Pubdate: Tue, 02 Apr 2013
Source: Globe and Mail (Canada)
Copyright: 2013 The Globe and Mail Company
Contact:  http://www.theglobeandmail.com/
Details: http://www.mapinc.org/media/168
Author: Keven Drews

BUSINESS BOOMS THANKS TO MARIJUANA LEGALIZATION IN TWO U.S. STATES

Sales: Success Likely To Attract Big Companies

Business has been smokin' at one hydroponics shop and warehouse in
Surrey, B.C., ever since two U.S. states legalized the possession of
marijuana through ballot initiatives last November.

On any given day, courier vans and transport trucks join a steady
stream of walk-in customers at Pacific Northwest Garden Supply and
Green Planet Wholesale Ltd., ready to pick up or purchase hydroponics
equipment and nutrients to grow medical marijuana and organic food
products.

Sales have quadrupled in the last three weeks alone, and the
multi-million-dollar businesses now employ about 60 people, including
three new members of a sales team.

The owners of two companies even have plans to open a new distribution
facility in Washington state, somewhere near Bellingham or Seattle, in
the next 90 days.

"I say a good portion of [the growth] would be the initiatives that
have taken place," said co-owner Steven Betts, who says he's been
involved in the hydroponics industry for about 20 years.

"I think there's been more of a social acceptance of that for, you
know, medical benefit. So people are kind of getting over the social
stigma of it, and they're jumping into it. Plus, there really is a big
movement towards just general home gardening."

The companies' other owner Justin Cooper said the hydroponic business
has "come out of the shadows" in the last five to 10 years because
people are also accepting it as a better way of growing healthier plants.

The ballot initiatives behind the business boom were approved in
Washington state and Colorado on Nov. 6, 2012, and allow adults over
the age of 21 to posses up to an 28 grams of marijuana.

In Colorado, users can also grow up to six marijuana plants in a
private, secure area, although under U.S. federal law the plant still
remains illegal.

Betts said about 40 per cent of their success now takes place in the
U.S., and products are distributed through centres located in
California, Colorado and Michigan.

But the headquarters for the companies' retail, wholesale and
manufacturing operations remain in a 1,980 square-metre warehouse in
Surrey.

Inside is equipment to purify water for plant nutrients through a
reverse-osmosis process, bottling and labelling machinery, as well as
shelves stocked with artificial-lighting and ventilation systems,
growing structures and tents, air conditioning units, non-toxic
pesticides, and plant nutrients.

Hanging near the checkout counter is a giant yellow sign, warning
customers that they'll be asked to leave if they mention any "illegal
substances."

"We've never been about doing things illegally," said Betts. "We're
not martyrs. We don't try to be radicals or rebels. We're really about
how to garden and how to garden efficiently."

Tucked into a back isle is a digital camera and green screen, the
nerve centre for the companies' social-media marketing efforts meant
to woo customers via Twitter, Facebook and a newly launched website.

The connection allow customers to link to online tutorials and videos
about gardening and growing when they scan matrix barcodes, known as
QR codes, with their cellular phones, said Cooper.

In an effort to connect with the community, the companies' employees
have also spoken to school children about organic gardening.

Lee Bryant, owner of Great Lakes Garden Wholesale, the Michigan-based
U.S. distributor of Green Planet products, said most of the customers
who are buying the products in his state are doing so with a medical
card for marijuana.

In Michigan, he said, the state allows individuals to obtain a medical
card that allows them to grow marijuana for themselves or for other
patients as a caregiver.

Bryant credits Green Planet's success on its use of high-quality
products, like reverse-osmosis water and raw nutrients, and its
decision not to use plant-growth regulators, which may grow larger
plants but are harmful to the health of consumers.

"We got the product in and it's done phenomenally," he said. "I mean
we have absolutely changed the market in Michigan and now in quite a
few other states in the U.S. that have become big supporters of the
product."

Because of that success, one university academic is questioning how
long it will be before other, larger companies get into the game, too.

Stephen Easton, professor of economic at Simon Fraser University in
Burnaby, B.C., and a senior fellow at the Fraser Institute, said
whenever there's a big margin of opportunity in business, others begin
looking.

"You've got to believe that somebody else is going to move in, too,"
said Easton. "You think that Wal-Mart's not going to notice or Home
Depot?"

Easton said he's not surprised Americans are drawing resources from a
Canadian company.

"Obviously, they have some expertise," he said, adding social
attitudes towards marijuana have changed, although the laws in Canada
have not.

"The olden days, where it was sort of demon marijuana, you know, turn
you into a slavering fiend, right, you know, dope fiend, I think a
large part of society is past that, but the laws are sufficiently slow
in reacting," he said.

But with the company being responsible for feeding 60 families, Cooper
and Betts said they're already looking at the companies' future growth.

Cooper said while a portion of the company's business is focused on
medical marijuana, its long-term vision is food production, giving
people the ability to grow healthier, more environmentally friendly,
more sustainable crops.

"We've got to stay ahead of the curve," said Cooper. "Everything we do
is always, 'How can we make this better.' That's one of the things we
say all the time. 'What is it going to take to make this type of
product better than what currently is on the market.'"
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MAP posted-by: Jo-D