Pueblo, Colorado-based Los Sueños Farms – the state’s largest cannabis grower – now estimates it lost about $7 million in an early October freeze, but the owner said the outdoor harvest was still better than last year, and the company will have ample material for the extraction market.
The Colorado market was initially concerned when news of the freeze broke. Had Los Sueños lost its entire crop, the state’s supply chain would have been disrupted, with retailers and processors likely paying higher prices for flower and raw material for extraction.
But those fears didn’t come to bear.
“It’s actually been great,” Los Sueños owner Bob DeGabrielle said. “We have about 10,000-12,000 pounds of bud that were good quality bud before we got hit with the storm. We’re still going to be 25%-30% ahead of the best year we’ve ever had.”
When Marijuana Business Daily first reported about the storm in October, DeGabrielle hadn’t determined the exact amount of financial loss the company had incurred from the early freeze but noted the farm had harvested about 20,000 of a total of 40,000 plants before eight hours of subfreezing temperatures damaged the crop.
“Matter of fact, the last two months have been the best two months in our history in terms of sales volume,” he said.
Los Sueños didn’t have to reduce its work force or fire anyone because of the storm damage.
Despite nationwide health concerns over vaping, DeGabrielle said the demand for extracted material is still strong in Colorado, and he expected to continue selling thousands of pounds to processors in the coming months.
With about half of Los Sueños’ crop going straight to extraction, processors in the state should anticipate a steady supply of flower that is higher potency and better quality than the usual trim material that would be available had the storm not come early and damaged the plants, according to DeGabrielle.
The early freeze destroyed the leaves that would typically be sold for extraction and made the flower unsaleable for retail store shelves.
Instead, half of Los Sueños’ flower will be used only for extraction material.
That supply of higher-quality biomass will be a boon to extraction companies looking to produce large volumes of concentrates, vape pens and infused products.
With 36 acres in outdoor production, plus an indoor cultivation operation, Los Sueños bills itself as the largest cannabis farm in North America. Denver-based Medicine Man Technologies agreed to purchase the business in June.
“Whatever Los Sueños does absolutely affects the market because they do produce a huge amount of raw plant material,” said Tim Cullen, CEO of Colorado Harvest Company, a Denver-based retailer.
According to DeGabrielle, because the harvest was still better than last year, the storm damage shouldn’t have an impact on the flower supply or wholesale prices.
Los Sueños has about three dozen buyers, several of which purchase around a thousand pounds of cannabis a month apiece.
“Everybody’s business is up,” DeGabrielle said. “The whole concentrate portion is up.”
Despite the U.S. health crisis that rattled the vape industry and led to Colorado regulators banning three additives in vape products, DeGabrielle said none of his big vape customers have been affected.
About 70% of his customers use CO2 as their extraction method and don’t use additives, the other 20% use hydrocarbons such as propane or butane, and the remaining 10% use ethanol.
One key reason the storm didn’t devastate the crop: Nearly half of Los Sueños’ crop had already been harvested and trimmed when it hit.
DeGabrielle’s team was using a machine that trims about 500 pounds an hour, he said. They had eight bucking machines behind the trimmer on a 53-foot trailer, and for 10 days they were processing and putting the flower up to dry before Los Sueños got hammered by the storm.
Bart Schaneman can be reached at [email protected]