PICTURED: Aerial shot of Glass House Farms looking northwest towards Ventura. Photo by Graham Farrar 

by Alex Wilson

Graham Farrar can barely contain his excitement as he provides a tour of his 5.5 million square-foot greenhouse south of Camarillo. The operation is expected to become the world’s largest for growing cannabis once it’s fully converted from its original use as a high-tech tomato farm.

Graham Farrar. Photo by Alex Wilson

Farrar points out the complex equipment making Glass House Farms as green an operation as possible in every sense — environmentally, agriculturally and, of course, financially. A vast array of solar panels helps power the facility. A sophisticated water recycling system also allows for the reuse of water infused with expensive fertilizer to grow cannabis hydroponically. Robotic machines open and close windows in the translucent roof and pull black shades back and forth to trick cannabis plants into believing it’s nighttime during the day, a strategy to grow the best quality cannabis possible at the lowest cost.

Dozens of workers — better paid than their counterparts at surrounding farms — trim buds and perform other tasks such as adjusting irrigation equipment and hanging plants to dry.

“It’s pretty cool to see the progress and the way things are coming together,” Farrar said about the operation that saw its first harvest last month. “We’re finally seeing the first results of four years’ worth of work, which in cannabis sometimes feels like 40 years’ worth of work.”

The company’s president and co-founder is a self-professed tech-geek enamored of all the high-tech systems designed to grow cannabis as efficiently as possible. But it’s also apparent he loves the product even more. Farrar sees a three-foot-tall plant sprouting fresh buds covered in tiny white crystals along with red and purple hairs, pulls it to his nose, and takes a deep inhale of the aroma. He rubs the bud between his fingers to better smell the terpenes, organic compounds that provide flavor to cannabis. It’s obvious the bud is top quality, which Farrar’s customers will also appreciate.

Cannabis cultivation is high-tech at Glass House Farms. Photo by Alex Wilson

Farrar knows there’s nothing quite like the giant greenhouse on the Oxnard Plain that Glass House bought for $93 million last year, even as the industry expands across states where cannabis is legal. It’s unlikely anyone will ever build such a large greenhouse for cannabis, he said, since this one is being converted from growing tomatoes and cucumbers. He estimates the cost to build the complex today at between $250 and $300 million.

It’s an ideal facility for growing cannabis in every way, Farrar said, especially due to its location in California. He is envisioning a day when cannabis is legalized nationwide and he’s finally allowed to ship his product across state lines. He believes consumers will always want their cannabis grown in California, much like wine lovers pay a premium for wine from specific appellations like Napa or Bordeaux.     

“It makes so much sense. It’s all the right pieces, right? It’s the right climate, the right facility, the right team. It’s in the right location for consumers and where they want to buy cannabis from,” Farrar said. “It’s not filled up yet, but it’s the largest greenhouse that’s ever been licensed for cannabis in human history.”

Software, sailing and Sonos

Farrar grew up in Santa Barbara and said the enjoyment he received from smoking marijuana as a youth convinced him the negative things he heard about cannabis from adults were scare tactics. He enjoyed laughing with friends and the way food tasted better after smoking out.

He finished high school in a program at Santa Barbara City College that allowed him to earn college credits at the same time, and then went on to study molecular biology and biochemistry at the University of Colorado, Boulder. He was there only a year, but that’s where he met the woman who would eventually become his wife. The couple returned to Santa Barbara where Farrar joined a pioneering Internet company called Software.com involved in email applications.

“I was lucky to be one of the early folks at that company. We went public back in the dot-com boom days,” Farrar said about the company that first sold stock in 1999.

His financial success with Software.com allowed him to realize a dream of sailing across the Pacific Ocean.

“I bought a boat and spent two years sailing with my girlfriend who I met in Colorado. We sailed from Santa Barbara to New Zealand for two years and came back to get married,” he explained.

After returning to Santa Barbara, a friend told Farrar about starting a company described as an “iPod for the house,” which became Sonos, a leader in fashionably designed home-speaker systems. Farrar was part of the founding team at Sonos involved in product design, sales and customer support.

He became something of a serial entrepreneur, starting businesses involved in eBook publishing and an agriculture technology company developing fertilizer and other products for the hydroponics industry.  

Growth of Glass House

After learning more about the cannabis industry, Farrar started Glass House Farms about seven years ago with Kyle Kazan, now the company’s CEO. Kazan is well versed in commercial real estate, a former law enforcement officer and longtime advocate for ending the war on drugs. The co-founders purchased a greenhouse in Carpinteria and the business took off.

Glass House has established itself as a market leader in the cannabis industry. It’s a vertically integrated company that also distributes its products to dispensaries across the state and owns a growing number of dispensaries. Besides products sold under the Glass House Farms name, the company also owns several other brands including Forbidden Flowers in association with actress and musician Bella Thorne, and one of the best-selling edibles brands, PLUS Gummies.

Farrar opened the first adult-use dispensary in Santa Barbara, Farmacy, and the company acquired others in cities including Morro Bay and Turlock. The company has won licenses to open more, including in Isla Vista and Santa Ynez. Farrar said by the end of the year the company should have 12 dispensaries.     

Glass House went public last year with its stock sold on a Canadian exchange. During the company’s first quarter investor call last month, Kazan discussed the latest developments at the Camarillo greenhouse.

Farrar outside the 5.5 million square foot greenhouse. Photo by Alex Wilson

“The SoCal facility’s phase one expansion is expected to increase our greenhouse footprint by approximately 1.6 million square feet, which will enable us to produce an additional 180,000 dried pounds of cannabis, tripling our current cultivation footprint,” Kazan said. “Our long-term goal, when fully built out, is to increase our cultivation capacity to 1.7 million pounds of biomass. The competitive advantage of this facility is its potential to increase quality while significantly reducing our cost of production. As stated previously, our eventual goal is to lower our cost of goods sold to $100 per pound.”

Chief Financial Officer Mark Vendetti said on the conference call that total revenue for the first quarter of 2022 was $14 million, a 24% decline compared to the previous quarter.

Farrar said it’s been an interesting experience taking the company public while so much progress has been made on other fronts.

“It feels like we’ve accomplished a lot. It’s a lot of work. Cannabis is very hard. It’s the hardest industry I’ve ever worked in,” he said.

Coping with the curveballs

The road to putting Ventura County on the map for industrial-scale cannabis cultivation started with tomatoes.

According to the Houweling’s Tomatoes website, the company was founded in 1956 as a floral greenhouse and berry farm in British Columbia by Cornelius Houweling. Son Casey Houweling joined his family’s farming business in 1976, leading an expansion plan that included new high-tech ways to grow tomatoes hydroponically, a system that uses water enriched with fertilizers to nurture plants instead of planting them in dirt. The 125-acre greenhouse near Camarillo was built in 1996.

By the time California’s legal cannabis industry was taking off, it became apparent that the giant tomato greenhouse could be put to use for an even more lucrative crop. Farrar said he first set eyes on the greenhouse in 2018 and immediately saw the potential.

 “I got a tour through a friend and said, ‘Holy smokes, this is the nicest greenhouse. This is in the perfect place. There is no better place to grow cannabis than here. We should turn this place into the best weed farm in the world,’” Farrar recalled. 

One problem: Cannabis cultivation was still illegal in Ventura County.

That all changed in 2020 when a countywide ballot initiative, Measure O, easily passed, with Houweling as its main backer. Part of the measure’s appeal to voters was that it limited cultivation to preexisting greenhouses or warehouses and capped cultivation at 600 acres.

Houweling and Farrar are now business partners, and about two-thirds of the facility is still used to grow tomatoes and cucumbers under Houweling’s supervision.

While the wholesale price of cannabis and cannabis stocks have both dropped precipitously in recent months, Farrar is not deterred by that setback.

“We’re on the bleeding edge of what’s happening with regulations and legalization and taxes and illicit market and all that. It’s curveball after curveball and now you have a massive price drop in the last year and half, so again, we’re not totally surprised by that,” Farrar explained. “Part of the reason we’re doing what we’re doing here is because we’re trying to build a company and an operation that can survive through stuff like that . . . The cycle will go up and the cycle will come back down, and we want to make sure we have a company that can thrive through all of that.”

Impacts on the local community

Cannabis is grown hydroponically at Glass House Farms. Photo by Alex Wilson

Measure O includes local taxes totaling 4% of gross receipts from the sale of processed cannabis, and 1% for selling cloned plants to other growers. Now that harvesting has begun, Farrar said he expects a financial windfall for the county government.

“I’m fairly confident that at some point we will be one of, if not the largest, taxpayer out there. I think we’re going to generate a lot of jobs and a lot of tax revenue,” he said, adding that he could not discuss specifics about how much Glass House expects to produce in the Camarillo greenhouse in coming months due to financial regulations on publicly traded companies.

About 150 people work on the cannabis side of the business with around 200 people growing tomatoes and cucumbers on the sections of the greenhouse that have not yet been converted. Aside from higher pay than nearby farms offer, Farrar said another advantage for his workers is that it’s a year-round operation, not seasonal like many other jobs in agriculture. 

“I know we attract a lot of the best talent out there and we try to take care of people. A lot of the employees are shareholders and we have 401(k) plans, vacation plans, and all of that kind of stuff that’s not super common in ag,” he said. 

Employees working on the vegetable side of the greenhouse will be brought over to the cannabis operations as they expand over time, he said. 

County government’s perspective

 With the passage of Measure O, the Ventura County CEO’s office was assigned the duty of regulating the industry. James Importante, a program management analyst in the CEO’s office, is the main point of contact for businesses seeking to start local cultivation.

So far, just two permits have been granted, Importante said. In addition to Glass House, a permit was granted for a long-vacant 15,000 square-foot greenhouse on Fifth Street, not far from the Glass House greenhouse, by a company called Cubs Den LLC. He noted that applications have been filed to convert eight other greenhouses to cannabis use in county unincorporated areas. The drive to convert more greenhouses to cannabis may have been slowed for a variety of reasons, including market conditions, COVID, and complex state regulations.

Importante said he’s been impressed with the quality of the applications.

“One of the fascinating aspects of this project was the level of sophistication from our applicants,” he explained. “The requirements of the ordinance are rather robust. We do get quality applications. We haven’t rejected an application because of poor work or information.”

It’s all gone smoothly so far, Importante said, but the county is ready to act if there are any problems with cannabis facilities. “It’s still really early in our program. We haven’t had any complaints or any criminal activity associated with this program. That may be something that may occur in the future, so I might have a different opinion then, but we haven’t had to have that experience yet so it’s been pretty low key, it’s been pretty quiet.”

Importante noted that in the event of complaints, the county will have ways to address them. “If a licensee does have these issues and either they aren’t able to resolve it or, for whatever reason, are unwilling to resolve it, then their license will not be considered for renewal. So there’s some language in there that would help mitigate any bad actors.”  

Looking to the future

The amount of space used for cannabis is expected to grow in the future. Photo submitted

Even though Glass House has established itself as one of the leading cannabis companies in just a few years, Farrar said he’s mostly focused on what still needs to be accomplished.

“Nothing feels done. It’s a lot of hard work but we’re lucky to have the opportunity to work on it,” he said. “There’s so much work to be done I probably don’t stop and smell the buds often enough.”

While the company is not currently offering tours of the facility to the public just yet, Farrar hopes that will be possible in the future. He wants Glass House to be a part of the community in Ventura County.

“We’re really happy to be here. We consider it an honor. The county’s been great to work with. The people down here are great,” Farrar said, “We’re really happy to have been able to take a greenhouse that already existed and put a new crop in it, a crop that we think helps people. Whether it’s fun on Friday night or a tincture that helps you sleep or something someone uses for cancer or epilepsy or PTSD. We think it’s a positive thing.”

Glass House Farms, 5601 Casitas Pass Road, Carpinteria, glasshousefarms.org