The Cannabis Pragmatist — Nursery Gold: Top Cannabis Regions | Volume 1, Edition 5
Controlled environments, supplemental lighting, temperature regulation, and humidity control are the pillars upon which thriving nurseries are built. Since legalization, two regions have emerged as leaders: Salinas and Carpinteria.
Salinas: The Salad Bowl
Upon legalization, Salinas, California, was primed for success due to pre-established greenhouse infrastructure. According to the DCC there are 37 active nursery licenses in Monterey County as of writing and a remarkable amount of square footage dedicated to nursery propagation. Salinas stands tall as a nursery powerhouse in the industry. Here’s why it’s the top choice:
- Climate Advantage: Salinas enjoys a temperate climate, a boon for greenhouse operators. The moderate temperatures keep heating and cooling costs in check, ensuring efficiency and cost-effectiveness in operations.
- Tax Benefits: Besides the annual permit fees, there is no nursery cultivation tax in Monterey County. This tax-friendly environment is a significant advantage in an over-taxed cannabis environment.
Carpinteria: Greenhouse Legacy
Santa Barbara, California, a gem in its own right, has carved its niche as a leader in cannabis nursery cultivation. The greenhouse infrastructure left behind by the fading cut flower industry has become an opportunity for the cannabis industry, which stands at 26 licensed nurseries, according to the DCC at the time of writing. There are however headwinds in Carpinteria, which are a municipal gross receipts tax of 4%, expensive real estate, and high net-worth neighbors complaining about the odor. That being said, here’s what makes Carpinteria unique:
- First Mover Advantage: Santa Barbara County was one of the first to establish an ordinance for large scale production with over 1500 acres of cannabis entitlements for growers to apply for. With so many large scale cultivators in the county, the Carpenteria greenhouses were a perfect place to propagate nursery starts and feed the ecosystem.
- Climate Advantage: A temperate coastal climate in Carpinteria means cost savings in the greenhouse.
The Cannabis Pragmatist: Buy purpose built facilities and spend more on capex to reduce opex. The prevailing operators can increase productivity and reduce man-hours and overall operational expenditures. A high-tech asset will also be more desirable to the subsequent acquirer.
