By Rob Meagher
Whether small or large, one dispensary or many, single state or multiple state footprints, vertically integrated or singular licensee holders (Producer, Processor or Retailer), one of my favorite company stories that CBE has presented to our readers since launching almost 2 years ago is “Mom and Pop shop is making it big”, the story of vertically integrated Canuvo of Maine.
Many things have changed since we first covered the company.
- Sage Peterson became CEO after her husband, Glenn (a newly elected Board Member of the National Cannabis Industry Association), at the company,
- Canuvo moved into a 120,000 square foot facility and have already harvested 3 crops since transitioning from the innovative tractor trailer cultivation pods that they have grown their product in since becoming one of the state’s eight medical marijuana licensee holders,
- Maine is one of several states with a November ballot initiative planned to legalize adult-use marijuana and regulate it like alcohol.
CBE recently caught up with Sage Peterson (SP) and below are excerpts from our conversation.
CBE: Hello Sage and congratulations on the progress Canuvo has made since we last spoke. I have enjoyed following you guys and learning about the progress that you and Glenn have been making… What is new at Canuvo?
SP: We have been in expansion mode! Over the course of the last 18 months, we have moved and improved both our dispensary and our cultivation facility. Our footprint for both business units increased exponentially. 
CBE: Has that been to prepare for the Maine November ballot initiative or to meet current medical marijuana demand?
SP:Â Expanding the dispensary and cultivation site was done to support the medical market and the potential for legalization. In this industry when you make changes, they need to be big steps, not incremental. The two locations we expanded into will keep us covered for years to come.
CBE: How do yields at new grow compare to the original tractor trailer cultivation sites?
SP: We have experienced a 300 percent increase in yield!
CBE: Wow. What have you changed or updated etc. since we last spoke?
SP: We have completely revamped our growing methodology. Our internal team designed every component and system and vetted the best vendors to execute on our design.
CBE: Care to share some of the vendors that you have partnered with?
SP: Ones that offer financing! Joking aside, choices in the industry (e.g. lighting companies) and companies that are needed to support our industry (e.g. HVAC) are expanding all of the time. When choosing vendors, we focus on building a system.
CBE: What is your go-to equipment at Canuvo?
SP: A properly designed system is more important than any one piece of equipment. The equipment are separate parts of the system that have to work together. The challenge is controlling the technology properly—for example, with software programs that can notify you of changes in the environment and lighting parameters. In indoor agriculture, reaction time is very important. Designing a system that can prevent a problem in the first place is even more so. 
CBE: What has & hasn’t worked to your expectations?
SP: The design for the trailers worked up until a certain point. The design was not scalable. The design for the new garden took into account everything we had learned and then incorporated the most current options available to us. The efficiency of the garden design and the subsequent increase in yields have surpassed our expectations. At the second harvest we exceeded our reach goal. We see continued incremental improvement as we dial in our processes.
Because this business grows so quickly, you need to be thinking scale. If you think you need 10,000 sq feet, find 20,000; if you need 20,000 sq feet, look for a building that has 40,000 sq feet. The building our current cultivation is in is 120,000 sq feet. We acquired the building by holding the master lease to the whole building and will be able to utilize the full space if legalization occurs.
Though Glenn and I have experience with real estate, a building of this size has a different set of challenges. We are fortunate to have a great local network of consultants who are very familiar with the history and structure of the building. Even though the building is in great shape and will meet our needs for future growth, continued care and maintenance are required. Typically, small businesses of our size would not have that added responsibility and the associated costs.
CBE: What would you and Glenn do differently if you started all over?
SP: This business is tough on so many levels! In 2010 we were underfunded and lacked the breath of institutional knowledge for the myriad of areas in which we needed expertise. The two-fold answer to your question is:
- If I were to do it over from 2010, I would have wished for more working capital at a reasonable rate.
- If we were to start all over now, I would think twice about moving forward! Like many operators in this space, there are more things out of our control than in our control. This is not a get-rich-quick scheme. If I were to start again I would focus on a specialty. Maine is a seed to sale state. The knowledge we have gained over the last 6 years in cultivation, processing, manufacturing and sales has been tremendous, but has forced us to be generalists. The next step would be take the knowledge we have gained as generalists and pull forward as specialists. The time to focus and refine is now.
CBE: How large is your staff now?
SP: 25—but we have had a re-distribution in labor. With the new cultivation facility, we were able to decrease the grow staff by 50 percent while increasing the yield by 300 percent. We then filled additional positions in customer service and manufacturing.
CBE: What do you project for year-end 2016 revenues?
SP: We are tracking towards $3 million.
CBE: What is next for Canuvo?
SP: In the next 12 months, we are planning to have in-house capabilities for a lab, extraction and R&D.
CBE: Anything else you would like to share?
SP: Because more things are out of our control than in our control, we needed to be patient and let things unfold. For example, the extraction market is growing rapidly and there are new solutions coming to market each quarter. We are glad that we waited to purchase equipment. I think patience, endurance, and cash flow are the key ingredients for our continued growth.
CBE: Thanks so much for the update Sage and keep up the great work, you truly inspire us!
