The a2view interview, November 19, 2020
Pott Farms makes CBD (cannabidiol) products from hemp grown on Robbin Potts’ farm on Bemis Road. It is the first foray into business for Pott (the name is just a coincidence), an attorney who worked for twenty years in child advocacy and public policy research.
Pott says she chose to make Pott Farms a low-profit limited liability company (L3C) because its primary mission is charitable rather than profit-driven. Being an L3C also opens up the possibility of grant funding. Her experience as a child advocate taught her that families suffering from the multifaceted effects of generational poverty and systemic racism need job training and supportive work environments to succeed. Her goal for Pott Farms is three fold: to create CBD products with tangible health benefits, to offer good livelihoods and training in cannabis farming and processing, and to restore soil health and biodiversity on her farm.
She spoke to a2view editor Trilby MacDonald by phone in September.
TM: How is Pott Farms funded?
RP: The company is largely funded by me but we have twelve other partners who are local and mission-minded and they have invested financial and work resources. My phase now as a business owner is the sales and revenue. I’ve always been grant funded to generate positive outcomes for programs and people. We are increasingly earning revenue and are on track with the original business plan, a three year pilot phase before scaling up. We are in year two of that phase. We are building the company deliberately and putting the pieces together to get it right on a small scale so that we can move to profit quickly. We are projected to reach our breakeven point at the end of 2021.
TM: How has the pandemic affected the business?
RP: It forced us to become an exclusively online company. We thought we’d be selling in person at farmers markets and through education. We had to build a website and apply to banks that handle online CBD sales. It was a much bigger deal than we thought. Most web platforms are not willing to work with us but there are a few – Shopify and Square. We launched in June. Covid has also affected product development. We are an intentionally small batch company and intended to develop products in a commercial kitchen in April but we had to delay. Everything has been delayed by two or three months. The company had plenty of other things to do, and being on the farm is naturally socially distanced. We now work out of Rosie’s Community Kitchen in Ypsilanti.
TM: Have you started hiring people yet?
RP: Not yet but as we build our systems we are keeping the training in mind. Right now the partners are the only people who work for the company. We anticipate hiring temporary labor for specific work this winter.
TM: How much do you anticipate paying your workers?
RP: Fifteen dollars an hour is what you would expect, twenty is not outlandish. We want to set a standard and put salary pressure on our competition. I see the cannabis industry being built differently. We keep prices down by building everything ourselves. We don’t buy inputs. Most of the industry is being grown indoors, which is very expensive. Lots of inputs – electricity, pest control, etc. If those high input systems set the costs for profits we can match those prices and do it for a lot lower cost. We aren’t trying to grind out huge quantities of flowers.
There is a rise of the ethical consumer and that is going to be what drives the cannabis industry. Cannabis consumers tend to be more mindful and aware of what they are consuming and are looking for responsibly made flowers maybe more so than other industries. We hope they will drive the development of a responsible industry. If we keep going the way the industry is in terms of high input and waste, times up on that for our planet. The way this industry is going, it’s set to reverse positive trends of carbon reduction. I spoke at the Michigan Cannabis Association meeting on social equity which went over well but the environmental piece wasn’t landing because those growers are all indoors.
TM: Are you still working in law or in any other capacity outside of Pott Farms?
RP: No, I am full-time with the company. We are still really small and I wear many hats. I have another business, as well as securities attorneys, that I consult with but I handle regulatory compliance, contracting, and leasing. So I don’t hire lawyers which saves our financial resources. We don’t have a marijuana license, that is still federally illegal (Pott plans to get one down the road.) We have a license to process and sell hemp. There is a huge gray area between it becoming legal and it becoming regulated. The FDA (Food and Drug Administration) hasn’t come up with regulations. Until those rules are finalized in place, this is a pseudo legal business. If companies violate anticipated regulations, but if you are truthful and transparent, they are allowing the market to grow. I get updates every day. We are only selling CBD, but banking and online sales are still a challenge.