It’s almost moving day for a Denver marijuana grower who is about to more than triple the size of his operation.
Premium Pete’s owner Luke Ramirez expects to sign a lease in the next two weeks to move his recreational cannabis grow from its 3,000-square-foot warehouse near Stapleton to an 11,000-square-foot location along the I-70 corridor.
“We’re going to be increasing production by 800 percent,” Ramirez said. “We’ll be producing just under 240 pounds per month once we reach full capacity. Right now, we’re a little bit over 20 pounds per month.”
The project won’t sprout up overnight. Once the lease is signed, Ramirez will begin a nine-month, $3 million construction project to maximize the warehouse’s efficiency.
“A company called Pharm Pods builds trailers that are built to grow marijuana,” Ramirez said. “They’re 40 feet long by 8.5 feet wide. We’re going to install 50 of those at our new warehouse and we’re going to stack them on top of each other.”
A key feature of the building is its 20-foot ceiling, which is high enough to stack one Pharm Pod on top of another.
The new place costs $11 per square foot per year to rent, he said, while his current operation costs $14 per square foot per year.
Ramirez said he’s funding the expansion through a combination of cash flow and loans from private investors. Finding investors is tricky for cannabis entrepreneurs, Ramirez said, because equity can be sold only to investors who live in Colorado, and loans to cannabis companies are generally unsecured.
Ramirez said he’s also going to start selling wholesale to recreational cannabis stores. Currently, Premium Pete’s supplies only the Walking Raven cannabis shop on Broadway, which Ramirez co-owns with his business partner Nicholas Paul.
Premium Pete’s differs from Denver’s other cannabis growers because it sticks to growing top-quality flower instead of lower-grade marijuana for use in concentrates such as cannabis oil or edibles, Ramirez said.
“We focus on selling flower as flower with the intent to be sold to the actual consumers,” Ramirez said.
While the average market price for a pound of marijuana flower is between $1,800 and $1,900, Premium Pete’s sells for $2,300, Ramirez said. After costs and licensing fees, each pound nets Premium Pete’s about $400 in profit, he said.
To maintain that level of quality, Premium Pete’s makes its own soil. The recipe is kept secret, but includes ingredients like bat guano, oyster shells and bone meal.
Ramirez, 26, got his start in the business at age 15 when he illegally sold the plan in high school.
The seed was planted. And now he likens Colorado’s marijuana grow licenses to New York City’s coveted taxicab medallions.
“I knew that this was an opportunity that would never come around with someone of my financial capabilities ever again,” he said.
Ramirez aims to spread Premium Pete’s across the U.S. as more states legalize marijuana consumption.
“My goal is to be in 15 states in 15 years,” he said. “A good role model for my company is new Belgium. They produce a premium product and have a nationwide presence.”