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Why small cannabis growers want to produce the Champagne of pot

The state government of California is currently developing rules that will define whether a geographic area can be deemed a marijuana growing region. For small farmers, who are threatened by industrial competitors and the cost of regulation, survival may depend on customers caring about the specific location and soil in which their cannabis is grown. Economics correspondent Paul Solman reports.

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  • Judy Woodruff:

    Next, we come back to our series the Green Rush.

    Now that adult marijuana use is legal in California, the state government is starting to write new rules to treat marijuana growers someone like winemakers and allow areas to be considered an official growing region. The hope is that, by doing so, it could provide a lifeline for small farmers.

    Business and economics correspondent Paul Solman has the story. It's part of his reporting, Making Sense.

  • Paul Solman:

    In Mendocino county, California, Swami Chaitanya announces his presence…

  • Paul Solman:

    … to Ganesh, Hindu God of, among other things, good luck, who presides over the crop Swami grows to produce Swami Select, his patented marijuana brand.

  • Swami Chaitanya:

    All the potency is in the female plants.

  • Paul Solman:

    So why do you have the males here?

  • Swami Chaitanya:

    Well, because we don't know which is which yet.

  • Paul Solman:

    Oh, is that right?

  • Swami Chaitanya:

    Yes. At a certain point, each plant will declare, what's your gender declaration, right? So, they — and they change from time to time. They do. I'm not kidding you.

  • Paul Solman:

    So cannabis is gender-fluid?

  • Swami Chaitanya:

    Absolutely.

  • Paul Solman:

    California's marijuana market has itself been pretty fluid of late. Swami's been growing for years at his remote ranch. But he went legit, and legalization brought costly regulations and taxes, which his black market colleagues aren't saddled with.

    And new industrial-scale rivals have economies of scale that lower their costs. So how can a small legal grower like Swami possibly compete? Branding.

  • Swami Chaitanya:

    The place you want to be is on the high end, not just quality, but something about your style, something about your story. And you make it a small batch, and you make that your advantage.

  • Paul Solman:

    Niche branding, as with wines and their appellations.

  • Swami Chaitanya:

    So the idea is that the soil that a crop or a product grows in creates something in that product which is unique, and if you grow it anywhere else, it's not going to be the same.

  • Paul Solman:

    French wines are classified by location, grape variety and winemaking practices. Champagne can only come from Champagne. Swami claims to produce the champagne of pot.

  • Swami Chaitanya:

    If you take a bottle of sparkling wine from Spain or anywhere else, and compare it to a Veuve Clicquot or a Dom Perignon, it's going to be different.

    The wine, the product is an expression of the soil it comes out of and the culture and skill of the people who make the product.

  • Paul Solman:

    At Alpenglow Farms in Humboldt County, the cannabis flourishes near waterfalls and flowers.

  • Craig Johnson:

    This is our signature strain. We have bred these over the past 15 years for our site and our location and our climate.

  • Paul Solman:

    This specific environment is what French winemakers, and now California pot growers, call their terroir. Craig Johnson is shooting for a southern Humboldt appellation.

  • Craig Johnson:

    Industrial America is not producing what we produce. You're not seeing rows of greenhouses here. We have regenerative growing practices, which are above and beyond sustainable and organic as you might know it.

    So this is the Internet of the Earth right here, these long fungal strands.

    We have living soils. You peel back that cover crop and there's worms and biology. The checks and balances of nature, we try to keep in tune with.

  • Paul Solman:

    And thus the entire culture of cultivation is what makes his premium products a hit, even his vaping oil.

    And what is that?

  • Craig Johnson:

    So this is extract from our flower, Blood Orange Kush, that was grown here on our big flat. This is extracted by a company called Chemistry. You can think of it as a grape grower-winemaker relationship.

  • Paul Solman:

    I see. And they're the winemaker, Chemistry?

  • Craig Johnson:

    They're the winemaker. We're the grape grower. This is single-source, single-batch.

  • Paul Solman:

    So, it's like a vintage?

  • Craig Johnson:

    Yes, so this would be summer 2018, Southern Humboldt County, Alpenglow Farms.

  • Paul Solman:

    Of course, the business model wholly hinges on consumers caring where their cannabis comes from, and willing to pay up for it.

    Craig and wife Melanie are betting they will.

  • Melanie Johnson:

    There is a strong resurgence for family, family-owned, family farms. People want that experience of knowing where their food comes from, where their medicine comes from.

    And I feel that, as a small farmer, we will always have that niche. We may not have a million people, but we will have enough people.

  • Craig Johnson:

    We have a little bit of cloud cover this morning.

  • Paul Solman:

    In order to find their people, the Johnsons brand-boost every day, on Instagram Live, for instance.

  • Craig Johnson:

    My goodness, I wish you guys could smell that. It's amazing this morning.

    We have people popping up live from Israel, Uruguay, New York. I want them to have an image of this site, this area, and have a…

  • Melanie Johnson:

    A connection.

  • Craig Johnson:

    … a connection to the plant.

  • Paul Solman:

    The Johnsons are, of course, aware of the very different image of where they harvest.

  • Man:

    I have been shot at, beaten, kidnapped three times.

  • Paul Solman:

    On Humboldt County's Murder Mountain.

  • Craig Johnson:

    Which is right over the ridge right there.

  • Paul Solman:

    A Netflix documentary about the murder of a black market grower presents a lawless, violent image that Humboldt farmers are intent on countering.

    Swami, in a prior life William Winans, a '60s Wesleyan grad, filmmaker, San Francisco hippie who spent 10 years in India, has his own angle.

    Is the way you're dressed, the way you look have anything to do with furthering your branding, because it gives an authenticity to Swami Select?

  • Swami Chaitanya:

    So, I was a Swami before I really started getting into growing the finest cannabis, right? But they go hand in hand, because there are many, many swamis in India who start the day with a chillum of hashish.

    And it's seen as a way to get more in touch with the divine energy which surrounds us all over the place.

  • Paul Solman:

    And Swami, who's been toking for more than 50 years, thinks there's getting in touch and getting in touch.

    But don't I have to be an aficionado to be able to tell the difference?

  • Swami Chaitanya:

    That would help.

  • Paul Solman:

    Dylan Mattole thinks an appellation for his Mattole Valley Sungrown is key to his farm's future.

  • Dylan Mattole:

    It's more than just an agricultural commodity to us. It's part of our culture.

  • Paul Solman:

    As to survival against industrial-scale investors, Mattole says wine is just one model.

  • Dylan Mattole:

    We have Budweiser, and we have hundreds of small microbreweries.

  • Paul Solman:

    Some of Mattole's neighbors have formed a cannabis farmer co-op to create some economies of scale.

  • Mariah Gregori:

    Hopefully that we will still have a chance that we can actually compete against corporations. I don't have the money to spend on marketing. I mean, with all these other farms, we have a chance, so we can pool some of our resources, that I might actually be able to do some branding.

  • Drew Barber:

    Just packaging product is very difficult, not only the cost, but the regulations. Working together, each of us can share a piece of that burden.

  • Paul Solman:

    Michael Salbego reminded us that necessity is the mother of invention.

  • Michael Salbego:

    We grow in this sustainable fashion because we couldn't afford to just go out and buy everything in bags and buckets. And we had to use the manure on the land or cultivate things from our own property, because that was what was affordable.

    This is all going to turn into dirt.

  • Paul Solman:

    Like soil made from Amazon boxes.

    You got a bonanza of worms here.

  • Michael Salbego:

    The worms process the paper into a super readily available plant nutrient.

  • Paul Solman:

    So small farmers are selling the step beyond sustainable or organic, regenerative farming. But the market has other ideas.

  • Michael Salbego:

    Now, all of a sudden, what we did naturally was just farming. It's — now it's, how many likes do you have on Instagram? How many pictures have you posted?

    You have got farmers, family farms, that don't know if they're going to make it. We're up against people with pockets that are so deep that they can survive at a loss for the next five years to capture market share.

  • Paul Solman:

    Swami Chaitanya's forecast?

  • Swami Chaitanya:

    Our dedication is to making the finest cannabis that we know how to grow. And how big that gets is not up to me. It's up to the goddess of economics, actually.

  • Paul Solman:

    But if Lakshmi, Hindu goddess of wealth, has made up her mind, she isn't telling anyone for sure just yet.

    For the "PBS NewsHour," this is business and economics correspondent Paul Solman deep in the woods of Northern California.

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