Agrify CEO Raymond Chang's Advice To Cannabis Cutivators: Get Organized, Be Consistent & Pepsify

Aware of how environmental factors affect cannabis cultivation, yield and quality, some smart cannabis entrepreneurs are looking to partner with companies that provide grow solutions.

The partnership between Agrify Corporation AGFY, a developer of systems-engineered indoor grow solutions that address shortfalls in the current cannabis cultivation methods, and cannabis multi-state operator Curaleaf Holdings, Inc. CURA is one such example.

The Massachusetts-based company agreed to provide the use of its Agrify Insights software platform for three years to Curaleaf's facility located in Massachusetts.

Raymond Chang, CEO of Agrify, who was a guest on the latest Benzinga Cannabis Insider live show co-hosted by Elliot Lane and Javier Hasse, said that the cannabis giant Curaleaf is one of the few MSOs that have advanced research and development capacities and "is always looking at the next generation of products and technologies."

The research evaluates how specific environmental conditions created and controlled by Agrify's vertical farming units and Agrify Insights' software platform affect harvest yields, plant terpene profiles and flavonoid concentrations. In addition, the platform examines techniques to improve the aroma and overall chemical profile of cannabis flower while enhancing its aesthetic appeal.

"They are looking to see if this would indeed be the technology that they would implement in all of their existing and also future expansions," commented Chang on the collaboration with Curaleaf. He added that they are also collaborating on other "interesting R&D initiatives."

Consistency As Growth Driver

Since its debut on Nasdaq Capital Market in January, Agrify's stock price has doubled.

It traded 10.80% lower at $29 per share on Thursday morning, after surging 23.75% in an after-hour session on Wednesday. Moreover, according to its latest earnings report, the company's revenue improved 203% year-over-year, reaching $11.8 million in the second quarter of fiscal 2021.

"It's all about execution and solving customers' problems," Chang said about the company's enhanced performance over the past year.

"One of the biggest problems in the industry today is the inability to produce good flowers consistently and repeatedly," Chang stressed, adding that the cannabis industry needs to be "pepsified," that is to make sure the customer gets the same product, the same smell and the same taste every time.

If they manage to satisfy these conditions, cannabis companies will be on the right path toward building solid brands that keep their customers coming back for more.

Luckily, Agrify has a method to help growers keep track of "what actually works" as well as how to monitor the effectiveness of their "grow recipe."

"Our secret sauce is that we believe fundamentally that every single genetic has a unique trait that could be optimized,"  Chang explained. 

Keeping that in mind, Agrify works with growers to optimize their growth plan and then lock it down and help them deliver the highest level of consistency and quality over time, Chang said.

Another step toward that goal is the collaboration with Confident Cannabis, a cannabis B2B wholesale platform. In February, the two businesses teamed up to integrate Confident Cannabis' lab data with Agrify Insights to enable cultivars to augment and improve specific processes to optimize the chemical composition of plants while cultivating at scale.

"Collecting almost a million sets of data in one production cycle per vertical farming unit is something that would allow us just to keep optimizing and ensure the highest consistency and quality over time," Chang told the Cannabis Insider.

5-Year Outlook

Chang said he is certain the cannabis industry will continue to grow, especially in a post-regulated and deregulated environment.

He expects that bigger MSOs will eventually consolidate, forming companies and brands such as Budweiser and Heineken. On the other hand, craft brewers and smaller single-state operators that have very unique genetics will be present as well and will continue to produce high-quality, premium flowers.

"The industry is going to bifurcate," Chang added.

Photo: Courtesy of Richard T on Unsplash