produce a flat, featureless product.

EOS Farms sits atop a 100 year old family-owned grange, now a part of the Sun & Soil movement, they support – and depend on – the local farming community. They’re surrounded by apple orchards.

Sun & Soil is not cannabis industry hype, it’s more like a belief system that the properties imbued by the sun and the earth have value.

Speaking with Ryan Montella, Farm Director at EOS, he added some much needed context for me on this front, “Full spectrum sunlight assists in the development of THC, terpenes and flavonoids, leading to higher terps and cannabinoid levels, increased flavor, and enhancing the entourage effect for a more complex and balanced high. The terpene profiles that come from sun-grown [plants] are usually better than one-dimensional, very specific light waves that you get with artificial lighting from an indoor operation.”

Most people speak about marijuana in terms of indica, sativa, and hybrids – a mixture of the two. Indicas are generally preferred for relaxation or sleep. Sativa is more uplifting, energizing. But, as we learn more about the nuanced effects of cannabis, there is a whole other layer to study: terpenes. The industry is beginning to rally around terps, and stray further away from THC percentages or TAC (Total Available Cannabinoids). Many customers still buy on TAC, equating higher THC percentages with higher value. Dialing in the terpene profiles of individual strains is the next frontier for the cannabis industry.

Montella continues, “Hyper-focused conversations around TAC are a symptom of the commodification of cannabis, and perhaps a superficial understanding of the full potential of the plant. When we discuss wine for instance, whether you’re a connoisseur or simply interested in consuming it recreationally, consumers don’t just pick out a bottle based on the total alcohol content. They are purchasing for the vintage, the winemaker, the region; it’s the story, the conditions, the allure of the 2016 California cabernet season.”

The Little Farms Have the Scale

Another benefit of a fully-scaled outdoor grow operation is the ability to offer many strains, which means EOS can offer a wider variety to retailers and consumers while quickly learning what strains will grow best in Massachusetts. For instance, sativas tend to thrive in wetter climates, like the grow cycle of the Northeast, but want to be in the ground longer, which is not ideal.

EOS grew 20 strains this past year and currently offers 14 at retail. Their Ice Cream Cake strain was the top selling pre-roll in the state a week ago.

Or, as Montella puts it, “With outdoor cultivation from seed we can see variation with each cultivar and species and select the most robust phenotypes that thrive in our microclimate. We can clone and breed these at scale and add to our genetic bank, ensuring that future crops will not just have the best characteristics from the sun and soil, but disease resistance that increases yield and reliability of our supply chain to our wholesale clients.”

Commodity cannabis pricing

While inflation continues to soar, and your social feeds fill up with yolks about the price of eggs (ahem), the price of cannabis has plummeted in Massachusetts in recent months. Plummeted to the tune of 40% in 18 months.

As neighboring states like Connecticut and New York welcome the weeds, there is far less traffic at the Massachusetts dispensaries. The outdoor grower is, theoretically, well situated for a price drop, with relatively low costs compared to the big indoor operations.

As demand levels out, so will pricing. More concerning to a player like EOS is the largest of corporate operations that can drive down pricing, and sustain long periods in the red, propped up by financing while the little guys duke it out to make payroll, fair and square.

What seems so odd about this little farm is the position in which it suddenly finds itself: a low cost player, offering a premium product and a wider selection than the well-heeled competition. Strange indeed.

Then again, with the best-selling pre-roll in the state last week, a passionate and finely tuned team, and a growing retail presence, let’s try not to outthink the room.

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