Sebastopol company leading with cutting-edge research as North Bay cannabis industry grows
The growth of Northern California’s cannabis industry is spread out among various segments from the grower to the producer to the retailer as it has emerged from the shadows to become a growing multibillion-dollar legal business in the Golden State.
The maturation has fueled other support structures, such as attorneys, accountants and increasingly more financial institutions, to provide crucial services for these businesses, which in turn has made Sonoma County a key hub that is growing in economic importance locally.
That’s what happened in the wine industry decades ago and some of those support professionals for wine also have ventured over to weed.
It also includes cutting-edge research businesses.
LeafWorks in Sebastopol is a perfect example. It was formed by two Ph.D. research scientists who use genetic testing on cannabis to improve quality control over the product — from the farm to the store — similar to that of other agricultural crops.
“Genetics can play a large role. It does it in every other crop. It’s just that they haven’t been able to do it in cannabis because they haven’t been able to do the research,” said Bill Silver, who serves as an adviser to LeafWorks. “This company has got in early and has access to the largest source material to do the research.”
Silver described LeafWorks as being a global leader in the research space.
Silver speaks from vast experience as a former dean of Sonoma State University's School of Business and Economics. He made a dramatic leap into the cannabis industry in 2018 by becoming CEO of CannaCraft in Santa Rosa, a major producer of cannabis products, from oils to drinks, sold at licensed dispensaries.
Silver now serves as CEO of Doobie, a leading cannabis delivery service that operates in four states. He knows cannabis, as well as economic development.
LeafWorks was founded by Eleanor Kuntz and Kerin Law about six years ago as the two studied at the University of Georgia, a premier plant research university. Because cannabis is still illegal under federal law, research into the plant is very limited.
In academia, Kuntz was studying rice, and Law was working on medicinal plants as they obtained their doctorate degrees.
“Cannabis is such an important one. It felt like a really important intersection to bring the kind of classic botany and fundamental agricultural science that Kerin and I both really had into a space that is really neglected,” said Kuntz, who serves as CEO of LeafWorks.
Kuntz had family that had been in the cannabis industry in Humboldt County, but she and Law also realized their business needed to be centrally located in the nation’s biggest state market, she said, and Sonoma County fit that destination.
There also were local businesses that work within the natural products category to help provide mentorship, she added.
“We knew at the time and continue to know that cannabis will be a huge industry,” Law said. “But it has absolutely no genetic tools that any of the other agricultural crops utilize.”
LeafWorks also has another advantage in being able to work with companies and farmers in other states. That’s because the company works strictly on plant DNA issues as opposed to other cannabis businesses, which have to obtain licenses from other states to establish additional operations outside of California.
“We don’t have those territorial issues. But being in California was really important, especially the North Bay and Northern California because this is the heart of the community,” Law said.
A key service the company offers to farmers and seed producers is a test to determine if a cannabis plant is male with a Y chromosome, which is less valuable to cultivators than female plants that are more productive.
“Genetics is a tool, and it's a tool that can be utilized every step of the way because there are inherent issues of identity at every segment,” said Law, who also serves as chief scientific officer.
Manufacturers also want consistency in the product they are buying, such as ensuring 100% of certain marijuana strains are indeed fully contained in their cannabis purchase, Law added.
“If you are bringing in a material from multiple sources, how do you know you are getting the same thing unless you verify it? It’s really hard to create a consistent product if you don’t know you are getting in the same kind of material in every time,” she said.
“That’s where we can verify things are what you expect them to be when they come through the door.”
There already has been litigation in Oregon and Kentucky about whether cannabis seeds were properly identified when used by farmers, Law said. Genetic testing can back up such claims.
“This is something that we enable in the marketplace for people to have these normal business practices,” Law said.
The goal is to get a consistent product that can grow to the same height and is able to be harvested at the same time to make farming practices more uniform and consistent like other crops, such as corn or potatoes.
Some may actually want to improve a seed varietal to try to qualify for a patent. That is done by understanding the DNA of the plant, which underpins the traits and characteristics of the product, Kuntz said.
“Cannabis is really where those ag plants were in the 1930s and 1940s,” Kuntz said. “There’s huge improvements that can be done for farming efficiency, whether you are indoor or outdoor (cultivation) … having tools to that in cannabis is necessary.”
The company closed a $1 million in investment funding in 2020 and is still raising additional funds, Law said. “It’s really for people that understand the need for science and want to be part of that in our industry,” she said.
Silver said the reliance on science can make a difference for those in the cannabis industry as the federal barriers will eventually be wiped away and competition will speed up.
On Thursday, Senate Majority Leader Chuck Schumer unveiled legislation that would remove federal prohibitions on cannabis after the House had passed its own package. And, the marketplace is already undergoing consolidation as CannaCraft this spring announced it would merge with San Diego-based March and Ash.
Businesses using LeafWorks will benefit knowing they have a quality control process in place that will ensure their customers get a consistent product, Silver said.
“You can know with certainty that when you purchase this, you are getting what you paid for and it will have the impact you want. That really hasn’t been the case and that’s why I was so fascinated by why I think there is so much value there,” he said.