Reef Dispensaries – Arizona and Nevada

Excerpt

In this Grow Op Overview, we speak with the CEO, Director of Marketing, and Director of Cultivation for Tryke Companies, the holding company doing business as Reef Dispensaries.

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About Tryke

Corporate Structure

Matthew Morgan: Tryke is the holding company for Reef Dispensaries, our trade name. Technically, there are 3 different Tryke companies and each Tryke company works in a specific geographic location: Arizona, Southern Nevada, or Northern Nevada. The same executive operating team runs all three companies, and each Tryke does business as Reef Dispensaries. We currently have 10 office directors and 250+ employees spread over the three entities.

Tryke Size

Matthew Morgan: Tryke is currently operating about 100,000 square feet of cultivation space between Arizona and Nevada, with the potential to grow another half million square feet, if the demand is there.

Why grow in Las Vegas?

Matthew Morgan: Tryke originally started in Phoenix, Arizona, but we wanted to be financially stable. When we saw that there was a good chance to go recreational in Nevada, we found a building close to the Strip where we could flagship indoor cultivation.

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Operations

Indoor/Outdoor/Greenhouse and why?

Darin Carpenter: Our operations are designed for indoor cultivation, because of location and regulations. In the Southwest, we have cooling issues to deal with. If we built a greenhouse in the middle of Phoenix, the costs would be as much as an indoor grow.

The Plants

The Numbers Darin Carpenter: Both facilities combined are growing about 30,000 different plants. Our genetics lockers have about 200 strains, but we are currently growing about 50-60 strains. Strain Selection Darin Carpenter: Our strains are selected based on supply and demand with an extra rotation to keep our retails fresh with new inventory so that our patients don’t get bored of the same flavor. Feeding Style and Media Darin Carpenter: We use a top-down, drip-fed, drain-to-waste system. We grow with Coco Coir and Grodan rockwool. Nutrients Darin Carpenter: We make our own nutrients. While the mixture is proprietary, we keep it fairly basic. The mother plants are treated more delicately, so they get a different feeding regimen. Pest Management Darin Carpenter: We use a preventative IPM strategy that allows us to pass state requirements. Every room gets looked at every day. I can’t disclose too much more, because it is one of our competitive edges.

Building Design

Darin Carpenter: About 10% of our facility is propagation, another 15% is for veg, and the flowering rooms are about 75% of each facility.

Lighting

Darin Carpenter: We follow the industry standard: T5 bulbs for propagation, metal halide lights for veg, and HPS DE for flowering. HPS in veg also works well. We use a custom paint spec for higher reflectivity.

Environmental Controls

Matthew Morgan: We have a building management system that runs automatic nutrient dosing and automatic feeding systems in addition to environment controls. It was custom designed for us by a controlled environment engineer.

Laboratory Testing

Darin Carpenter: Nevada law requires us to test for:

1. Pesticide residue
2. Colony forming units (CFU) of microbes and fungi
3. Cannabinoids
4. Terpenoids

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The Tryke Perspective

MJ Freeway and the Repercussions

Matthew Morgan: We lost seven figures in revenue because of the MJ Freeway fiasco. People were working 18-hour days to move us over to a whole new platform, but we had no choice. Now we’re using a hybrid system: We use BioTrackTHC and Microsoft accounting software for midsized companies. The software has multiple functions:

1. Coordinates with BioTrackTHC.
2. Tracks our inventory.
3. Acts as our accounting system.
4. Tracks our analytics.
5. Provides redundancy in case another event happens.

Challenges

Past Matthew Morgan: We entered Nevada when the market was brand new. We had to quickly adjust in order to stay profitable. Our size as a company can make that difficult. Current Matthew Morgan: What’s going on in the White House is really making it difficult to plan out our future moves. Our business model requires a thriving recreational market in Nevada, and we don’t know what’s happening with the current administration.

Successes

Matthew Morgan: Tryke is our biggest success. We’ve grown from one person to over 250 employees. We’re in great shape for our third anniversary.

Regrets

Matthew Morgan: Our biggest regret is not lobbying harder in Florida. We had high hopes and they were dashed by their regulations. Put it this way: A cannabis company cannot succeed under Florida regulations. Everybody there is hemorrhaging money. They’re receiving a ton of public backlash right now.

Advice for New Growers

Darin Carpenter:

1. Don’t cut corners.
2. Listen to people who have done this before.

Companies bring in people with zero experience because they don’t have bad habits to unlearn. We bring in people who want to work hard, learn, and come up in the industry.

Darin Carpenter, Director of Cultivation: Aww man, that’s a loaded question. I have experience with all styles of growing, and they all have their own benefits. With indoor cultivation, you’re controlling every single parameter: temperature, light density, humidity, and every little detail of production. Greenhouses are virtually identical, but there is some variation that reduces your control when compared to an indoor environment. If you’re outdoors, you’re controlled by the elements, and we’re not in a geographically feasible location for that. The Mojave desert is not known for being hospitable. All of our operations are designed for indoor cultivation, and we have a couple of reasons for that: location and regulations. Since we’re located in the Southwest, we have specific environmental concerns to deal with. For example, if we built a greenhouse in the middle of Phoenix, we’d have to implement extra infrastructure to keep it cool enough for the plants, and the costs would be equal or greater to an indoor grow.

By the Numbers

Darin Carpenter, Director of Cultivation: In both facilities, we’re currently growing about 30,000 different plants. In our genetics lockers we have about 200 strains, but we are currently growing about 50-60 strains.

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Strain Selection

Darin Carpenter, Director of Cultivation: Most of our strains are selected based on supply and demand. But we also like to keep a rotation to keep our retails fresh with new inventory so that our patients don’t get bored of the same flavor. We’re also working with breeders to come up with new strains. We want to keep things fresh.

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Feeding Style and Media

Darin Carpenter, Director of Cultivation: We use a top-down, drip-fed, drain-to-waste system. We grow with Coco Coir and Grodan rockwool. We use the same media throughout the life of the plant we’re growing. We use Coco Coir primarily in our Phoenix facilities and Grodan primarily in Nevada. We use whatever improves our quality and yield.

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Nutrients

Darin Carpenter, Director of Cultivation: Thanks to my background, I know how to mix nutrients. While our mixture is proprietary, we keep it fairly basic. Occasionally we will use specialized nutrients, but generally we make our own. The mother plants get treated a little bit differently than our other plants. They are treated more delicately, so they get a different feeding regimen. We use compost teas, beneficial microbes, and all that stuff. We give them a wider variety of treatments and media. Related Articles: Compost Teas: Taking Fertilizer to the Next Level

Layout

Darin Carpenter, Director of Cultivation: We run a tight propagation department. About 10% of our facility is propagation, another 15% is for veg, and the flowering rooms are about 75% of each facility. Editor’s Note: Based on their current size, that means they currently have 10,000 square feet dedicated to propagation, 15,000 square feet dedicated to veg, and 75,000 square feet dedicated to flowering. Should they expand, those numbers will become 60,000, 90,000, and 450,000 square feet, respectively.

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Lighting

Darin Carpenter, Director of Cultivation: We pretty much follow the industry standard: T5 bulbs for propagation, Metal halide lights for veg, and HPS DE for flowering. I’m also a fan of using HPS in veg because it works so well. We allocated our lights based on what was efficient. We’re using a lamp combination that provides more coverage with fewer fixtures and therefore greater efficiency. We also use a custom paint spec for higher reflectivity.

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Environmental Controls

Darin Carpenter, Director of Cultivation: We’re using a custom building management system to take care of our environment. It was designed for us by a controlled environment engineer. Matthew Morgan, CEO: The building management system runs automatic nutrient dosing and automatic feeding systems in addition to conventional environment control.

Darin Carpenter, Director of Cultivation: Depending on what stage you’re in, there are different rules and regulations regarding what options are available to you. The majority of our pest management is a regimented, preventative IPM strategy that allows us to pass state requirements and virtually eliminate all pests. Every room gets looked at -- every single table, every single day. It’s difficult, but necessary to inspect them every day. I can’t disclose too much more, because pest management is one of our competitive edges. Other growers in the regions we operate in struggle with pests. Related Articles: Integrated Pest Management

Darin Carpenter, Director of Cultivation: Nevada law requires us to test for the following:

1. Pesticide residue
2. Colony forming units (CFU) of different microbes and fungi
3. Cannabinoids
4. Terpenoids
5. Visual inspections

Matthew Morgan, CEO: We lost seven figures in revenue because of the MJ Freeway fiasco. As you can imagine, I’m very upset about the whole incident. It put a ton of stress on our organization. People were working 18-hour days to move us over to a whole new platform that nobody knew anything about. But with the losses we were facing, MJ Freeway left us no choice. Now we’re using a hybrid system: We’re using BioTrackTHC and accounting software designed by Microsoft for midsized companies. The software has multiple different functions:

1. It coordinates with BioTrackTHC and confirms information.
2. It tracks our POS systems and inventory.
3. It is our current accounting system.
4. It tracks all of our analytics, including costs per pound, and financial matters of a similar nature.
5. It provides redundancy for our entire system in case another event happens.

Past

Matthew Morgan, CEO: We came in strong into Nevada when it was the newest market in the country. We had to adjust nearly everything on the fly in order to stay profitable as a large enterprise, especially in a soft market like Nevada. A good analogy is that we’re piloting a cruise ship, while somebody with a mom and pop shop is driving a speedboat. Turns like a... boat.

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Current

Matthew Morgan, CEO: The lack of communication from the federal government about cannabis worries me. Trump is tough to read and kind of a loose cannon. What’s going on in the White House is really making it difficult to plan out our future strategic moves. There are 58 dispensaries in Nevada, and we own four of them. Our business model revolves around a thriving recreational market in Nevada, and with the current administration we don’t know what’s going to happen.

Matthew Morgan, CEO: Tryke as a whole is our biggest success. We’ve grown from just myself to over 250 employees and a large amount of space. We’re adding more as time goes on, and we’re in good shape for our third anniversary. We’ve utilized our skills to their full potential in the cannabis space.

Matthew Morgan, CEO: Our biggest regret is not lobbying harder in Florida. Their regulations and rules are pretty draconian. We really had high hopes to sell in Florida, and they were dashed by their rules. For example:

1. You can only grow CBD-only plants. THC has some medicinal value too, but lawmakers didn’t care.
2. There are only 8 or 10 licenses in the entire state. This allows for monopolies and bad business practices.
3. You have to have a pharmacist on-staff full-time for no particular reason.
4. There’s a weird requirement about having a greenhouse for 10+ years.

Put it this way: Florida designed a losing business model. A cannabis company cannot succeed under current regulations. Everybody who has a license right now is hemorrhaging money. When voters overwhelmingly voted in a medical program in November, they voted in a relatively unshackled bill. Legislators and assemblymen came in and wrote suffocating regulations. In my opinion, that was not the intent of the popular vote. And it shows. They’re receiving a ton of public backlash right now. Three or four thousand people are showing up for legislative meetings when they only expected a few hundred. Go ahead and humor yourself and read the regulations. Editor’s Note: At time of writing, Florida’s cultivation laws are up in the air. Conflict between Florida’s House and Senate over the maximum number of dispensaries will require a special session to address.

Matthew Morgan, CEO: I will say that we are currently looking at markets in other states, but I’m not going to go into detail. Our competitors would love to know what markets we’re looking at.

Darin Carpenter, Director of Cultivation:

1. Don’t cut corners.
2. Listen to people who have done this before.

The reason why I say that is because we’ve done this before. Companies bring in people with zero experience because they don’t have bad habits to unlearn. It’s harder to untrain somebody from bad habits than it is to bring somebody fresh and teach them the protocols and specifics. We bring in people who want to work hard, learn, and come up in the industry.