‘Flow Kana is Not Honoring Some of Their Contracts with Farmers,’ Says Letter to the Editor
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To the Editor:
Past Boards of Supervisors here in Mendocino County were giddy with delight when Flow Kana started spreading their cash around in 2016-2020.
I saw Supervisors (also candidates) at Flow Kana events standing around the food wagons and face painting booths, and they were practically peeing on themselves with excitement.
Carmel Angelo led the parade of Flow Kana cheerleaders.
What wasn’t there to cheer about? After all, Flow Kana had tens of millions in shareholder equity — most of it venture capital — and they had Jason Adler’s $145 million in debt.
Then Flow Kana “leaked” internal documents projecting $2 billion in revenue by 2022.
But it was all a lie.
Jason Adler’s strategy of “loan to own” kicked in once Flow Kana missed an installment payment on its debt.
Like iAnthus, Jason Adler now owns Flow Kana…all its properties, all its brands, all its relationships, and all its distribution. And Flow Kana is not honoring some of their contracts with farmers, leaving them destitute in a wholesale business where the margins are already razor thin.
Cushioning Jason Adler loss on his debt was all the shareholder equity. Shareholders got nothing in the hostile takeover.
Jason Adler is brilliant!
Please support farmer owned supply chains. Please support cooperatively owned supply chains.
And remember, 90% of the value of cannabis is created in the supply chain. Farmers get 10%. Just like with any other crop, small independent farmers can’t survive on 10% and get pushed out by big money and agribusiness.
Whether you are buying organic veggies, fruits, and flowers, or buying cannabis, support Farmers Markets!
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Marijuana is extremely easy to grow and relatively cheap to feed and water, even when it’s organic. When all farms sell for an affordable price and don’t expect to make more profits then a cotton or tomato farmer I believe everyone will support small farmers. The greed of small farmers for decades led to outrageous legilazation fees and the take over by big companies that provide affordable product.
Farmers are well known to live dirt poor for the blessing of living and working rurally. If you don’t want to live like a farmer, don’t be one. How many third generation cotton farmers go to Costa Rica every winter? Yall made your bed, now stop complaining that its lumpy.
So true. I recall ” farmers,” being so bloated on mimosas and take out when I was struggling just to survive being a landscaper and student.
Know I’m retired, and they are still driving in traffic and hating their chooses.
High quality cannabis flower is more complicated to produce than most other agricultural products. The cultivation isn’t necessarily where the complexity lies, but the post harvest handling required to make truly excellent cannabis flower is above and beyond anything else I’ve experienced in agriculture.
Growing biomass for extraction is very much like growing any commodity crop at a field scale. But that’s not what this letter is about
That is just silly. I have been growing my own for more than 50 years and there is nothing tricky about it. If done properly, organically grown ANYTHING is less costly than commercially grown…but only when kept to a smaller scale. When you try to grow a solid acre of anything, as opposed to a 20 x 40 garden, problems are inevitable
Of course, any gardener who cares to can grow top quality cannabis for themselves. The same is true of any garden crop. But producing high quality cannabis flowers at a commercial scale is significantly more complicated and involved than just about any other crop
True. Cuban cigars have fewer touchpoints.
That’s actually a good point, high end cigar wrapper tobacco is probably comparable and possibly more complicated.
No farmer I know enjoys living dirt poor for the blessing of working and living rurally.
Pretty stupid comment, huh!
I wouldn’t say it was stupid.
American farmers do pretty well, but they are usually farming a couple hundred or thousand acres of crops with a lot of big tractors. I don’t know where weed farming is going in the future, and I don’t want to try to be Nostradamus but it could very well be mass produced on big farms, processed into oil and consumed by vapor (pens etc) In which case, we are screwed here in the triangle. I have very little expectation that we will become some kind of high end Mecca for weed lovers, like Napa. I don’t see the nearby one day drive market (like Napa has San Francisco). Alright I went far enough off topic for now ✌️
You make great points about the drive time and high end mecca. We’re just fortunate to live here.
Have you ever trimmed a pound of weed?
Growing tomatoes and Cotton don’t require delicate processing.
Do you know the cost of production for tomatos?
The work during and after harvest are time consuming and labor intensive. That brings up the cost.
You could say that is weed growers should get more machines. But crappy weed is not selling right now.
Labor-intensive flower crops such as crocus (saffron), lavender, and fresh flowers still command top-dollar pricing in most markets. Maybe the cannabis market will figure out that hand-trimmed craft flowers are an entirely different product than machine-trimmed mega-grows. Consumer education is probably the key here.
This is where it’s headed for sure. I would look at products like alcohol, tea, coffee, chocolate, and tobacco as likely models for the eventual cannabis market.
The bulk of the market will be industrially produced commodity that is primarily shuffled into a wide range of products while there is still a tiny luxury market where the original agricultural products fetch many many times the price of the commodity stuff
“Legal” farmers cannot sell their product at an affordable price BECAUSE of the laws and regulations that tax and “fee” them with a ridiculous series of hoops inflicted on no other agricultural product.
Bingo!!! Most regulated ag crop hands done and by a long shot. Expenses are orders of magnitude more than tomatoes.
I’m. Sure you have grown your share of marijuana gardens right? Probably not. It’s not that easy to grow and maintain a garden especially depending where you live at. It’s the people who grow in the masses that actually do none of the grunt work but pay someone else to do it that should be tax d the hell out of.
💡 Hit the nail on the head
I’m pretty sure the owners of wineries go on lots of vacations
Also in most civilized countries everyone takes a vacation the research shows it makes for a more productive economy
Dude! “Farmers are well known to live dirt poor for the blessing of living and working rurally” GTF Outa here! No. Farmers live in San Luis Obispo, And fly out to Fresno bro. Look up Stuart and Linda Resnick: farmers. Devin Nunes: farmer. Gavin Newsome: farmer. The last California “farmer” from outside of Humboldt I met was in Alaska skiing, and owned his own helicopter, but only had 30 hrs. of training, and was maybe 30 years old. I mean seriously. Look up what a combine costs now. But still, that is the culture that is chasing weed now…along with us old pros. Everybody expanded. Who’s fault is it really?
I agree with most of the statements except the value distribution. Cultivators have had the lions share up until this current market. Even now, those that are growing a quality product with direct brand contracts are earning 50 -100%. Retailers run neck and neck. The middle of the supply chain will only achieve profitability in their efforts to vertically integrate. Currently their margins are 10% at best. And that is a stretch. The structure in the supply chain does not allow middle operators to charge what is needed to function as it moves through the supply chain. Vertical, with all of its complexities is the only path to positive revenue. Once the glut of small producers are eliminated and large organizations can consolidate the margins will finally see stability in the supply chain. Hopefully for the sake of the market, this happens sooner than later.
Like everything else. Take the revenue away from. Alot of people. And give it to a few. There was once many mills in mendo humbolt. Now a few. Big crab boats are pushing small ones out. How many small vintners are out becus of gallo. The rich bribe the law makers to change the rules to crush small buisness. Look at trucking. You need only one. Or a fleet. To make money. Now they even use the guise of covid…. Its ok to go to wal mart. But not a small cafe? A farmer wdnt herd all his sick cows thru the same gate. But politicians will
Small farms need to band together for economies of scale and go vertical. They need to contribute to campaigns and hire lobbyists. Acting like they can operate as they have for the past few years to decades will seal their fate. They need to think big or go home.
The person I supported to protect me as a grower excused herself from the process. So much for that.
Not sure what you mean by support or protect, but I’ve found that you can’t trust anyone and never place yourself in a vulnerable position if that person leaves or screws up. Good contracts, level head judgement and a good law firm will help. I don’t trust my attorneys either. Always doubt check their work and never ask them to guide you, you need to tell them what to do for you. You’ll always have to know more than the person you hire and/or learn the missing parts from them along the way. Just letting someone do their work without strong oversight and accountability is dangerous.
I was referring the Supervisor Bushnell…We voted for her to represent us with our unique issues but sadly, she recused herself from extremely important cannabis issues. I don’t have much use for attorneys.
Yeah, it’s weird because we have supervisor brown who has his fppc letter allowing him to vote on cannabis issues that don’t singularly affect his farm. He’s got a 10k cult license. He’s voted on cannabis PEIR, ordinance changes, BOS appeals, and even a refund of license fees.
When you’re involved in a industry that is wide spread in the jurisdiction, FPPC will allow a person to vote on matters pertaining to the industry so long as it does not just benefit them. Why bushnell ran for office I can’t say. Did she seek a fppc letter? Seems like bait and switch that she recuses now. Sorry to hear that. I’d suggest a recall and get someone stronger in there.
That’s the game plan…
The FPPC is just a shakedown scam. Another good idea that gets corrupted with petty assholes on a power trip. (Good training for weed legalization!)
Filing error? Send us 200 bucks to make this go away or go before an administrative judge far away to avoid thousands of dollars of fines threats…
I’m not gonna disagree with this, but their letters are the golden ticket to various political activities to the best of my knowledge. Trinity supe Brown has his and he votes regularly on cannabis issues. Why doesn’t bushnell??
I agree with your point that vertical is the only path. However, that is next to impossible in California due to cost and regulations. How can you in good conscience argue that salvation lies in large companies that will gobble up the small farms? I think that is a path towards mediocrity.
Corporations care about the customer. Small pot farmers only care about themselves. That’s the fundamental difference. It has to go this direction to put the customer first.
Corporations care about the customer? You’re kidding, right?
for sure. just a joke.
Haha I guess you’ve never talked to direct tv or sirus xm. Worst customer service off all time in my book. As for small farms, sounds like you stereo type them and yes some are self serving just like all other industries. This is just a function of human nature, not “pot” (cannabis) farms.
And they have both completely lost market share. Dinosaurs. Their customer base have moved on to better products and services. Streaming as an example. Get with the times old man. Lol. And yes. I have never heard a pot farmer on this thread ever talk about a customer. Is always oh poor me and what about me! It’s like they do not understand how a supply chain works.
Direct and sirus were simply out evolved by better technology not better customer service. Streaming is much easier, but if you need to watch or listen to live sports on the road you still need these services. Satellites are super expensive and it’s not an easy model to fully replace.
As for farmers with their self serving comments. I do hope you know that the vast majority of the good farmers are not on here posting. Not even close so your sample if insufficient. Besides even the good ones still complain on here that’s just human nature. Please don’t judge everyone based on a few people who anonymously post here. It’s simply not reality.
How much is the custi paying at your verticali retail spots?
I care about my product so it will sell and I can earn a living.
Your assertion is not valid in the twenty first century and I’m not sure if it was ever really true. Once small businesses began to become regional and then national and multinational companies the businesses no longer valued individual customers. Corporations do not care about customers, workers, or anyone or anything besides profits and shareholders. You’re clearly not in the game. In fact I think I remember you comparing the wine industry to the herb. That is an inaccurate comparison at best and I’d say it is a misinformed opinion and comparison. I”ll even go one step further and assert you don’t know what you are talking about and you try to oversimplify a situation that is complex and nuanced.
It is all about happy customers for the majority of small farmers. The best farmers try to balance scale with quality and that’s a moving target. Large scale farms are just growing biomass and they don’t care about the customers or the middle men or the workers or the environmental impacts of their sites. This is true in so many industries. There is no true CORPORATE ACCOUNTABILITY! This is why people operate LLCs. The corporate entity limits the individual’s liability. For an individual who runs a small farm it is absolute accountability. There are no bailouts, no fundraising IPOs. Of course they think about themselves, what planet are you on? I’m on the one inhabited by humans. I case you haven’t noticed it’s every human for themselves.
Profits & Shareholders equate to customers. Corporations have to care about money because customers convert to money. If customer retention is high, money is good. If customer retention is low, money is bad. This translates through to shareholder confidence and share value. I’m the one who doesn’t understand how any of this works?  Listen to yourself. You’re only validating my original comment. And yes, there are plenty of commodity industry’s to model against your industry. Weed and the function of your supply chain is not unique, nor innovative. Maybe that’s why you guys are getting your lunch eaten by newbies in your space. This isn’t rocket science and there are plenty of comparable commodity industry to model after. And again, you don’t understand your customer or the industry you’re apart of. And to your ending point – all of those options are available. What you’re actually saying is YOU do not understand how to pursue any of them. That is fine. Just be honest. Being a victim and blaming others will not fix the inevitable fate of you going out of business. That will be due to your own complacency. Take action and do what the top 1% have to do to succeed through adverse conditions. Best of luck to you.
//Maybe that’s why you guys are getting your lunch eaten by newbies in your space.//
80% of the industry is dominated by the black market. Who is eating whom’s lunch. Nom, nom, nom, lol
//If customer retention is low, money is bad. This translates through to shareholder confidence and share value.//
You mean like all the Cannabis stocks which look similar to this chart. This one in particular I enjoy its wallstreeters wannabe’s who own SISU. Downward trend all red, lol. Nom, nom, nom!!
Oh so the solution is to follow the top 1% and raise VC capital? No thanks. I tried to go white market, back to black. The state and the counties are vampires and Trinity county didn’t even renew most permits last year. Try paying for square footage for your vineyards and then tell me how the two industries compare.
Corporations have a fiduciary responsibility to generate profits for their SHAREHOLDERS at all costs, including but not limited to EXPLOITING thier customers and the environment they depend on for long term gain.
You’re trying to get in the weed industry and you hate growers! Ha! Fuckin BUYER.
Why? That sucks for everybody but your big operators. One of the cool things about weed growing was it’s egalitarian years. “Hopefully for the sake of the market.”? What? Your consolidated vertically integrated venture capitalists feeling a thinning profit margin? Hopefully for the sake of the market you all get the FO.
So a shady company behaves in a shady manner? Will wonders ever cease?
If only someone could have anticipated this and warned… …oh.
98% of cannabis companies are run by greedy narcissists who will rip off their workers, farmers, investors, and partners.
You mean 98% of all business.
The point still stands.
Word, Sonoma was the worst when I was in the shame game. Know I’m retired and there still working off the excess calories.
Not spot on. That’s a purely fictional statistic. I can’t believe you’d think it’s anything other.
72% of all statistics are mad up.
I heard 86%
Probably closer to 100%. All data can be manipulated.
They have stiffed growers here in HumCo also. They are buying large farms in Mendo and Lake Counties so they can go from being the “partner of small farmers” to being vertically integrated RJ Reynolds wannabe’s. I am ashamed to wear my FK sweatshirt around in public. I use it for cutting firewood and working on the car.
You can use the shirt for stirring and liming the outhouse.
$2 billion! That’s a shit ton of money… legal sales in in 2020 for California was $4.4 billion. The last estimate I heard 10 or 15 years ago was total cannabis revenue for California was $20 billion.
Somebody is puffing tough while making up numbers.
Yea saw plenty and of it the past 6 years. Business plans where guys we’re gonna pull 5 dep rounds on the coast and 4 here in the trinity mountains. One group in dinsmore planned a mega watt generator for their facility that had every license type on the parcel. Haha they never got past CDFW once it was flagged for being in the floodplain.
Literal pipe dreams.
Oh so true!
You’re equating revenue with corporate value.
No, I’m equating revenue with revenue. The letter says revenue and all my numbers are revenue.
If I didn’t have to hold the bong hits in to long was I was a youngster ,I’d be as smart as you. Youngsters treat your body good…
Investor greed (primarily small investor greed) fuels this nonsense. It is their money that allows these ‘story’ companies to sell stories and not product.
The business model of a ‘story’ company is to find a hot market (real or fake) and feed the media to amp up the story. The media companies love the hype because it sell clicks and thus you have a nasty feedback loop which screams louder and louder. The small investor falls for the crap and without proper due diligence cumulatively hands out money to these companies like candy.
Of course story companies use this money to create even bigger stories and soon the ignorant small investor feels that if they don’t get involved they will miss out and it blows up like cannabis stocks in 2016-18.
The business model sucks for all but the savvy assholes who structure the deals and suck the funds out of the little folks.
The answer? Don’t be a dumbass. Don’t invest in shit you don’t understand. It’s not the investment you don’t make that breaks you — it’s the ones you make carelessly out of greed.
Part of sound investment is to understand that most humans stick when there is money to be made. It’s your JOB as an investor to vet the shit out of anyone you give your money to. If you don’t/didn’t, expect to pay the price.
Absolutely, great advice: don’t invest in things you don’t full understand.
Dude hey, I vote you have a weekly article on sound investing through the sink or swim platform, the acorn app and let’s empower the people so they can retire with sum assets. I learned the hard way, and it was is a struggle, however recently my first 2 stack pay day. Learn to invest, save, and live extra simple.
I vote we ask JB if he would consider a mentorship or knowledge sharing group because he throws down in the comments like just about no one else. Can’t imagine what I could learn from a full length conversation.
I agree and iff’in he loses his ass to legality or fire he’s more than welcome to make a home fer his family on any of our properties, anytime. Even cut em out a nice piece of land to grow, not legal, of course, lol.
I’d vote to have you lead a group as well. You’re the other guy with huge knowledge drops. The two of you could easily provide the best cannabis business mastermind depending on the legal status.
We should do a cannabis podcast together. LOL
Y’all are too kind. Everyone has their own set of valuable knowledge (and unique view) and I appreciate those who share.
I love this industry and like many here have paid my dues. If I can help someone I’ll do my best.
Why do you think they call it dope?
A friend with weed is a friend indeed!
There’s hope with dope!
Ass, Grass or Gas. No one rides for free.
but…but…they gave us free hot dogs
No such thing as a free lunch
Mikey got what he deserves, and so do all the fools that willingly boarded his ship! LMFAO!!
Wow all these “experts”! LMFAO
Does this surprise anyone? In the days in the Hills many times product would be taken with no cash returned. Or the oh the price point went down, skimming thousands off a box. How about the shining example of all…they didn’t like your product didn’t take it oh, you open up your boxes and it’s not the same stuff you sent out . Or every pound 28 to 34 Grams short when you reweighed them after return, stealing close to 8# for their own profit. The reply oh we had to check them all, when you weighed them carefully and the same 10 Grams over in the first place. Never FRONT your product. Remember you can not pay bills on air and a prayer! Seen it all out there.
Damn straight! For some reason people think that everything will be on the up and up if the other person is an LLC with a contract.
skimming 1000s while already taking more than a point per. “brokers” gonna keep ya broke.
I am shocked to hear a corporate cannabis company is not working with impeccable ethics. What has the world come to?? Next thing you are going to tell me that there are law enforcement officials robbing mom and pop farmers.
I hate to say it, but this is how capital raises and our capitalist economy work right now. You point out 4 years of spreading cash around, which the County has never been able to legally receive from traditional grows in the past– of course they would jump at the opportunity to finally receive legal funds related to cannabis farming in this County. What are you saying, shame on them for getting excited about money or because they were lied to, or things didn’t turn out the way they “expected” in an entirely new (still Federally illegal) economy? Seems like you are just being critical of the County being “cheerleaders” for legalization and hoping for economic influx of cash in an otherwise extremely economically depressed area. This is all pretty normal dynamics across America for capitalist sharks to come in and exploit the poor, especially in a new industry, right?
Remember, a lot of farmers were also cheerleaders for the new market too. Then legislation passed, fees and paths to licensure became a reality, it was a surprise that legal and illicit market pricing was different, and now that sentiment of support for the new industry has since changed. Yes things change, but it’s not the responsibility of one company or the County to have a crystal ball and figure out the end game of a new industry up front. Everyone did their own research and made their own decisions.
The entire promise of a new industry has changed statewide, it’s not unique to one company or Mendocino County. Exactly like you said, if you don’t like the new cannabis economy, don’t shop in a dispensary and support your local supply chain. The only way we have to fight back is where we put our dollars. If you don’t want to participate in the legal cannabis economy, you don’t have to.
Can you imagine if nobody sold any wholesale weed for a week? Kept the gate locked on the white vans? Would never happen, but fun to think about. Growers could demonstrate what “gouging” might actually look like..(but actually, weed is a luxury crop people can do without. So price gouging is never really a factor like with petroleum now)
Um does this come as any surprise? If so you don’t know Jack about flow.
These cowards tucked tail and jumped ship in sohum, leaving pretty much every woman I know jobless and to top it off they didn’t even pay the workers what was owed.
I don’t even know where they are now but they used to have a sizeable operation here and gave all the girls a week notice after promising to keep the local plant in operation.