Business Beat: What’s organic? In the marijuana industry, that’s a hard question

Sep 23, 2015

  Nilvio Aquino weaves through a tangled jungle of marijuana plants at an indoor grow facility in Denver.

“Throw your nose in there. It’s nice and pungent,” he said, pulling a seven-foot tall plant down to nose height at one of the company’s grow facilities.

Aquino, the lead grower for Sticky Buds, a chain of marijuana shops in Denver, is in his element among the plants. He’s like a proud gardener showing off blue ribbon varieties, bustling from plant to plant, picking out his favorites.

“I’m all about quality. I’m back and forth with owners about yield, of course,” Aquino said.  

His marijuana plants soak up nutrients commonly used on certified-organic farms like kelp meal and earthworm castings. Big bags of potting soil sit in the hallway. When a pest problem pops up, he avoids using synthetic pesticides.

“It’s about finding your little foothold in the market and holding on to it with your life essentially, man,” Aquino says.

All that adds up to something that feels like an organic operation. But for now that’s about as official as it’s going to get. There’s no such thing as a government-sanctioned certification for organic marijuana -- in large part, because growing or using marijuana is still a federal crime.

Until recently, growers throughout Colorado had free reign to use whatever pesticides they wanted in the growing process. That led to potentially dangerous experimentation inside grow facilities, and a crackdown from state agriculture officials.

“The customer started asking, ‘Well, wait a minute. What are you putting in our product?’” said Eric Eagon, Sticky Buds’ general manager.

In early 2015, Denver officials cited a handful of commercial marijuana growers for misusing pesticides in indoor grow houses. Some of those businesses were also advertising their products as “chemical-free” and “organic.”

Dozens of Colorado marijuana dispensaries, both medical and recreational, tout their products as “organic.” National organic standards for nearly every agricultural product in the country are set by the U.S. Department of Agriculture’s National Organic Standards Board. Cannabis isn’t currently on the NOSB’s docket for the creation of organic standards.

Because the drug is still illegal at the federal level, and state regulators are still playing catch up, growers can make all kinds of unchecked claims about their plants, without drawing the ire of consumer fraud regulators. That could soon change.

“Is there a legal definition at this point in time? No there is not,” says Roger Hudson, spokesman for the Colorado Attorney General’s Office. “But there is a general idea of what ‘organically grown’ is.”

Thanks to complaints from consumers, Colorado Attorney General Cynthia Coffman has assigned fraud investigators to look into dispensaries making organic claims on products, Hudson said. But Hudson wouldn’t comment on whether the office is exploring citing marijuana businesses for misleading advertising.

The lag in regulation from both state and federal officials for marijuana cultivation has also opened the door for trade associations to attempt to fill the gap. Enter the Organic Cannabis Association, based in Denver.

“We need some standards in cannabis production,” said John Paul Maxfield, one of the association’s founding members.

Some opportunistic growers are taking advantage of the conflicts in law, Maxfield said, “bastardizing” the term “organic.”

“People can grow in ways that aren’t organic and receive a premium that should be going to the people that are doing it, what we call ‘right,’” Maxfield says.

The Organic Cannabis Association is now offering to certify operations as “pesticide-free,” but Maxfield says they’re nowhere near being able to do a full organic certification. Other third-party groups are offering up auditing services too, like California-based Clean Green Certified, and Oregon-basedOrganic Cannabis Growers Society.

“If we’re able to be a placeholder until the USDA comes on board, that’s a great thing,” Maxfield says.

The discussion around organic cannabis brings up the amorphous definitions consumers impart on organic products. On one side exists a strict set of standards, set by the USDA with a sometimes expensive, lengthy certification process.

But at the same time, the word “organic” has become a brand itself, enjoying its own blend of consumer attitudes and feelings, which sometimes do not match up with the government standards, said Colorado State University economist Dawn Thilmany.

“Probably the most common confusion about ‘organic’ is exactly what it does and does not mean,” Thilmany said.

Whether you’re talking about food or cannabis, she said few consumers know what the term organic is meant to convey. Definitions for the word and the cultivation methods behind it change depending on who you ask.

“If you don’t have economically literate consumers who will use a word to indicate whatever they want it to indicate, then that’s a problem,” Thilmany said.

Back at the Sticky Buds marijuana facility in Denver, grower Nilvio Aquino said the company’s focus on organic methods should pay off as the industry matures. Just like food, he said, there’s always going to be a group of consumers willing to pay a higher price for something they see as superior.

“It’s a business. Your product speaks. Some people aren’t connoisseurs, but we’re trying to target connoisseurs,” Aquino said.

It’s about finding the right mix of regulation and marketing, he said, to assure consumers that when a grower says the marijuana is organic, they’re not just blowing smoke.