Cultivating Clean Cannabis + Why it Matters | An Interview With The CEO of Aster Farms
We sat down with Julia Jacobson, the CEO of Aster Farms in her hotel room in Austin, TX. She was at SXSW speaking on a panel called, “Cannabis Brands and Investments”. We love what they’re doing at Aster Farms in terms of providing clean, quality cannabis to the industry and wanted to learn a little bit more about Julia, her company, and what she spoke about at SXSW.
Tell us a little bit about your journey through entrepreneurship and how you ended up in the cannabis world?
I started my career as a buyer for Bloomingdale’s. I am a nerd number cruncher and I also really like clothing. So it was a perfect first job. While I was in the fashion industry I realized there was a hole in the market for how new digital influencers and advertising was happening and connecting those dots to retail stores like Bloomingdale’s. So I left and decided to start my own startup.
I connected up with a developer and pulled together a small team and we ran what we call the ‘SquareSpace’ of affiliate marketing (the name of the company was In Market) for about five and a half years. That was my first launch into what it means to be a CEO, what it means to run a company, and what it means to start from zero and build something to a real company. We went through the TechStars program right here in Austin, Texas. After In Market ran for about five and a half years, we sold it to XO Group.
That was in 2016. I worked for XO for about a year. Sam and I had already started the little pieces of Aster Farms from far away, setting up the entities, creating some branding, figuring out where and how we want to be in this industry. But by 2016 we knew we wanted to be in cannabis. So we founded the company in 2016 with our own money, sweat, and energy. And here we are today. Sam and I are both full time.
How long have you been growing cannabis?
This was the first year that I have personally been involved in growing cannabis and really growing any agricultural products at all. I come more from the business side of the industry. We partnered with a family friend of Sam’s, who’s my husband and business partner. Noah studied sustainable agriculture at Bard started growing microgreens in the Berkshires and then 15 years ago moved to Northern California and has been cultivating cannabis since then. We knew him as a safe, professional person in our life who we could trust which is the biggest piece of this industry especially when you start out and start building a team.
Noah is just an unbelievable grower. He’s our director of cultivation. For our first harvest in 2017, Sam and I were not involved. Didn’t even touch the soil with my hands, but this last year we were part of every step of it from putting the plants into the ground to coming and helping throughout the process fertilizing and harvesting.
One of the things we love about your company’s mission is that you grow really clean cannabis with clean genetics, clean cultivation methods, etc. I wanted to learn a little bit more about why it’s important to you?
This was actually one of the reasons that we started Aster Farms. Sam and I were starting to use cannabis medicinally and in the topical space there was Papa and Barkley, there were a couple of brands that had beautiful design. Their products didn’t smell like weed. All of it was a premium consumer experience. We didn’t see that as much in the flower space which is interesting because flower in itself is so pure. There should be a brand behind it that has those ideals as well.
For the most part, there was either the Hermes of cannabis flower or a bottle that says like Kush-tastic 420, with marijuana leaves all over it. We didn’t see the in between. Sam and I are both conscious consumers. We shop at Whole Foods. We use Mrs. Myers cleaning products. We drink Tito’s vodka. So there’s definitely that kind of demographic that we see and that’s who our user is: somebody who is conscious, engaged, educated, and cares about what’s in their weed. We believe our thesis is that as soon as the novelty of legal cannabis wears off people are going to care about what’s in their weed as much as they care about what’s in their water, what’s in their food, what’s in the products they’re putting on their skin. So that is hugely important to us just kind of as the basis for why we even started this brand.
Going hand in hand with that is growing organic product. We can’t call it organic because that is through the FDA. So it’s illegal. But we do grow organically and we have something called “Clean Green Certification” which is like the cannabis equivalent of organic. But not only in terms of that ethos and what we built the brand on, but not only do we want to grow organic product we also wanted to grow it in a sustainable way.
Tell us More about Growing Sustainably?
One of the most interesting things about cannabis is people will say what’s going to happen when Big Ag comes in? Cannabis in and of itself as a plant is really sustainable. It’s one of the most carbon sequestering plants out there, so it’s actually pulling CO2 out of the air and putting it in the ground and storing it. It was actually used at Chernobyl to clean up the contaminated soil. So it sucks stuff up out of the ground and an acre of cannabis, depending on what market you’re in, can be worth anywhere from one to five million dollars. An acre of corn is worth six hundred and forty-four dollars. So the amount that you get out per square foot is in itself sustainable because you won’t need to have 20 acres per farm of rolling fields of cannabis. It doesn’t take that much.
When you grow it properly and sustainably it’s both good for the soil, good for the environment, and good for people. Again, that’s something that ties into who we are and what we wanted our brand to be. Noah has been cultivating on his property (which we have leased) for the last eight to ten years. And so the soil is really rich really complex in terms of the insect biology and the nutrients. We grow our cannabis right in the ground.
You know Maui OG goes in the same row every year in the same ground. And so we actually get a better cannabinoid profile and a better Terpines from that. You know terroir is an actual thing in cannabis for those of us who are growing in ground. You don’t get the same kind of healing effects from indoor light than you do from full spectrum sunlight. You don’t get the terpines when you don’t have like that rich soil and biodiversity. So growing outside in and of itself is actually making better cannabis. There’s just a stigma.
There’s been a stigma for the last few years that indoor cannabis is better and the only reason there’s that stigma is that federal prohibition has pushed all the growers either deep into the redwood forest of Humboldt or inside warehouse buildings because it was hidden and you couldn’t get in trouble. The redwoods in Humboldt are really damp. It’s not actually a good place to grow weed at all. And indoor cannabis is all hydroponics, you’re not getting the full sunlight you’re not getting all of those nutrients and everything. So you know because of that, that’s the weed people knew indoor crystals all over it, smells good, etc. So there’s just this assumption that indoor is more potent, has higher THC. But what we are proving at Aster Farms is that you can still get 26% THC growing totally organically in the ground with just sunlight and water. So we are out there trying to change that perception.
On a sustainable level we only use organic inputs. Really low input, high output and so one thing that we’re working on is actually getting the cost of cultivation down about 10x because when you grow outside and your soil’s amazing it doesn’t actually take that much to grow. So it’s interesting. We’re trying to spread that message in the industry that the best product, the best way for the environment to grow is outdoor and in ground.
Can you tell us a little bit about Harry’s harvest?
On July 27th of this last year, the Mendocino complex fire broke out about a mile down the road from us. Sam and I were actually on property packaging doing some inventory and stepped out for a break and saw a huge plume coming over the ridge behind us.
For about three days the fire was kind of moving right around us. It was just skipping us and moving northeast away from our farm. So we spent three days making sure the sprinklers were on the roof of the house, getting the entire property fire ready. On the third day, the winds shifted and the fire engulfed our entire neighborhood. We had a mandatory evacuation. All we could do was turn the sprinklers on in the house and turn the irrigation on in the fields and walk away.
A really unfortunate part about farming is that your animals live outside and they don’t necessarily come when you need them. So we have two farm dogs and three farm cats that are indoor/outdoor. We found both of the dogs and we found two of the cats. But Harry who was one of the favorite farm cats (half Bobcat) was nowhere to be found. Having to leave knowing that you’re leaving an animal that you love in harm’s way is just the worst experience I’ve ever had in my life.
We finally were allowed back onto the property after about 10 days. Out of 600 plants, only 13 of our plants survived. Noah’s family’s house was completely burned down to the ground. Luckily we hadn’t built our processing facility. There were some structures that we hadn’t erected yet, so that would have been hundreds of thousands of dollars of damage in and of itself. So it was the right time, right year for this to happen; but we still have not found Harry. We think he’s out there hopefully living some really badass Bobcat life and maybe one day he’ll make it back to the farm.
But in the aftermath, the cannabis community and the local community really rallied behind us. There was a nursery down in Selenas that heard that we were hit and they donated four hundred plants. Our distributor drove all the way down there, picked him up, and came all the way back literally helping us unload plants at 9 p.m. in the pitch dark on our farm. We had people field and rescue, local shelter volunteers putting up cameras, animal cameras, traps and food. And there was somebody every single day going to look for Harry.
It was just incredible how the community rallied around us and we decided that we wanted to give back.
An interesting part of that is it’s really hard to give back as a cannabis brand. There was one organization in our county that has done a really amazing job helping people get back on their feet after the fire. They take federal funds for one of their programs. And so if they took our cannabis money as a donation they would be risking their funds. So it all kind of was fate that we were first looking at these NGOs trying to figure out how we can donate and then it kind of all looped back to the volunteer firefighters. They were very happy to take our donations. They exist on donations. That’s how they’re able to keep doing their job. And the part that was fate is that if there is anyone you want to support. Those volunteers who left their homes and were fighting to save ours while their own home was burning down. And to do that, not as a job but as part of their way to give back to the community.
So we set up Harry’s harvest. It is a give back program that we’re going to continue indefinitely at Aster Farms obviously named after Harry. It is a five pack of three rolls and two dollars of every sale Aster Farms donates to a volunteer fire department. So our first two fire departments were Hopland which is in Mendocino where part of the Mendocino complex fire started and in Lake Port which is in Lake County where our farm is and the other side of the Mendocino complex fire started.
Going forward we want to continue this program. It’s not necessarily going to be about fire relief, helping battle the opioid crisis especially in the county that we live in, helping support veterans, doing environmental work, helping social injustice. Helping people get back on their feet who were persecuted by the cannabis drug war and should now have a chance to be part of it. So there are so many organizations that we want to support and we think we have been given an amazing opportunity by our community to grow cannabis and to make this business. And so we will always be giving back. And so that’s what Harry’s harvest is.
I wanted to ask you about your role in the industry as a woman and in comparing that to how you felt in the tech industry as a woman?
That is a great question and it’s actually something that a lot of people are really interested in. You know the cannabis industry I don’t know this stat 100% so I’m going to say it but somebody should check it. I believe that 36% of executives in cannabis right now are women (Fact Check: Sadly this number has now dipped to 27%). And that is much higher than in any other industry especially tech. There are a lot of couples in this industry. There are a lot of families in this industry. So really I think that because of where it came from and the people who were able to participate in the medicinal cannabis in the past, it’s really diverse.
In the tech world I was feeling, hearing, and seeing sexism on so many levels and it was really tough. I’ll just give one example that happened right here in Austin, Texas. At the end of TechStars you have a big demo day where 1000 investors come and watch you on stage and you have five minutes to pitch your idea and of my class three out of the 10 CEOs were women and this was the highest percentage of women of any TechStars class at that point. And I remember we huddled up one day in the office and for some reason – I will always regret this – the three of us decided not to wear jeans and our company t-shirts as everybody else does, let’s wear dresses. After the demos you go up and you socialize with these thousand investors, the only thing investors would talk to me and the other two CEOs about was why did you guys choose to all wear dresses? What is this whole female thing? And I will regret having done that forever. But at the same time, it gave me an experience in the worst of this and so now I really value and appreciate how women are treated in the cannabis industry.
We are hearing a lot of statements about how women are the future of cannabis and this is going to be the first multi-billion dollar industry run by women, are you that optimistic? How do you feel about those kinds of statements?
I am optimistic, we really believe people who are in it now we’re gonna make it. You know there’s gonna be a lot of consolidation over this next year. A lot of existential threats, but because this industry is founded on and by so many women we really think a lot of those companies are gonna have big success. At the same time, we are fundraising and traditional VC’s are now getting involved in the game. And so there are more traditional stereotypes and attitudes that are starting to come into the industry with big agriculture coming in, with institutional investors, so it’s really the responsibility of all of us on this side of the industry to make sure that our voices are heard and that we continue to be an important piece of the puzzle not being sidelined while the industry really progresses.
Can you tell us about what you are talking about at SXSW on your panel “Cannabis Brands and Investments”?
We’re taking a look at the different approaches that each kind of company has been taking. There are companies who’ve been around for 10 years that were part of the O.G. world of cannabis who made a fair amount of money and were able to bootstrap their own companies and grow and grow and grow. So there are some companies out there who have never taken investment dollar. So what does it mean to compete in a market for those brands? Their margin matters so much more than what something like a tech company does by operating in the red just to get growth to be acquired for a billion dollars.
So there are companies out there that come from this really old – I’ll call it old cannabis money – world. And then there are companies out there who are basically like tech companies operating in the red taking funding after funding round with the goal of being a billion-dollar exit no matter what the margin cost is leading up to there. So those are kind of the two extremes. At Aster Farms we’re in the middle. We started the company with our own funds. We have raised a seed round that involved a lot of friends and family and we are getting close to raising an institutional round. So for us we’re kind of in this middle of the road position where margin matters but growth matters.
It’s interesting that I’m speaking on this panel because we don’t have the answer yet at Aster Farms. We don’t know which of those growth strategies are going to be long term for us. So we’re kind of straddling the line. And so this panel will be really interesting to hear from people in each one of those categories like why and how are you operating in the red to be the billion dollar company. Why and how are you operating on a profitable margin to maintain that company and grow. So I think there’s gonna be a lot of interesting insights that come out of it. No definitive answers for the right way. I don’t think there’s a right way and a wrong way now.
Give us your 1 year, 5 year, and 10 year predictions for the cannabis industry?
I think within one year we’re going to see some state-led banking bills being passed already. At a federal level there’s the Safe Act which is about banking for cannabis companies. I don’t think that’s going to actually happen the next year on a federal level. But I think that states that have been in this program for a while are going to start figuring out their own statewide banking opportunities. So we think that’s in the next year.
I think in five years we are going to see federal prohibition end and it’s going to be really interesting because each state the regulations are wildly different and very regulated. So it’s going to be really interesting to see how interstate commerce happens when Federal Prohibition is over.
Ten years… I think in 10 years you’re going to know who the Budweiser of weed is, you’re going to know who’s the Lagunitas of weed is – us. And it will be a real industry that people are educated on and are incorporating into their lives in a very health and wellness educated way.
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