Medical marijuana farm grows with data-driven approach

HARRINGTON — Nestled in the fields of corn stalks that stretch for miles along U.S. Route 13, there’s a family “farm” in Kent County growing a crop Delaware doesn’t frequently seed: marijuana.

The Farm in Harrington, owned by siblings Bill Rohrer and Jennifer Stark and managed by David Rohrer, received a medical marijuana license in December 2020 and is the only Kent County-based operation to date. True to its name, the family business framed production more on cultivation of a plant rather than following the playbook to get maximum tetrahydrocannabinol (THC), the narcotic drug, out of cannabis.

“I know what it takes to grow high-quality, high-yielding plants, and it’s about making sure the recipe is right,” said Bill Rohrer. “People have asked me, ‘Are you really passionate about marijuana?’ No, my passion is really about understanding the plant, watching it grow and understanding its hormones in its natural plant schedule. This plant is so new, there’s challenges that come with it and how it grows.”

The state of pot

After medical marijuana was legalized here in 2011, there were originally only three major players: First State Compassion, a local company with Wilmington and Lewes locations led by retired state trooper Mark Lally; Fresh Cannabis in Newark, run by New Jersey-based Compassionate Care Research Institute; and the multi-state, publicly traded industry giant ColumbiaCare in all three counties.

The Farm has eight grow rooms in Harrington and leases out 9,000 square feet of a farm from a business partner in Frankford. Each grow room can hold up to 200 plants at various life stages. The Kent County operation isn’t limited to growing: there’s a commercial kitchen on site that can produce 3,000 tons of caramels in a single day. Other edibles made in the kitchen range from caramels to brownies and cookies. Another manufacturing lab packages flowers or creates salves, vaporizer cartridges and more.

Miles away in Felton, the family business opened its dispensary, or known in Delaware as a “compassion center,” which offers more than 300 products from 10 to 15 strains of flower in various sizes and styles. The retail site is a former bank, and caters to more than 2,000 registered medical marijuana patients. Customers can either be buzzed in by showing a card to a video camera outside, or order online and pick up through the drive-thru window.

The Farm now has 30 employees in Kent County altogether. This month, a second compassion center in New Castle is expected to open which will bring another 15 jobs to the state.

These days, marijuana is becoming a hot commodity for venture capitalists and shrewd businessmen. Globally, 544 cannabis-related companies attracted $5.3 billion in venture capital between 2014 and 2019, according to a report by CrunchBase, a private and public company data platform. But in Delaware, the market is still relatively young and only offers licenses to those who vertically integrate the process.

“Delaware is a nice little secret when it comes to the big investors who are really putting money into this,” Rohrer added. “They’re looking at larger markets like Pennsylvania and New York, and how it’s structured here gives it more control of how many operators we have. There’s some benefits, because we do hear from our customers how much they love dealing with a local business rather than a multi-state operator.”

Data-driven farming

The Farm can trace its genesis back to, well, farming.

All three siblings grew up on a farm that wasn’t always financially independent. Bill Rohrer became a farmer in his own right, working with the Delaware Department of Agriculture for several years. Eventually, he opened an agronomy lab, studying soil, plant tissue, water, compost and feed.

“We approach agronomy by sticking to the basis of plant growth and making better decisions based on analytical data. It can confirm or guide us to a healthy plant, oprinal yields, and high-quality flowers,” Rohrer said. 

When industrial hemp was legalized through the Agriculture Improvement Act of 2018, Bill Rohrer and his sister saw an opportunity. Stark, who worked as environmental engineer and a professor, had successfully treated her shoulder pain with non-narcotic cannabidiol (CBD) oil. With other farmers in Southern states making serious money off hemp, the siblings decided to jump in.

With a $100,000 state EDGE Grant in hand, they went to work on building an extraction processing facility. With assistance from educators from University of Delaware, they designed and built an extraction system over the course of a year and a half. But with thousands of farmers going all in on hemp, the supply far outstripped the demand for it and they were unsure of the next step. 

That’s when a new round of medical marijuana licenses was opened.

“I believe the state was starting to see there was a need for more cannabis medicine for patients,” Stark said. “We were at a great advantage because we had the infrastructure in place and it’s a similar process. We were ready to start right away.”

Relying on agronomy, The Farm routinely tests tissue and water samples nearly every week to make sure “the girls” – what they call the flowering cannabis plants since they’re all female – are optimized for growth. UD Agriculture Extension professors also helped them make informed choices on natural pest management and disease management.

“We’re making sure that recipe is right,” Rohrer said.

At the Farm’s grow rooms, each one is outfitted with a soaker to give “the girls” water and fertilizer on a timed schedule. Fans circulate air to make sure powdery mildew doesn’t settle, and the air humidifier helps mimic 60-degree humidity. LED lights overhead can change color to intensify the terpenes, which give each plant a distinct aroma and flavor. David Rohrer, who built a career in HVAC, primarily oversees the grow room conditions and maintenance.

Startup struggles

The medical marijuana business may seem glamorous – and flush with green – from the outside, but to Rohrer and Stark, it’s a small startup that faces major obstacles ahead.

While marijuana use has been legalized in about 37 states to some level, distribution and sale of it is still illegal under federal law. Any financial institution that handles money from such a business can open themselves to regulatory risk. The Farm hasn’t been able to find any Delaware bank to work with them, and so it turned to Dama Banking in California.

The SAFE Banking Act, which would protect banks from penalties if they work with cannabis-related businesses within their state’s regulations, has been voted out of the U.S. House of Representatives multiple times. However, it never has made it to the Senate for a vote and was recently removed from the America COMPETES Act of 2022.

While venture capital funds can pour money into the industry, a small manufacturer could struggle to find the funds to keep business running. The Farm’s high-level staff are not taking salaries. At one point, the business operated solely on cash transactions when its bank dropped them as a client.

“You don’t have access to bank loans and you have to rely on private funds,” Stark said. “One of the big misconceptions is that cannabis business owners are making millions – but what they don’t realize is that it takes millions more to keep it operating.”

Another looming concern in the marijuana industry is oversupply, much like what happened with the hemp industry. For example, California has 12,221 marijuana business licenses as of January 2022, with 72% running on provisional licenses. Even then, Golden State farmers grew more marijuana to meet high demand – causing it to crash. Wholesale prices dropped about 28% between July 2021 and July 2022.

“If you look at New York and New Jersey, it looks like they may be going down the same path of oversupplying. And when you oversupply, the demand, quality and pricing just drop,” Rohrer said.

The road ahead

For now, the Farm is enjoying the ingenuity that comes with being a startup in a small state. All edible recipes and formulas were created by the Farm staff, with CBD oil used for the research and development phase and ultimately tweaked for THC. It’s another sign how homegrown the operation is – Stark has heard of gummy recipes being sold for thousands of dollars.

The Farm also developed a line of tinctures, or a mixture of a herbal extract and a liquid to give patients a inhalation-free use option. Specifically, the staff developed options that combine THC and CBD. There’s also gummies with CBD oil and melatonin that can be used as a sleep aid, and the facility launched a new lineup of Coastal CBD to offer more natural remedies.

“Our mission is to improve patients’ lives through superior cannabis-based wellness products from the highest quality of locally grown plants,” Stark said. “We’ve been selling our edibles and other products to the multi-state operators and other medical operators in the state.”

Unlike the wider marijuana community, where consultation can come at roughly $1,000, Rohrer and Stark have found a community here in Delaware that bands together to wholesale solid products. The Farm’s flowers can be spotted at ColumbiaCare and Fresh Dispensary locations.

“There’s some work now on building an association so we can all be on the same page. It’s taken a few years, but the compassion centers are starting to work together. You can really see the evolution of the business, and it’s starting to get where it needs to be,” Rohrer said.