The meeting place

The Denver & Rio Grande Railroad founded the small mountain town of Salida, Colorado, in 1880, according to The Salida Museum. Now, Salida — population 5,236 — is a tourist attraction for skiers, hikers and mountain bikers alike. Over the past few years, it’s also become a meeting place for bright minds in the cannabis industry.

After working for several years with AmeriCorps and the United States Forest Service, Long Islander Georgie Craig moved to Salida a decade ago and worked there as a restaurant manager. But then she wanted to begin a new career path, so she earned her Master of Business Administration from the University of Denver. In 2014, a new cannabis business, Pure Greens, came to town. She applied and was offered a job as director of administration. She accepted, excited that this new industry had a place for her.

Pure Greens opened its doors in Salida in 2014, the same year the sale of adult-use cannabis began in the Colorado, says Sterling Stoudenmire, president and CEO of the business. Stoudenmire comes from a finance background and worked for a hedge fund that funded Pure Greens before he joined as an employee in 2014. He says Pure Greens brings a process manufacturing approach to cannabis cultivation. “We do the same things every day at the same times,” he says. “We measure everything, we know our metrics, we know what works, we know what doesn’t. If something doesn’t work, we don’t have a religion about it. We stop doing that and we start doing the thing that does work.”

Craig, who now works as executive vice president, administration, says her job involves tasks that are involved in most any sizable business, including human resources, benefits administration and regulatory compliance — but for her, it’s a lot of regulatory compliance. “We have to harvest plants, we have to plant plants, we have to pay people, we have to do HR, we have to do hiring, we have to do benefits administration,” she says. “[The industry] is not as glamorous, I think, as everybody thinks it is.” But she says it is fun to work in the cannabis space, and given the company’s zero turnover rate in the past two years, many of the people she has hired must feel the same way.

Horticultural hires

Being involved in an industry that is still in its infancy, Pure Greens has improved, in part, by hiring people from other segments of the green industry, Stoudenmire says.

In September 2015, Pure Greens hired Larry Kramer, who works as manager, research and development. As a child, Kramer visited agricultural research stations and helped his neighbor with lettuce breeding. He has an undergraduate degree in mathematics, a master’s degree in plant science and will soon receive his doctorate in plant science from Colorado State University. After receiving his master’s, he worked as a research associate at the University of Massachusetts, performing polymer science, plant science, water testing and more. “When I was at the university and a little before, I was doing research on a bunch of different drug plants — henbane, mescaline-producing cactuses, drug-producing weeds, opium poppy, tobacco,” he says.

Much of Kramer’s work with drug plants has been on the breeding and genetics side, and that has progressed into the job of developing cannabis tissue culture systems for Pure Greens. “We have the ability to do several different kinds of tissue culture systems on campus to produce clean stock, with the goal of being able to do mass multiplication so that we never have to take a cutting again,” he says.

Pure Greens works with a tissue culture bank of about 20 different cannabis strains, or cultivars, Kramer says. One of the challenges of working with cannabis is that nearly every cultivar has different requirements in tissue culture.

While Kramer had worked in greenhouses and plants for decades in research settings, management saw a need for someone with a background in commercial agriculture and cannabis production. Enter Bob Gray, the company’s greenhouse manager since June 2018. “We worked hard to bring [Bob] in,” Kramer says. “We started convincing him that we needed him.”

Gray has a degree in horticulture, and he worked with hydroponic fruits, vegetables and herbs before working at cannabis companies in Minnesota, New York and California and then coming to Pure Greens. Because cannabis is still classified as a Schedule I drug at the federal level, Pure Greens and other cannabis operations can’t call on a federally funded university for extension help, so Gray says his agricultural background has served him well in providing cannabis operations with help in everything from maintaining environmental controls and proper airflow to making fertilizer and pesticide applications.

Gray’s reason for entering the cannabis space was based on principle. “I’m in it because I believe that [cannabis] helps people,” he says. “I’ve had several relatives with ailments or diseases who have had to use it for various reasons and they wouldn’t have otherwise, and I think it really helped them. On that end, I’m really glad to try to just produce clean medicine for people.”

Production and products

Pure Greens is focused on producing the “highest-quality product with the greatest consistency at the lowest price,” Stoudenmire says. This approach is reflected in the daily harvest and trim process in the company’s greenhouses. “If I harvest half a bench this morning at 7 a.m., usually by 10 [a.m.] the plants have been replaced,” he says. “My cycle time is like three hours. We look at a greenhouse as a machine. We want that machine to be operating at full capacity at all times.”

Employees who can handle repetition involved in these processes — even if they don’t have experience in the industry — are a good fit at Pure Greens, Craig says. “People who can keep that engine running and [have] attitude and aptitude, and they have the drive to learn and question and improve the process — that’s definitely a person we’d love to talk to and work with,” she says.

Pure Greens wholesales flower to dispensaries. It also sells consumer products, such as a prepackaged ounce that it sells to a few stores, including Mile High Green Cross, a dispensary in downtown Denver that Pure Greens management, under the name PG Retail I, LLC, took ownership of in 2018, Stoudenmire says. Pure Greens also performs supercritical CO₂ extraction. CO₂ extraction can be performed to create multiple products. In Pure Greens’ case, the company breaks the flower and trim down to a liquid oil that customers can vape through cartridges. One product offering is V3 Oil, which more than 40 dispensaries throughout the state offer.

“We sell in all four corners of the state to other dispensaries,” says Craig, who also handles ERP, distribution and retail. The company aims to expand more into the Original Equipment Manufacturer (OEM) model, which she says would involve white-labeling products such as shelf-ready prepackaged ounces and pre-rolls.

From indoor to greenhouse

In March 2017, Pure Greens moved from its original 20,000-square-foot indoor facility to a greenhouse of the same size, Stoudenmire says. By adopting best practices from ornamental greenhouse production and controlled environment agriculture (CEA), such as growing with the help of natural sunlight and automated environmental control systems, output increased at least three and a half times, and energy costs dropped to about a third of what they were in the indoor grow. Meanwhile, efficiency of power increased six-fold, and the team expanded to one and a half times the size it was prior.

These energy and cost savings harken back to being able to adapt and take measurements — things Stoudenmire says many basement growers have largely ignored while claiming to be the “world’s greatest grower of cannabis.” “The biggest space they ever managed was 10 by 10,” he says. “So, when they were going to scale up, their view of the world was, ‘I need to build a bunch of ten-by-ten rooms because that’s the way I know how to do it.’” However, he says, such an approach doesn’t make sense from a production or financial standpoint.

Pure Greens has succeeded by growing in greenhouses in part because it has made investments in automated technologies that growers use in the ornamental and produce markets, including environmental controls, Stoudenmire says. With the indoor grow, the business’ cultivators spent about half their time dealing with environmental issues, such as microclimates and humidity issues, and now, environmental problems are the exception rather than the norm.

Stoudenmire says an outside observer might think an indoor grow would be more “hermetically sealed” than a greenhouse, but that is not the case unless a grower invests a substantial sum of money into a true cleanroom. Due to Pure Greens’ investments in automation and greater room to operate compared to indoors, pest and disease concerns have been fewer in its greenhouse than they were in the indoor facility.

Much of the success with greenhouse cultivation has been due to the work of cultivation manager Jerry Gold, Stoudenmire says. Gold previously worked as a mechanic at an automotive shop next door but had grown crops at home. Pineapple was one of these crops, and that he was able to grow them in Colorado’s inconstant climate impressed Craig. “He was the guy amongst all the people in our cultivation staff who rose to the top as being the one who was organized, the one who was listening and learning and improving,” Stoudenmire says.

Over the past year-plus Pure Greens has already expanded from its original 20,000 square feet of greenhouse space to 95,000 square feet, separated between “greenhouse one” and “greenhouse two.” Scott Collins, executive vice president of operations, and one of the business’ first hires in 2014, has taken on a general contractor role for construction of greenhouse two.

Learning from horticulture

There are lessons to be learned from the horticulture industry outside of the cannabis subsector, such as specified technology offerings, Gray says. “I think cannabis is constantly, for the extended future here, going to be learning from big ag — best practices on their end and then applying them to our end,” he says.

Other lessons from the larger horticulture industry have included aspects and techniques pertaining to measurements, environmental controls, pest and disease management and lighting, Stoudenmire says.

Pure Greens would have some difficulty being able to adopt certain horticultural technologies at scale, such as some automated equipment, because of its size, Stoudenmire says. “We’re in this very interesting no man’s land,” he says. “When it comes to us as a player in the Colorado market, we’re relatively large. But in terms of commercial hort, we’re very small. A 100,000-square-foot greenhouse is not that big.”

Because of regulations, Pure Greens must operate differently than other businesses in the horticulture space in some ways, Stoudenmire says. For instance, ornamental producers can sell a plant in soil in a pot. “For us, we’re going to cut the plant down, take the soil out of the pot, reuse the pot,” he says. Everything that goes to the dispensary is either harvested, trimmed flower or oil extracted from that flower and trim.

Compliance requirements

Plant disposal requirements, such as having to run stems, leaves and other waste items through a chipper, are just a few of the many regulatory hurdles that exist in Colorado’s cannabis industry. “You can’t streamline certain things because compliance and regulation have to be incorporated into the linear manufacturing process,” Craig says.

Some regulations address labeling, Craig says. The state government, she says, is constantly making updates and changes to the requirements for labeling, especially for extracted product. These requirements include the size of the label, what the grower discloses on it and how it’s printed, Stoudenmire says. Streamlining and scaling these processes to an efficient level, he says, can be a challenge.

Another regulation, Craig says, concerns the change of ownership that is involved in business transactions. When PG Retail I, LLC purchased Mile High Green Cross, it took several months for the Colorado State Marijuana Enforcement Division to approve the transaction. “In a normal business world, you have your contracts between each other — everybody signs the paper, everybody agrees with it,” she says. “In our world, you do that part and then you have to submit all of that to the state, and the state goes through every document, every operating agreement, has to vet all of the new owners. When they give us their blessing is when we’re allowed to take possession of the new business.”

“The regulatory side is just very fluid at all times,” Stoudenmire says. “To us, compliance is job one. We have that on every door in our facility, so we take it very seriously. We try to keep up with everything we possibly can and stay ahead of it and make sure that we are 100-percent compliant at all times. [But] sometimes there’s ambiguity and it makes it hard to do.”

Putting minds together

Pure Greens employs 28 full-time and five part-time employees at its cultivation facility and seven more at its dispensary, Stoudenmire says. “We’ve built an environment where we want people to have careers and we want them to learn and continue to progress and get better over time, and that’s what’s been happening,” he says. “We’re growing and doing different things all the time, and as a result, people have a diversity of options in terms of what their career can be, and we take good care of them.”

Meanwhile, these team members can collaborate on ways to improve Pure Greens and its processes, borrowing lessons about measurement, manufacturing, systems and accountability from some of the world’s most successful companies, Stoudenmire says.

“What we really want to make sure the world understands is, we’re not just another cannabis cultivation facility,” Stoudenmire says. “We’re really on a mission to set the standard for how to do this globally, really, but for sure in the United States. That’s been our big thing for a long time is that we don’t just do things. We always do things to the best of our ability and try to keep raising the bar and set the standard.”