The start-up world is colliding with the movement for marijuana legalization, as revealed in a recent Mashable article, "Money to burn."
It's not easy being young these days. Most Millennials graduated from high school or college in the midst of the worst economic calamity since the Great Depression. Consequently, members of what is often referred to as the "recession generation" are struggling to get ahead.
According to the US Census Bureau, Millennials make less money, are more likely to live in poverty and have higher rates of unemployment than their parents did when they were in their 20s.
Yet, in spite of the many challenges Generation-Y faces, all is not lost. With the more traditional route to success paved with obstacles, many Millennials have decided to carve their own path. Simply put, this is a generation of entrepreneurs.
Indeed, Millennials have fostered a start-up revolution. Much of this has occurred in the tech world. This shouldn't come as a surprise, as this generation grew up with computers.
This is precisely why four 20-something friends in Washington have combined the entrepreneurial spirit of their generation with the movement for pot legalization. As a result, they are building a multi-million dollar business known as Amerifarms LLC.
How to start a pot farm.
Josh Chase (25), Alex Curry (24), and brothers Miles Deife (25) and Connor Deife (23) all met while studying at Santa Clara University in California.
Although different ages and majors, the four often partied and smoked pot together. It was your typical American college experience. Study hard, party harder.
After graduating, they all pursued various careers. Ultimately, none of them felt satisfied with what they were doing. They wanted to build something on their own, instead of just following the corporate herd.
By the fall of 2013, all of them had quit their jobs.
The Deife brothers have a family farm in Washington, one of the four states in which recreational marijuana use has been legalized. Accordingly, the four friends decided to come together and submit an application to grow and process marijuana. After a lengthy process, their application was approved.
It also took some effort for Miles and Connor to convince their family to let them grow marijuana on their land. Ultimately, the financial incentives were too strong to deny, and the boys were sold 20 acres of land to farm on.
Just like a tech startup, they had to build their company, Amerifarms, from scratch. In fact, they consciously modeled their new business around many of the entrepreneurial principles of the tech world.
They had to borrow money from family and friends to get started ($350,000), which they still have to pay back. The four friends also had to come together and build the facility where they now cultivate marijuana.
This was no simple task. It required grueling manual labor and took them almost a year to complete.
The four young men dug trenches, erected fences, assembled hundreds of lights and constructed a greenhouse. All of their hard work has paid off, however, as marijuana is an extremely lucrative crop.
Selling pot is easy, business and farming are hard.
Like other startups, each of the four founders plays a specific role in the running of the company: Josh grows, Miles manages sales, Alex handles the numerical and technical side of things, while Connor handles extraction.
Extraction is the process of making butane hash oil. Connor monitors the ovens, or machines, that are necessary for this.
Hash oil is what Amerifarms has made most of its profits off thus far. According to Miles, "We make $40,000 a day just on hash oil. Literally the machine sh*ts out money. Out of garbage.”
In December 2014, they started selling marijuana to retailers as well.
Regardless of the profits they are seeing, the four friends are still trying to find a happy medium in terms of the company's daily operations. There is no CEO, and they make decisions collectively, which can lead to stalemates and disagreements.
It's tough running a young company, particularly one that requires so much physical labor. A startup is already mentally taxing and requires investing an exceptional amount of time and money, which can lead to a great deal of stress.
Hence, no matter what kind of company you're running, business is tough. Entrepreneurship is inherently risky. You have to stay competitive, which often means consuming a large number of resources. This is particularly true in terms of farming, which provides unique challenges and requires a different type of work from tech startups, for example.
While tech startups are typically located in comfortable communities, Amerifarms is an hour from the closest major supply center. Isolation also means that laborers are difficult to come by.
As Anna Callaghan notes in an original piece on Amerifarms for Mashable:
The four founders [of Amerifarms] count vast differences between themselves and their Silicon Valley peers: isolation and manual labor are huge. But there are similarities too, chief among them the immense pressure to get a new thing right the first time.
Business is ruthless, particularly for startups. Fundamentally, it requires finding a healthy balance between expanding and gaining revenue. Not to mention, Amerifarms is venturing into uncharted territory. Recreational marijuana use has only been legal in Washington since 2012, and its retail stores have only been operating since July 2014.
Luckily for Amerifarms, weed is a very popular product, thus the pot industry's relative youth is not a huge impediment to growth. At the moment, marijuana is the fifth most valuable cash crop in Washington. It also has the potential to generate about $600 million for the state in taxes and fees over the next five years.
With money like this coming in and support for weed legalization expanding, Amerifarms might be one of the first in a wave of pot farm startups.
Citations: The Millennial Startup Revolution (Forbes), 4 Ways Millennials Have It Worse Than Their Parents (Time), The Recession Generation How Millennials Are Changing Money Management Forever (Forbes), How Broke Are Millennials (Slate), 6 facts about marijuana (Pew Research Center ), Money to burn (Mashable )