Flow Kana CEO Sees Success in Helping Cannabis Black Market Into the Light

Photo Credit: Rich Pedroncelli/AP/Shutterstock
February 27, 2019

By Chloe Aiello

Farmers in California's Emerald Triangle ー or the region between Mendocino, Humboldt, and Trinity County ー have for generations supplied illicit cannabis to the black market. Prohibition forced these farmers into hiding, so they got creative ー building sustainable, diverse and completely off-the-grid farms.

Now that marijuana is legal in California, Flow Kana CEO and founder Michael Steinmetz wants to help those black market farmers go legit ー while pushing back on big agriculture at the same time.

"The opportunity that we have particularly in California to really be the gold standard for the industry is really this unique ecosystem that prohibition created," Steinmetz told Cheddar. There's the "opportunity to usher in a new form of agriculture, a new form of cannabis being sustainable from day one."

Flow Kana acts as a middle man for farmers who struggle to compete with major players in the industry due to their small scale and fragmentation. The company takes care of "everything after harvest," Steinmetz said, like drying, curing, trimming, processing, and distribution.

"Small farmers can grow on the land, cultivate under their own principles, sustainably and organically," he said, adding that many of these farmers have farms that rely on green energy infrastructure like solar panels and rain catchments.

His business model is showing signs of success. The company just closed a $125 million round of funding, led by New York-based Gotham Green Partners. It's the biggest round of funding to-date for a private U.S. cannabis company.

Beyond helping small farmers, Steinmetz said Flow Kana is giving the cannabis industry the chance to push back on big agriculture and mono-farming, which is beginning to pick up as the industry gathers momentum, something Steinmetz called "unfortunate."

"The supply is already there. We just have to find a way to organize it, operationalize it, streamline it, make it more efficient, and then find a way to take it to market. And that's kind of where I think cannabis could usher in a new era of sustainability, not just for the industry, but actually influence agriculture at large," Steinmetz said.